EN 
 
 
 OPINION OF THE EUROPEAN CENTRAL BANK 
of 10 November 2010 
on restrictions on cash payments 
(CON/2010/79) 
 
Introduction and legal basis  
On 4 October 2010 the European Central Bank (ECB) r eceived a request from the Bulgarian Ministry of 
Finance for an opinion on a draft law on restrictions on cash payments (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 and fifth indents of Article 2(1) of Council 
Decision 98/415/EC of 29 June 1998 on the consulta tion of the European Central Bank by national 
authorities regarding draft legislative provisions1, as the draft law relates to means of payment and 
payment and settlement systems. In accordance with the firs t sentence of Article 17.5 of the Rules of 
Procedure of the European Central Bank, th e Governing Council has adopted this opinion. 
 1.  Purpose of the draft law 1.1  The draft law is intended to limit cash pa yments within Bulgaria to BGN 5 000 (around 
EUR 2 557) or its foreign currency equivalent. Payments amounting to or exceeding BGN 5 000 
are to be made either via a transfer or a depos it in a payment account. Also, in order to avoid 
circumvention of this restriction, the draft la w provides that separate cash instalments on a single 
contractual monetary obligation must  also be made via a transfer or a deposit in a payment account, 
if such contractual monetary obligation amounts to or exceeds BGN 5 000
2. This prohibition 
applies equally to individuals and legal entities with  the only distinction being the difference in the 
amount of the fine to be imposed in the case of non-compliance3. In addition, the draft law amends 
Bulgaria’s Labour Code, providing for payment of any employment remuneration only to the 
payment account specified by an employee or a work er if payment services providers operate at the 
place of residence or work of that employee or worker4.  
                                                      
1 OJ L 189, 3.7.1998, p. 42. 
2 See Article 1 of the draft law. 
3 See Article 2 of the draft law. 
4 See §3 of the Transitional and Fina l Provisions of the draft law.  
2 1.2 According to the explanatory memorandum, the widespread practice of not recording cash flows 
for accounting purposes constitutes a major problem for the Bulgarian economy. Cash payments 
are currently used to settle tr ansactions involving legal entities and individuals and to pay 
employment remuneration. This has resulted in ta x evasion and lower social insurance and pension 
contribution payments. Therefore, the adoption of  the draft law aims at significantly increasing 
national revenue and helping to sh rink the grey economy in Bulgaria. 
1.3 In addition, the introduction of restrictions on cash  payments is intended to provide for a stricter 
measure tailored to the specific situation in Bulg aria, to properly address the risk involved with 
large cash payments, as described in  recital 18 of Directive 2005/60/EC5. 
1.4 The explanatory memorandum further points out th at the banking sector in Bulgaria has built up a 
widespread bank branch network, which will be  able to process the increased volume of non-cash 
payments, following the adoption of the draft law.  
 2.  Specific observations 2.1  The ECB notes that Union law only regula tes restrictions on cash payments in euro
6. However, for 
consistency reasons, the ECB cons iders it appropriate to assess the draft law’s provisions against 
the relevant Eurosystem practices. 
2.2 In this context, the ECB notes that the draft law is in compliance with Union law7, 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 reasons, are not incompatible with the 
status of legal tender of euro banknotes and co ins, provided that other lawful means for the 
settlement of monetary debts are available’. Th e ECB acknowledges that such other lawful means 
are available in Bulgaria. The ECB further notes th at the draft law’s prohibition of cash payments 
of and above BGN 5 000 does not affect th e legal tender status of lev banknotes8. 
2.3 Finally, the ECB acknowledges that the draft law’s objectives of: (i) addressing national revenue 
shortages, especially at times when Member  States are urged to implement necessary fiscal 
consolidation measures; (ii) shrinking the grey eco nomy in Bulgaria; and (iii) enforcing stricter 
anti-money-laundering measures tailored to the Bulg arian situation, qualif y as public benefits 
outweighing the impact of the draft law’s rest rictions on cash payments. Therefore, the ECB 
                                                      
5 Directive 2005/60/EC of the European Parliament and of the Council of 26 October 2005 on the prevention of the use of 
the financial system for the purpose of money laundering and terrorist fi nancing (OJ L 309, 25.11.2005, p. 15). 
6  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). 
7  See paragraph 5 of Opinion CON/2002/24, reiterat ed in paragraph 2.3.2 of Opinion CON/2010/36.  
8  The legal tender status of lev is laid down in Article 24 and Article 25(2) of the Law on the Bulgarian National Bank, 
published in Darjaven vestnik, issue 46 of 10 June 1997. 
3 considers the draft law’s limitations on cash paymen ts in lev banknotes and coins proportionate to 
the objectives pursued. 
  This opinion will be published on the ECB’s website.   Done at Frankfurt am Main, 10 November 2010. 
 
[signed] 
 
The President of the ECB 
Jean-Claude TRICHET