Berlin Federal Interior Minister Nancy Faeser (SPD) has announced a tougher approach to combating organized crime. “I support the introduction of a general cash limit of 10,000 euros,” said Faeser of “Bild am Sonntag”. “This reduces the risk of criminals concealing assets.” In her view, a 30,000-euro cash purchase of jewelry or watches should soon be a thing of the past.
According to Faeser, it is about “smashing criminal structures and consistently depriving them of criminal income”. Ownership structures would have to become more transparent, property owners would have to be easier to identify. The same applies to cash transfers.
With her advance, Faeser ties in with the coalition agreement between the SPD, FDP and Greens. However, only a “ban on the purchase of real estate with cash” is agreed there – but a specific cash limit is not mentioned. In addition, the recommendations of the international working group against money laundering, the so-called Financial Action Task Force (FATF), based at the OECD, are to be implemented “quickly” into German law where necessary.
The money laundering fighters had submitted a test report on Germany in June. It does praise some of the tightening of the law in recent years. “However, it is not clear that this commitment at the operational level has yielded full results.”
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In certain areas, the FATF experts still consider significant improvements to be necessary. This includes, for example, effective supervision of the private sector, especially the non-financial sector. Access to information on beneficial ownership should also be improved. In addition, money laundering investigations and prosecutions should be prioritized. The experts also suggest that the federal government should examine the introduction of a cash limit.
CSU rejects traffic light plans, CDU is in favor
While there is a cash limit in many other countries, large sums can also be paid in cash in Germany. Former Finance Minister Wolfgang Schäuble (CDU) had proposed an upper limit of 10,000 euros, but then refrained from doing so because of public protest.
>> Read also: Financial Supervisor Birgit Rodolphe – “Combating money laundering is like raising children”
Even now there is some resistance. The CSU, for example, rejects the traffic light plans, for the CDU they do not go far enough. “I think the restriction of cash payments for certain transactions, such as real estate transactions, is a sensible measure,” said the domestic policy spokesman for the Union parliamentary group, Alexander Throm, the Handelsblatt. However, the interior minister stopped halfway in the fight against money laundering and the financing of extremism.
“It would be even more important to grant the investigative authorities better powers to provide information and to inspect financial transactions in order to more effectively investigate criminal flows of money in organized crime or in extremist organizations,” emphasized Throm.
On the other hand, the parliamentary secretary of the CSU in the Bundestag, Stefan Müller, is of the opinion that there is no need for a cash limit to combat money laundering and terrorism. “In Germany, we have strict and effective obligations to provide evidence if someone wants to pay larger amounts in cash. That’s enough,” Müller told Handelsblatt. Experiences with cash caps in other European countries also show that these are no more effective than strict verification requirements.
The FATF examiners see it differently. In your Germany report, you speak of a “strong social and historical bond” between Germans and cash. Nevertheless, the introduction of an upper limit is necessary. Last year, the EU Commission also spoke out in favor of cash limits in Europe.
Most recently, there was movement on the subject in connection with the sanctions against Russia. The Federal Ministries of Finance and Economics recently introduced a second “Sanctions Enforcement Act”. Accordingly, there should be a ban on real estate purchases with cash, gold or cryptocurrencies. “The regulation serves to prevent money laundering by avoiding anonymous transactions,” says a paper by the two ministries.
As a consequence of the recommendations, Federal Finance Minister Christian Lindner (FDP) is also planning to set up a Federal Financial Criminal Police Office. Germany should “no longer be a paradise for money laundering,” said Lindner. There are hardly any investigative successes in large, complex cases. But not only the small fish should be caught. “To do this, we will follow the money trail.”
More: How Lindner wants to catch big money launderers with a new authority