The EU’s committee of permanent representatives (Coreper) today endorsed an agreement between the Council, represented by the Bulgarian presidency, and the European Parliament on a draft regulation aimed at improving controls on cash entering or leaving the Union.
“Terrorist financing, money laundering and other criminal activities will be easier to detect in Europe following today’s agreement on the modernisation of the Cash Controls Regulation. Experience has shown that we have to adapt our tools more quickly if we are to address new threats and prevent criminal activities from undermining the security of our citizens.”
Vladislav Goranov, Minister of Finance of Bulgaria
The regulation will improve the existing system of controls with respect to cash entering or leaving the EU. It replaces the ‘Cash Controls Regulation’ (regulation 1889/2005), which applies since 2007.
The objective is to ensure that the latest developments in international standards on combating money laundering and terrorism financing developed by the Financial Action Task Force (FATF) are reflected in EU legislation.
The definition of cash has been extended to cover not only banknotes but also other instruments or highly liquid commodities, such as cheques, traveller’s cheques, prepaid cards and gold.
The regulation is also extended to include cash that is sent by post, freight or courier shipment.
It complements the EU’s legal framework for the prevention of money laundering and terrorist financing laid down in directive 2015/849.
The new legislation extends the obligation of any citizen entering or leaving the EU and carrying cash of a value of €10 000 or more to declare it to the customs authorities.
The declaration will have to be done irrespective of whether travellers are carrying the cash in their person, their luggage or means of transport. At the request of the authorities they will have to make it available for control.
If the cash is to be sent in postal packages, courier shipments, unaccompanied luggage or containerised cargo (“unaccompanied cash”), the competent authorities will have the power to request the sender or the recipient, as the case may be, to make a disclosure declaration. The declaration will be done in writing or electronically using a standard form.
The authorities will have the power to carry out controls on any consignments, receptacles or means of transport which may contain unaccompanied cash.
The authorities of the member states will exchange information where there are indications that the cash is related to criminal activity which could adversely affect the financial interests of the EU. This information will also be transmitted to the European Commission.
The new regulation will not prevent member states from providing additional national controls on movements of cash within the Union under national law, provided that these controls are in accordance with the Union’s fundamental freedoms.
The Council and the European Parliament will now need to confirm the regulation through a vote, after which it will be published in the EU’s Official Journal.
Current rules on the movement of cash in and out of the EU apply since 15 June 2007 and are an integral part of the EU’s Anti Money Laundering and Terrorist Financing framework.
Under this existing legislation, travellers entering or leaving the EU are legally obliged to declare amounts of cash valued at €10 000 or more (or its equivalent in other currencies or bearer negotiable instruments) to customs authorities. The new regulation extends this obligation to cover highly liquid commodities or financial instruments such as gold and prepaid cards.
The new legislation is needed to take account of the fact that terrorists and criminals have managed to find ways to circumvent the rules on cash controls. Criminal organisations whose illicit activities generate large volumes of cash should not be able to take advantage of loopholes in the current system to move and launder their money.