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Forget buying a car or property with cash as EU proposes new legislation Image by analogicus from Pixabay

Forget buying a car or property with cash as EU proposes new legislation

Written by  May 12, 2021

The European Commission Commissioner for Finance, Mairead McGuinness, announced that the European Commission will present a new package of legislative proposals against money laundering in July, which will include a ban on cash payments. The ban will be set at 10 thousand Euros, or 75 thousand Kuna, with the Member States being given the opportunity to introduce a smaller amount.

Restrictions on cash payments have been in place for some time in 18 EU member states, so Greeks can pay up to 500 Euros in cash, French 1,000 Euros and Poles 15,000 Euros. Germany and Austria are the biggest opponents of bans on cash payments, and in these countries the freedom to pay in cash is seen almost as a constitutionally guaranteed right of citizens.

According to the new law, writes Večernji list, the ban on cash payments would apply to both companies and citizens. Croatian companies and individuals engaged in a business activity are also prohibited from paying in cash for values worth more than 75,000 Kuna from January 2018, so the new rules will be nothing new for entrepreneurs. If they are subject to fiscalisation, companies may not pay in cash any invoice above 5,000 Kuna. Things will change, however, with citizens and their mutual transactions. This week's statement by the finance commissioner sparked new debates in Austria and Germany, where restrictions on cash payments are seen as a restriction on personal freedoms. According to the European Central Bank, 82 percent of all invoices issued in Austria and Germany are paid in cash, and only Croatia has the same share of cash payments.

"We are talking about the upper limit of 10 thousand euros. It is quite difficult to carry so much money in your pockets,” McGuinness said in an interview with the German Suddeutsche Zeitung. The Commission intends to set up an EU umbrella agency against money laundering and terrorist financing, which will have a number of powers and will directly monitor how banks implement anti-money laundering policies. It is known that banks must examine the origin of money for all transactions larger than 105 thousand Kuna, and with new clients the origin should be examined for all transactions larger than one thousand Euros.

The Voice of Dubrovnik


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