On 12th June 2018, the European Commission published a report ending their initiative to restrict cash use across the EU, proposed last year. After careful consideration over the past few years, they will no longer be 'considering any legislative initiative on this matter.' Great news!
The publication of their study found that 'cash restrictions would not significantly address the problem of terrorism financing', this decisive pro-cash move serves as an example for other nations considering similar cash-restricting policies. The Action Plan stated that "Payments in cash are widely used in the financing of terrorist activities"…but public surveys and expert analyses revealed that transactions targeted under these objectives are either of a value too low to be covered or would see little impact from additional prohibitions. Or both.
Pro-cash associations have welcomed the outcome of the study, which are of no surprise to them because during last year's consultation, many had submitted their own studies and academic papers demonstating that cash is no more to blame for criminal activities than any other means of payment. Their submissions also raised the question whether CPLs were compatible with the existing EU laws and treaties.
In an article titled, 'Security Union: Commission publishes report on restriction on payments in cash', the European Commission ended the status of the consultation in a news article that showed support for one of the public's most fundamental freedoms: the right to choose cash.
'...At this stage, the Commission is not considering any legislative initiative on this matter. Restrictions on cash payments are a sensitive issue for European citizens, many of whom view the possibility to pay in cash as a fundamental freedom, which should not be disproportionally restricted.'
Much to the great delight of the public, the consultation is now closed.
Based on the study, it can be concluded that cash restrictions would not significantly address the problem of terrorism financing. The ineffectiveness of the measure stems from the fact that transactions targeted under these objectives are either of a value too low to be covered, or are already illegal transaction where an additional prohibition would have little impact, or both...
...Another important conclusion is that diverging national provisions on payments in cash distort competition in the internal market, leading to potential relocations of businesses across borders, in particular for some specific sectors relying significantly on cash transactions, such as jewellery or car dealers. These diverging national restrictions also potentially create loopholes allowing the bypassing of national cash payment limits, and therefore decreasing their efficiency.
Finally, it must be observed that restrictions on cash payments is a sensitive issue for European citizens and that many of them view the possibility to pay in cash as a fundamental freedom, which should not be disproportionally restricted.
A timeline of the EU Initiative to restrict cash
The EU's recent movements regarding cash use is one that should concern anyone stepping foot on EU soil, from locals to travellers. That's because cash is a social good, one that protects inclusivity and the public's freedom of choice.
Cash is King in Eurozone, finds new ECB study
Henk Esselink and Lola Hernández present the results of the survey-based study in a report titled, “The use of cash by households in the euro area”. Esselink and Hernández's report provides a comprehensive estimation of the number and value of payments made with cash and cards by consumers in the euro area as well as by country.
EU Commission's problematic proposal for restricting cash to fight terrorism On 2nd February 2016, the EU Commission published a cash-restricting Action Plan to 'step up the fight against the financing of terrorism'. ..suggests upper limits to cash payments and restrictions on the use of high denomination notes, particularly the EUR 500 note.
Cash Matters White Paper Keeping Cash Assessing the Arguments about Cash and Crime
This white paper draws from a wide range of institutional, legal, scholarly, policy, news media and other sources as well as quotes from experts in criminology and terrorist financing, banking, industry, and the social sciences. It is the most comprehensive approach to the issue of cash and criminal or terrorist activities to date.