Israel Bans High Value Cash Payments
Israel has introduced a law banning the use of cash for large transactions and has announced its intent to also consider a limit on personal cash savings, stating a desire to reduce overall cash usage.
The Jerusalem Post reports that under the new law, effective as of 1 August 2022, any payment made to a business that exceeds 6,000 shekels (around 1,770 euros or US dollars) must use a non-cash method. Trade between private individuals not listed as business owners is limited to 15,000 shekels (around 4,420 euros or dollars).
Tamar Bracha, who is leading execution of the new law by Israel’s Tax Authority, said: ‘We want the public to reduce the use of cash money.’ She goes on to say ‘crime organisations tend to rely on cash’ and the Tax Authority believes criminal activity will be made harder by reducing cash usage.
These assertions run counter to evidence from watchdogs such as We Fight Fraud, who reported in 2021 that criminals are increasingly favouring cashless crime. The awareness of criminals keeping up with and rapidly learning to exploit modern technologies has been under discussion for many years, with experts determining that limits on cash are unlikely to reduce crime but certain to damage people’s personal freedoms.
In 2017, Friedrich Schneider, Emeritus Professor of Economics at the Johannes-Kepler University of Linz, Austria, published a study concluding that limiting or abolishing cash would not prevent crime or terrorism, but would instead severely cap civil liberties. Dr Ursula Dalinghaus, who specialises in economic anthropology, reached the same conclusion in her comprehensive exploration of cash and crime.
There is little to no evidence to support the claim that restricting or eliminating cash payments will prevent terrorist attacks or financial crime. Criminals already make use of a diverse portfolio of payment technologies and types. Curtailing cash is going to do little to stop these activities, and it will end up hurting the vast majority of people who use cash for entirely legitimate reasons.
Attorney Uri Goldman, who represented clients appealing against the law in its original form in 2018, says that a previous limit on cash transactions saw the amount of cash on the market actually increase—‘so clearly, something’s not working’—and expressed concern about the estimated million citizens without bank accounts.
The law will prevent [unbanked individuals] from conducting any business and will, practically, turn 10 percent of the population into criminals.
The latest law is an amended version of prior cash-limiting legislation, which was initially approved in 2018 but ultimately did not pass. In its original form, the law would have included a ban on the private holding of large sums of cash, limiting personal cash savings to no more than 50,000 shekels (14,700 dollars or euros). Israel’s Finance Ministry has expressed an intention to reintroduce this legislation for a vote in the country’s parliament in the near future.
Qatar has also recently introduced a ban on paying cash for the purchase, rent or renovation of properties, plus transportation and certain luxury goods, in transactions exceeding 50,000 Qatari rial ($13,600 or €13,400).