Consumer advocates criticize the Interior Minister’s initiative

Euro bills

Large sums of illegal origin are smuggled into the regular economy every year. Interior Minister Faeser now wants to make money laundering more difficult with a cash payment limit.

(Photo: dpa)

Berlin The Federation of German Consumer Organizations (VZBV) has criticized Interior Minister Nancy Faeser’s (SPD) push for a general upper cash limit. “The state must take effective measures against money laundering, there is no question about that,” said the head of the financial market team at VZBV, Dorothea Mohn, the Handelsblatt. “But it is not good to place cash users under general suspicion and restrict their actions.”

With a view to fighting organized crime, Faeser had spoken out in favor of introducing a general cash limit of 10,000 euros. “This reduces the risk of criminals’ assets being concealed,” said the SPD politician to “Bild am Sonntag”. According to Faeser, it is about “smashing criminal structures and consistently depriving them of criminal income”.

Mohn, on the other hand, emphasized that cash is “very important” as a means of payment for almost all consumers. The federal government is therefore called upon to “secure cash in a forward-looking and long-term manner”. So far, however, no measures have been identified – neither with regard to securing cash acceptance in retail nor with regard to easy and inexpensive access to cash. “Instead, the proposal for a maximum cash limit creates uncertainty,” criticized the consumer advocate.

The topic is also being discussed at EU level. Last year, the EU Commission proposed a Europe-wide cash cap as part of a whole package of measures for a more efficient fight against money laundering. The limit is intended to help ensure that money from criminal transactions can no longer be fed into the regular economy so easily.

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A number of EU countries already have limits on cash payments. However, countries such as Germany, Austria, Ireland, Finland, Sweden and Hungary would first have to introduce them.

Italy is also debating the cash limit

In Italy, according to the new government, it should again be possible to pay larger sums of money in cash. Prime Minister Giorgia Meloni announced that she would raise the upper limit from the current €2,000 to €10,000, which was met with criticism from the opposition.

>> Read also: Financial Supervisor Birgit Rodolphe – “Combating money laundering is like raising children”

In Italy, bills or goods can only be paid for in cash up to a value of 2,000 euros. Meloni’s previous government under Mario Draghi had planned to lower the limit to 1,000 euros on January 1, 2023.

In Germany, a cash limit has long been controversial. Former Finance Minister Wolfgang Schäuble (CDU) once proposed a 10,000 euro limit, but then backed away from it because of public protest.

The fact that Interior Minister Faeser now also wants this sum as an upper limit is causing renewed discussion. The CSU, for example, thinks little of this and points out that strict and effective proof obligations would apply in Germany if someone wanted to pay larger amounts in cash.

The money laundering expert of the SPD parliamentary group, Sebastian Fiedler, defended the initiative of the interior minister. “Technically, there is not the slightest doubt that the introduction of a general cash limit is a very effective tool to make money laundering more difficult,” Fiedler told the Handelsblatt. He referred to an analysis by the EU police authority Europol, which had made it clear “how important cash is for serious forms of crime and thus also for money laundering”.

Fiedler was convinced that a cash limit of 10,000 euros meant “practically no” for consumers, but did mean restrictions for criminals. In addition to the cash ban on real estate purchases already initiated by the federal government, a cash limit would therefore be “another important step to free Germany from the reputation of being a money laundering paradise,” said the SPD politician.

More: How Lindner wants to catch big money launderers with a new authority

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