EN    EN  COMMISSION OF THE E UROPEAN COMMUNITIES 
Brussels, 18.2.2005 
COM(2005) 58 final 
2002/0132 (COD)   
COMMUNICATION FROM THE COMMISSION  
TO THE EUROPEAN PARLIAMENT 
 
pursuant to the second subparagraph of  Article 251 (2) of the EC Treaty 
 
concerning the 
common position of the Council on the adop tion of a regulation of the European 
Parliament and the Council on controls of cash entering or leaving the Community 
 
EN 2   EN 2002/0132 (COD) 
COMMUNICATION FROM THE COMMISSION  
TO THE EUROPEAN PARLIAMENT 
 
pursuant to the second subparagraph of  Article 251 (2) of the EC Treaty 
 
concerning the 
common position of the Council on the adop tion of a regulation of the European 
Parliament and the Council on controls of cash entering or leaving the Community 
1- BACKGROUND  
Date of transmission of the propos al to the EP and the Council 
(document COM(2002) 328 final – 2002/0132 COD): 25 June 2002 
Date of the opinion of the European Parliament, first reading: 15 May 2003 
Date of transmission of the amended proposal (COM(2003)371 
final – 2002/0132 COD) 1 July 2003 
Date of adoption of common position: 17 February 2005 
2- AIM  OF THE  COMMISSION  PROPOSAL 
The main objective of the Commission proposal is to supplement Directive 
91/308/EEC, which establishes a system of supervision and information on monetary 
transactions by financial and credit institutions. For this reason the proposal aims to introduce a harmonised control and informa tion procedure for large-scale movements 
of cash in or out of the Community and em powers the national authorities to take 
appropriate administrative actions, includi ng the obligation to pronounce penalties. 
The provisions of the proposals would theref ore help to prevent money laundering or 
financing terrorism. 
3- COMMENTS
 ON  THE  COMMON  POSITION 
3.1 G ENERAL REMARKS  
The Commission welcomes the Council's endorse ment of the main principles of the 
Commission proposal.  
 
EN 3   EN 3.2 C ONSIDERATION OF THE AMENDMENTS PROPOSED BY PARLIAMENT AT FIRST 
READING  
In its common position the Council took on boa rd a number of the Parliament's 
amendments including the following key amendments: 
Amendment 2 concerning the addition of Article 95 to the legal base 
Amendment 13 extending the range of "cheques" covered by the proposal 
Amendment 15 clarifying the roles of the respective competent authorities 
The Council did not take on board all the ot her amendments includ ing the following:  
Amendment 1, 20, 21 and 23: to ensure a bett er and more uniform application of the 
cash control procedures, the Council a nd the Commission are in favour of a 
regulation instead of  a directive, as proposed by the EP. 
Amendment 3, 4 to 8, 12, 14 and 18: in order to  ensure legal secur ity and especially 
to have equal treatment of persons ente ring or leaving the Community with large 
sums of cash, the Council and the Commissi on prefer a single mandatory approach; 
rather than the EP amendments which offe rs Member States the possibility to use 
either a mandatory declaration or a syst em based on disclosure upon request of the 
competent authorities. 
Amendment 16: Council and Commission are not  in favour of a transmission of data 
obtained through the declaration procedure or  during control activities to a central 
database which is co-managed by the Member States and EUROPOL. The Customs Information Systems (CIS) as foreseen in title V and VI of Regulation 515/97 
(mutual assistance) constitute an equivalent instrument to that proposed by the EP. 
3.3 N
EW PROVISIONS INTRODUCED BY THE COUNCIL  
The Council amended several provisions. The main amendments are as follows: 
In addition to the initial le gal base of the act  - Article 135 of the Treaty (customs 
cooperation) - the Council also required Artic le 95 (harmonisation of internal market 
provisions) to make it clear that the envisa ged uniform measures for controls at the 
external Community borders c ontribute also to the functio ning of the internal market. 
The addition of Article 95 was also requested from the EP in its first reading. The Commission can accept this. 
The geographical scope is amended to bring it into line with the geographical scope 
of Directive 91/308/EEC. The Commission can accept this. 
To ensure effective controls with minimum bureaucracy, the declaration is 
mandatory but may be made in written, oral or electronic form. The Council shared Parliament's concerns over the risks of a h eavy bureaucracy associated with a general 
requirement to present a writt en declaration, but preferre d a single system based on a 
mandatory declaration requirement (with  the burden for administrations and 
declarants being reduced via flexibility as to the form in which the declaration is 
 
EN 4   EN required). The Commission supports a manda tory declaration system and can accept 
this amendment.  
As far as penalties for failure to declare are concerned, the relevant rule has been 
brought in line with the standard text used in other legal acts (effective, proportionate 
and dissuasive character of pena lties). The Commission supports this. 
There is no fixed time limit for the power to de tain cash in case of failure to declare. 
The power to detain and the detention pe riod for cash are based on an administrative 
decision under national law. The Commission can accept this. 
The Commission is called upon to present an evaluation report to the EP and the 
Council four years after the en try into force of the regul ation. This corresponds to a 
similar request made by Parliament in  its Amendment 22. The Commission can 
accept this. 
The threshold for making a declaration was lowered from € 15 000 to € 10 000. This 
differs from the original proposal of th e Commission, which was identical to the 
threshold in Directive 91/308/EEC. Howe ver Council considered that a lower 
threshold is justified because cross border cash movements are easier to make than 
money transfers via financial in stitutions and because of th e risk of lesser amounts of 
cash being used specifically for funding te rrorist activities. The Commission can 
accept this. 
In order to be able to fight money launderi ng and terrorist financing most effectively 
it is indicated that Member States may, in  accordance with the Treaty, continue to 
apply national intra community cash c ontrols. The Commission can accept this. 
4. CONCLUSION 
The Commission considers that the common position constitutes an acceptable 
compromise even if not all of the amendm ents of the EP have been taken on board. 
The Commission is nevertheless convinced th at the views of Council and Parliament 
are sufficiently close to suggest an agreed position is attainable in the near future, 
especially given the interest of all sides to  improve controls to stop the flow of funds 
to terrorists and crim inal organisations.  
5. COUNCIL  STATEMENT  FOR  THE  MINUTES 
The general statement, on the use of the word "penalties" in Community legal 
instruments, makes it clear that "penalties" is  used in the text in the neutral sense to 
cover also administrative, financial and other types of sanctions. The Commission 
can accept this.