Higher restrict for money transactions results in the battle in opposition to cash laundering

Malta recently introduced a € 10,000 limit on cash transactions for the sale of property and valuables. This cap went into effect last March and is new to Malta – as before, any amount of cash could switch hands, a practice favored by criminals seeking to cover up the source of their profits. While the law applies to everyone, it does not aim to punish law-abiding citizens, but rather to try to control those who seek to launder illegally earned cash or undeclared cash through high-quality purchases from tax evasion.

This upper limit, which resulted from a government policy discussed in parliament in 2019, is being enforced by a committed FIAU team.

How does the € 10,000 cash limit help you fight money laundering?

A common method of money laundering is buying luxury and high quality goods in cash. Because unlike checks or bank transfers, cash is not traceable. Whether cash comes from the proceeds of drug trafficking, fraud, robbery, corruption, extortion or undeclared profits, it can be easily laundered and enjoyed through the purchase of luxury goods or high value goods.

The cash restriction therefore aims to reduce the risk of money laundering and tax evasion through this method.

What role did MONEYVAL play in introducing this regulation?

In its 2019 mutual evaluation report, MONEYVAL found that Malta has a significant black economy with widespread cash. The report made it clear that the size of Malta’s underground economy, exacerbated by the widespread use of cash and tax crimes, puts Malta and its economy at high risk of money laundering.

One of the recommendations in this regard was that Malta consider taking action to address this risk. The MONEYVAL assessment played an essential role in the introduction of the cash restrictions, and the EU is currently discussing the uniform introduction of this use of cash restrictions in the member states.

What does the € 10,000 limit apply to?

In fact, the limit is € 9,999.99 as the limit is € 10,000 or more. This applies to any cash payment made or received for the purchase or sale of the following items:

  • Antiques (a work of art or an item of antiquarian importance that is at least 100 years old)
  • Works of art (including paintings, drawings, etchings, decorative panels, engravings, lithographs or other prints, sculptures and ceramics, tapestries, photographs signed by the photographer, including limited edition prints made by exposure)
  • Jewelery (manufactured in whole or in part or plated with gold, silver, platinum or other precious metals and / or set with diamonds, precious stones or pearls and wristwatches)
  • Precious metals
  • Gemstones (including diamonds, sapphire, ruby, and emerald)
  • Pearls
  • Motor vehicles, also from previous ownership
  • Sea vessels, also from previous ownership
  • Property.

The restriction applies to both sides of the transaction, therefore both buyer and seller are responsible for the transaction and include not only payments in euros, but also payments in equivalent value in any other currency, regardless of whether they are in a transaction or in multiple related transactions.

What are the penalties for exceeding the limit for cash transactions?

Anyone who violates the restriction is committing a criminal act and, in the event of a judicial conviction, is punished with a fine of at least 40 percent of the amount paid or received in cash, over € 9,999.99.

An administrative settlement agreement cannot be concluded if the cash payment exceeds € 100,000 or if the person has already been found guilty of violating the regulation or has already concluded an administrative settlement in the past, unless it is three years from Date of the judgment or the previous settlement agreement.

How is this law enforced?

The FIAU is responsible for monitoring compliance with the regulations. The FIAU is currently setting up a new section with a team of officials specifically for this purpose. The regulations authorize the FIAU to require any dealer or notary who is subject to the regulations to provide information or documentation necessary to monitor compliance and to answer any questions the FIAU may reasonably ask. The FIAU is authorized to carry out on-site inspections of all traders and notaries who are subject to these regulations, with the aim of monitoring and ensuring compliance with the regulations.

The regulations also provide that the FIAU can request assistance and, if necessary, work and share information with other national authorities and government agencies, including the police, the Attorney General and the Finance Commissioner, to monitor and ensure compliance with the regulations, as well as with Any investigation or prosecution against anyone who has violated the regulations.

How can transactions over € 10,000 be made?

Payments and other transactions of € 10,000 or more can be made using any other legitimate means of payment such as check, cashier’s check, electronic transfer and credit card.

Is there this limit for cash payments in other EU member states?

Yes, most EU member states have a limit on cash payments. This ranges from € 15,000 in Croatia to € 500 in Greece. Belgium and Lithuania have a cash transaction limit of € 3,000, while France and Portugal have a limit of € 1,000. The European Commission is also considering proposing a limit on cash payments, the limit being very close to the Maltese one.

More information can be found at https://fiaumalta.org/.

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