Niall Hearty of Rahman Ravelli considers the European Union's latest move
The European Union has adopted new rules on cash transactions in a bid to tackle money laundering.
Under the new measures, there will be a €10,000 limit on payments in physical currency from 2027. Both businesses and individuals will be prevented from making in-person cash payments with a value of more than this.
In addition, transactions involving amounts between €3,000 and €10,000 will trigger mandatory customer identity checks and the making of reports to a country's financial intelligence unit.
The measures, which are aimed at money laundering and terrorist financing, will also cover digital assets. Cryptocurrency exchanges and similar platforms will have to verify the identity of customers on all trades with a value above €1,000.
The EU has said that business sectors that are heavily reliant on cash payments will be allowed a transitional period, with full compliance required by 2029.
Given the prevalence of money laundering and fraud across the Bloc, these measures will hopefully go some way towards thwarting criminals' use of large cash transactions to move money discreetly.
But this will depend, in part, on enforcement once full compliance comes into effect in 2029. One hindrance may be the fact that Member States can, under the new rules, set lower limits than the EU-wide cap. From a compliance and regulatory position, it would be better if the limits were the same across all the EU Member States.
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