The fight against money laundering or the fight against cash?

Cash payments of more than EUR 10,000 will be banned in the European Union. The European Parliament voted on the directive and package of regulations formally collected as Anti-money laundering tools.

The fresh rules must inactive be adopted by the European Council before they are published in the authoritative diary of the EU.

What do the fresh regulations say?

The legal framework adopted provides that in cash payments of the value of EUR 3 000 to EUR 10 000 the identity of customers who carry out specified a transaction will be checked, and, if necessary, reported their suspicious behaviour (the regulation applies to entrepreneurs selling, among others, jewelry, precious stones, cars, works of art).

The European bureaucracies have gained another office to oversee fresh government to combat money laundering. In Germany, Frankfurt will have a central supervisory body – the Anti-money laundering and Terrorist Financing Office (AMLA).

Member States will, of course, be able to impose a lower maximum limit for cash payments. I am afraid that any EU countries can benefit from this power.

Currently in Poland, the cash payment limit for entrepreneurs is PLN 15,000 gross, while individuals, consumers, have no limit for their cash payments. It is worth noting that a social run to defend cash and civic force has contributed to maintaining specified amounts.

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As evidence, I will remind you of the situation from mid-2023, namely the cancellation of the planned Act, limiting cash payments ("Polish fresh Deal") within 1 transaction for entrepreneurs to PLN 8,000 gross and for individuals to PLN 20,000 gross.

This is simply a large example of how unstable the limits are. We can be certain that after a fewer years, erstwhile citizens get utilized to the restrictions, the legislator may effort to increase them and further cut our freedom.

Therefore, the limit of EUR 10 000, which may seem rather advanced at first (around PLN 43 000), may be reduced to EUR 3 000, for example, after respective years with a advanced probability, and all cash transactions over EUR 1 000 will should be confirmed by an identity document. Of course, everything in the interests of the common good, the fight against money laundering and the general safety of transactions. I hope I'm wrong, and my predictions are wrong!

The scale of financial crime online and in reality

It is worth asking: is the introduction of a cash payment limit a fight against money laundering or a fight against physical money?

Money laundering as a crime under Article 299 of the Criminal Code in police statistics is just a tiny promil among economical crimes in Poland. Data for 2020 (no newer on the Police website) indicate 276 proceedings initiated and detected 638 offences.

For comparison, credit fraud as described in Article 297 of the Criminal Code in 2020 Police Data show 1366 proceedings initiated (five times more than money laundering) and 2746 offences found (more than 4 times more than money laundering).

The number of crimes committed online is increasing. The scale of this phenomenon is very well reflected in nearly 10,000 attempts to extort a debt or loan, and Polish reservation of almost 178 1000 identity papers in 2023.

The introduction of restrictions on cash payments is definitely a step in the incorrect direction.

This is to support banks in the improvement of their client profiling systems on the basis of their transactions, in the construction of correlation models [assigning customers to circumstantial client groups on the basis of their revenue, expenditure, loans, payment types to offer further products – ed.], which will be full automated in the future.

This model of electronic collection of client data leads to segmentation, and then we can witness the full automation of credit and analytical processes in banks.

Will specified a future be good for us?

Do we want to live in a planet where financial corporations will know about each of our consumer spending and preferences? Will we knowingly surrender the right to keep financial freedom, the right to anonymity towards financial corporations?

We should not accept the top-down solution of these issues by the European Union and the introduction of limits for cash payments. It is limiting individual financial freedom and taking distant our right to choose how we want to trade.

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Cash payments are financial safety for citizens and cash is simply a reliable means of payment. The deficiency of electricity or the net does not interfere with cash payments, we do not request intermediaries, applications on smartphones, payment cards, electronic bank account access.

Let us not be indifferent to what happened in Europe. We have influence on politicians' decisions only erstwhile we start protesting loudly in defence of our civilian rights and freedoms.