EU Implements Cash Prohibition, Imposes Penalties
European Union Imposes New Cash Limit to Combat Money Laundering
The European Union (EU) is set to introduce a new cash limit as part of its anti-money laundering (AML) package, aiming to reduce money laundering, increase transparency, and eliminate anonymity in large cash transactions. The new rule will come into force in July 2027 [1].
Under the new regulation, cash payments exceeding €10,000 will be banned EU-wide, and identity checks will be mandatory for cash transactions of €3,000 or more [2][5]. This move targets sectors vulnerable to criminal activity, including banks, real estate, casinos, luxury goods dealers, asset managers, cryptocurrency platforms, and others [1][2].
Businesses will be required to refuse large cash transactions above the €10,000 limit, and failure to comply could mean engaging in illegal activity [2]. Additionally, they will need to implement mandatory customer identification and record-keeping for payments over €3,000, continuously monitor and precisely identify beneficial owners of customers and partners, and enhance their reporting requirements [2].
The new AML regulations will also extend to crypto-asset service providers, increasing scrutiny on cryptocurrency payments and holdings [2]. This change is expected to impact cash-intensive businesses such as car dealerships, jewelry stores, luxury goods sellers, and construction firms, which will face tighter controls, including compliance with customer checks and transaction limits [4].
The crafts sector and small businesses have expressed concerns about the burdensome documentation requirements that may result from the new limit [6]. However, private individuals can still handle more than €10,000 in cash without repercussions in private transactions [7].
The specifics of the fines and criminal investigations for violations are yet to be determined [3]. The Anti-Money Laundering Authority (AMLA), a special EU agency active in Frankfurt am Main since July 2025, will oversee whether member states implement all regulations related to anti-money laundering [8].
The new cash limit will apply to all member states of the EU [9]. Previously, there was no legal limit on cash payments in the EU [10]. The new measure will affect all forms of cash transactions, including coins, individual bills, and multiple bundles [11]. If more than €10,000 is deposited, banks will require a proof of origin [12].
The new cash limit rule is expected to have a significant impact on traders and businesses within the EU [13]. While the rule has received support, there is also criticism from those who feel it restricts their freedom and complicates transactions [1].
In summary, the European Union is implementing a new, strict limit on cash payments to combat money laundering. From 2027, cash payments exceeding €10,000 will be banned EU-wide, and identity checks will be mandatory for cash transactions from €3,000, imposing increased AML compliance duties on businesses handling large cash payments [1][2][5].
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