On September 17, 2021, The Dutch Minister of Finance informed the Dutch Parliament that the Netherlands together with Belgium, France, Italy and Spain has filed a non-paper at expert level with the European Commission.

This non-paper argues for an EU-wide ceiling for cash payments amounting to EUR 5,000, with the possibility for Member States to implement a lower limit. According to the Dutch Ministry of Finance an EU-wide approach on this point is necessary, because the effectiveness of only implementing national ceilings for cash payments can be limited by a so-called waterbed effect. Nationally the Dutch Minister of finance is working on the introduction of a ceiling prohibiting cash payments from EUR 3,000 up. Since there doesn’t seem to be sufficient support for such a ceiling from other EU Member States, the Dutch Minister of Finance has chosen to advocate, jointly with Member States in favor of a ceiling, for a reduction to EUR 5,000, while retaining the possibility to implement a lower ceiling on a national level. The aim of introducing such a ceiling is to combat money laundering and terrorist financing in Europe.

Furthermore the non-paper pleas for the considering of further steps regarding the EUR 500 note. In this respect the non-paper states the following: “Different studies show that the EUR 500 note is an important factor in facilitating money laundering. In 2016 the Commission also underlined the role EUR 500 notes play in financing terrorist activities in its Action plan for strengthening the fight against terrorist financing. In this Action plan the Commission states that high denomination notes are in high demand among criminal elements who engage in physical transportation of cash due to their high value and low volume.

On 4 May 2016 the European Central Bank took into account the concerns around the EUR 500 note and decided to discontinue production and issuance of EUR 500 notes. However, the EUR 500 notes remain legal tender. They retain their value and can be exchanged at the national central banks for an unlimited period of time. The latest statistics at the end of February 2021 show that there are still 400 million notes in circulation, with a total value of 200 billion euros. This corresponds to a decrease of one-fifth compared to the cessation of the issuance of 500 banknotes by the ECB in 2019, but this is part of a long-term trend, as the decrease is 35% compared to the peak in December 2015 (around 613 million 500 banknotes in circulation). We therefore call on the Commission to engage with the European Central Bank to consider further steps regarding the EUR 500 note, including the introduction of a phasing out to allow for the gradual conversion by the public into smaller denomination notes under the supervision of banks and Central Banks”

The text (in the English language) of the non-paper as made available on the website of the Dutch Ministry of Finance can be found here.

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