Germany and Austria against prohibition of cash payment

The European Commission will present a new package of legislative proposals against money laundering in July, and an integral part of this package of laws will be an absolute ban on cash payments above a certain amount, announced European Commissioner for Finance Mairead McGuinness. The upper limit of the ban on cash payments will be set at 10 thousand euros, and the Member States will be able to introduce a lower amount. The ban on payments would apply to natural and legal persons.


Restrictions on cash payments have been in place for some time in 18 of the 27 Member States of the European Union. For example, in Greece, you can pay up to 500 euros in cash, in France up to 1000 euros, and in Poland up to 15 thousand euros. Germany and Austria oppose this Commission proposal, citing citizens’ freedoms and the habit of paying in cash.

The possibility to pay in cash in Germany and Austria is seen as a constitutional right of citizens, and in Austria, an initiative has emerged to protect cash payments by the Constitution. Austrian Finance Minister Blumel confirmed that Austria will not accept the proposal leading to the abolition of cash and explained that Austrians cultivate an emotional attitude towards paying banknotes that did not change even during the coronavirus pandemic.

According to the European Central Bank, 82% of all invoices issued in Austria and Germany are paid in cash, and only Croatia has the same percentage of cash payments.


Croatian natural and legal persons engaged in business activity already have a ban on payments in cash for a value of more than HRK 75,000 from January 2018, so the new rules will not be new to entrepreneurs. If they are subject to fiscalization, legal entities are not allowed to pay cash bills above HRK 5,000. The new rules, however, will be a novelty for citizens because apartments should no longer be paid for in cash.

In Croatia, according to research, every fifth apartment is bought with cash. According to the new rules, those who want to buy an apartment must first deposit the money in a bank and pay from their account to the seller’s account. Citizens who buy real estate with cash before buying will have to answer questions from bankers, and possibly the Office for the Prevention of Money Laundering, to prove how they got the money, i.e., to determine its origin. The same will apply to the purchase of used cars, but also other values that exceed the stated amount, and can be purchased by agreement between the two parties.

In November last year, Croatia encouraged the purchase of state-owned apartments in cash and offered a 15% discount on the entire amount if certain criteria were met. This benefit could be exercised by persons who at the time of purchase of the apartment were tenants in that apartment or the tenants were members of their immediate family under a lease agreement or if at the time of purchase, they did not have any other real estate. The Croatian government claims that Croatia is among the ten least risky countries for money laundering and terrorist financing, and further prevention of money laundering has been presented as one of the reform measures.


The ban on cash payments is part of the Commission’s plan to combat money laundering as successfully as possible in the future. The Commission intends to set up a special EU anti-money laundering and anti-terrorist financing agency, which will have several powers and will directly monitor how banks implement anti-money laundering policies. Banks must examine the origin of money for all transactions greater than 14 thousand euros, and with new clients, the origin should be examined for all transactions greater than one thousand euros.

One of the key preventive actions of each bank should be an in-depth analysis of each party when establishing a business relationship, but also an analysis of each occasional transaction that exceeds the amount of 14 thousand euros or represents a transfer of funds worth more than a thousand euros. In the fight against money laundering, the latest decision was to stop issuing new 500-euro banknotes.

While the Commission sees the ban on cash payments as a successful tool in the fight against money laundering, for some Member States the freedom to pay in cash should not be lifted at any cost. You can read more about the rules of electronic and cash within the EU via the LINK.

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