Issue link: https://maltatoday.uberflip.com/i/1377253
14 maltatoday | WEDNESDAY • 26 MAY 2021 INTERVIEW DAVID LINDSAY THE new cash restriction law limiting payment transactions to below €10,000 has been some- thing of a bone of contention but, according to the Financial Intelli- gence Analysis Unit's legal team, Malta's limit was settled upon after no insignificant amount of research into Malta's particular situation, where cash is still most definitely king. "Whenever we initiate the drafting of new legislation, we conduct extensive research," explains Daniel Frendo, the FI- AU's Manager of Legal and In- ternational Relations. "And this was precisely one of those areas. We tried to cater to our particu- lar scenario in Malta, while also bearing in mind that individual citizens have a right to make use of cash. "Let's also keep in mind that cash was, and still is, king in Malta. And this is something we took into consideration, in the sense that we did not want to create a culture shock by going from zero to 100 overnight." That is precisely why the €10,000 limit was settled upon "to start off with" in the areas deemed to be the riskiest: im- movable property, antiques, jewellery, precious metals, pre- cious stones and pearls, cars, sea-craft and works of art. The resulting legislation, the Use of Cash (Restriction) Regulations (Subsidiary Legislation 373.04), limits cash purchases of such items at €9,999.99. That limit, however, may well be in for a change, depending on likeminded manoeuvres at EU level. Dr Frendo elaborates, "We started off with this piece of leg- islation but I am confident that, in the years to come, things will change, most probably from an EU perspective. That is because even the European Commission itself is once again trying to re- vive its efforts to come up with EU legislation limiting cash re- strictions across the whole of the EU, and introducing a single threshold across the bloc. In fact, European Commis- sioner for Finance Mairead McGuinness earlier this month confirmed the Commission's intention to present a new package of legislative proposals against money laundering in Ju- ly, which is expected to include an EU-wide €10,000 ban on cash payments. McGuinness said in an in- terview with the authoritative Suddeutsche Zeitung, "We are talking about the upper limit of €10,000. It is quite difficult to carry so much money in your pockets." As matters stand, cash pay- ment limits fluctuate between the EU member states that have introduced such restric- tions. The limit in Greece, for example, stands at just €500, in France at €1,000 while in Po- land the limit is at €15,000. As such, Malta's €10,000 limit ap- pears quite reasonable. The Commission also intends to establish an EU umbrella agency against money laun- dering and terrorist financing, which will have a number of powers, including how to di- rectly monitor how banks im- plement the EU's anti-money laundering policies. Germany and Austria, where 82% of invoices are paid in cash, are reportedly putting up the stiffest resistance to the crea- tion of a pan-EU law. Dr Frendo adds, "Even in countries such as Germany and Luxemburg, cash is still used quite predominantly. So this Cash is still king in Malta, at least up Daniel Frendo Let's also keep in mind that cash was, and still is, king in Malta. This is something we took into consideration, in the sense that we did not want to create a culture shock by going from zero to 100 overnight.