EN ECB-PUBLIC 
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 10 May 2012  
on restrictions of settlements in cash 
(CON/2012/36) 
 
Introduction and legal basis  
On 18 April 2012 the European Central Bank (ECB) received a request from the Lithuanian Ministry of 
Finance for an opinion on a draft law amending the Law on Tax Administration (hereinafter the ‘draft law’).  
The ECB’s competence to deliver an  opinion is based on Articles 127(4) and 282(5) of the Treaty on the 
Functioning of the European Union and the second inde nt of Article 2(1) of Council Decision 98/415/EC 
of 29 June 1998 on the consultation of the European  Central Bank by national authorities regarding draft 
legislative provisions
1, as the draft law relates to means of paym ent. In accordance with the first sentence 
of Article 17.5 of the Rules of Procedure of th e European Central Bank, the Governing Council has 
adopted this opinion. 
 1.  Purpose of the draft law 
1.1 The draft law is intended to limit potential non-fu lfilment of tax obligations by certain taxpayers 
and, more particularly, to reduce the risks of: (i) concealing income, (ii) attributing acquired assets to fictitious sources of income, and (iii) non-payment of taxes, which arise when settlements are made in cash. 
1.2 The draft law grants the tax administrator the auth ority to restrict a taxpayer’s right to settle in cash 
where there is an established risk that a taxpayer,  by settling in cash, may be concealing his income 
or avoiding tax in any other way.  
1.2.1 In particular, the tax administrator may give an instruction to a specific taxpayer that for a limited 
period of time, up to one year, all his/her settleme nts with legal or natu ral persons engaged in 
commercial activities are to be made as non-cash settlements. 
1.2.2 Such an instruction may be given if a taxpayer,  or the manager of a taxpayer legal entity, has been 
found guilty of or has had an administrative pena lty imposed on him/her for one of the following 
violations of law: (i) fraudulent or negligent keep ing of accounts, (ii) legalisation of proceeds from 
crime and criminal assets, (iii) illegal employment, (iv) violating the procedure for paying a salary, (v) violating the rules on cash fund accounting, (vi)  providing incorrect data on income, profits or 
                                                 
1  OJ L 189, 3.7.1998, p. 42.  
ECB-PUBLIC 
2 assets, and (vii) violating tax laws. The instruction ma y also be given if there is an established risk 
that a taxpayer, in making settlements in cash, ma y conceal income or avoid paying taxes in any 
other way. 
 2. Specific observations 2.1 The ECB notes that Union law only regula tes restrictions on cash payments in euro
2. However, for 
consistency reasons, the ECB cons iders it appropriate to assess the draft law’s provisions against 
the relevant Eurosystem practices. 
2.2 The ECB notes that the draft law is in compliance with Union law3, and in particular with recital 19 
of Council Regulation (EC) No 974/98, which states that ‘limitations on payments in notes and 
coins, established by Member States for public r easons, are not incompatible  with the status of 
legal tender of euro banknotes and coins, provided that other lawful means for the settlement of 
monetary debts are available’. The ECB acknowledg es that: (i) such other lawful means for the 
settlement of monetary debts, other than cash, are available in Lithuania; and (ii) the draft law’s 
objective of combating tax evasion qualifies as a public reason outweighing the impact of the limitations on cash payments.  
2.3 However, limitations on settlements in cash s hould be proportionate to the objectives pursued and 
should not go beyond what is necessary to achieve  such objectives. Any impact of the proposed 
limitations should be carefully weighed against the p ublic benefits expected to be derived from the 
proposed restrictions on settlements in cash. Also in  view of the fact that the measures affect low 
value payments, the competent authorities should ensu re that the effects of these measures do not 
go beyond what is necessary for achieving the objective of combating tax evasion. 
  This opinion will be published on the ECB’s website.    Done at Frankfurt am Main, 10 May 2012. 
 
[signed] 
 
The President of the ECB 
Mario DRAGHI 
                                                 
2   See recital 19 of Council Regulation (EC) No 974/98 of  3 May 1998 on the introduction of the euro (OJ L 139, 
11.5.1998, p. 1). 
3   See paragraph 5 of Opinion CON/2002/ 24, reiterated in paragraph 2.3.2 of Opinion CON/2010/36 and paragraph 2.2 of 
Opinion CON/2010/79. All ECB opinions are publishe d on the ECB’s website at www.ecb.europa.eu.