Controls of cash movements: Implementation Appraisal

This briefing is one in a series of 'Implementation Appraisals' on the operation of existing EU legislation in practice. Each such briefing focuses on a specific EU law which is likely to be amended or reviewed, as foreseen in the European Commission's Annual Work Programme.

Implementation Appraisals aim to provide a succinct overview of material publicly available on the implementation, application and effectiveness of an EU law to date – drawing on available input from the EU institutions and external organisations. They are provided to assist parliamentary committees in their consideration of the new proposals, once tabled.Regulation 2003/59 complements the existing rules on combatting money laundering and terrorist financing. It creates an obligation to provide a cash declaration for anybody crossing EU borders with more than €10,000 in cash.

Although the reports and research have shown that the regulation, in its current state, does not require a thorough review, several shortcomings that limit its powers and hamper its full harmonisation were identified. These shortcomings include, for instance, the fact that the regulation does not cover cash sent by post or freight; that Member States’ authorities cannot temporarily impound sub-threshold amounts of cash; or that sanctions for breaches of this cash declaration obligation differ among the Member States. These open issues not only limit harmonisation among the Member States, but also hamper practical application of the regulation in the field to combat money laundering and terrorist financing.

On several occasions, the European Parliament and the Council have expressed the need to update current legislation and strengthen the existing rules. The European Economic and Social Committee also highlighted the need for better rules to combat money laundering.

The European Commission’s intention to tackle the shortcomings of the regulation identified is thus a welcome step [Proposals were introduced on the 21 December 2016]

EP: EPRS: Briefing: Implementation Appraisal: Ex-ante Impact Assessment http://www.europarl.europa.eu/thinktank/en/search.html?policyAreas=EXIMAS

ESO: Background information: Report from the Commission to the European Parliament and the Council on the application of Regulation (EC) No 1889/2005 of the European Parliament and of the Council of 26 October 2005 on controls of cash entering or leaving the Community pursuant to article 10 of this Regulation (COM (2010)429) http://www.europeansources.info/record/report-from-the-commission-to-the-european-parliament-and-the-council-on-the-application-of-regulation-ec-no-1889-2005-of-the-european-parliament-and-of-the-council-of-26-october-2005-on-controls-of/

European Commission: Taxation and Customs Union > Individuals > Cash controls http://ec.europa.eu/taxation_customs/individuals/cash-controls_en

ESO: Background information: Security Union: Commission adopts stronger rules to fight terrorism financing http://www.europeansources.info/record/security-union-commission-adopts-stronger-rules-to-fight-terrorism-financing/

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