Recently, France decided to crack down on those people who make cash payments and withdrawals and who hold small bank accounts. The reason given was, not surprisingly, to “fight terrorism,†the handy catchall justification for any new restriction governments wish to impose on their citizens. French Finance Minister Michel Sapin stated at the time, “[T]errorism feeds on fraud, money laundering, and petty trafficking.â€
And so, in future, people in France will not be allowed to make cash payments exceeding €1,000 (down from €3,000). Additionally, cash deposits and withdrawals totaling more than €10,000 per month will be reported to Tracfin—an anti-fraud and money laundering agency.
Currency exchange will also be further restricted. Anyone changing over €1,000 to another currency (down from €8,000) will be required to show an identity card.
Do you need to make a deposit on a car? That might be suspect. Did you just deposit a dividend you received? It might be a payment from a terrorist organisation. Planning a holiday and need some cash? You might need to be investigated for terrorism.
And France is not alone. In the US, federal law requires banks to file a “suspicious activity report†(SAR) on their customers whenever a customer requests a suspicious transaction. (In 2013, 1.6 million SAR’s were submitted.)
As to what may be deemed “suspicious,†it may be any transaction of $5,000 or more, but it may also mean a series of transactions that, together, exceed $5,000.
The reader may be saying to himself, “But that’s just normal, everyday banking business—that means anybody, any time, could be reported.†If so, he would be correct. Essentially, any banking activity the reader conducts could be regarded as suspect.
In Italy, in 2011, Prime Minister Mario Monti began working to end the right of landlords, tradesmen, and small businesses to perform large transactions in cash, which critics say help them evade taxation. In December of that year, his government reduced the maximum allowed cash payment from €2,500 euros to €1,000.
