EN ECB -PUBLIC  
 
 
OPINION OF THE EUROPEAN CENTRAL BANK  
of 12 February 2019   
on banning  the use of euro 500 denomination  bank notes and on certain amendments to anti-
money laundering legislation  
(CON/ 2019/5) 
 
Introduction and legal basis  
On 18 December 2018 , the European Central Bank (ECB) received a request from Finanstilsynet  (the 
Danish Financial Supervisory Authority ) for an opinion on a draft law amend ing the Law on measures to 
prevent money laundering  and financing of terrorism1 and the Law on financial business2 (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  (TFEU)  and the second in dent of Article 2(1) of Council Decision 
98/415/EC3, as the draft law relates to means of payment. In accordance with the first sentence of Article 
17.5 of the Rules of Procedure of the European Central Bank, the Governing Council has adopted this 
opinion.  
 
1.  Purpose of the draft law  
1.1 The three main purpose s of the draft law are to: (i) implement certain provisions of Directive (EU) 
2018/843 of the European Parliament and of the Council4, which amended  Directive (EU) 2015/849 
of the European Parliament and of the Council5, into Danish law ; (ii) implement certain parts of a 
political agreement made  on 19 September 2018 between the majority of the Danish political 
parties, including the parties of the Danish government,  to further strengthen initiatives  against 
money laundering and terror ist financing  (hereinafter the ‘Political Agreement’)  into Danish law6; 
and (iii) ensure further alignment of Danish legislation  with Directive (EU) 2015/849 .  
1.2 As part of the implementation of the Political Agreement, the draft law proposes to ban the use of 
                                                 
1   Lov om forebyggende foranstaltninger mod hvidvask og finansiering af terrorisme.  
2   Lov om finansiel virksomhed.  
3  Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank by national 
authorities regarding draft legislative provisions (OJ L 189, 3.7.1998, p. 42).  
4  Directive 2018/843 of the European Parliament and of the Council of 30 May 20 18 amending Directive (EU) 
2015/849 on the prevention of the use of the financial system for the purposes of money laundering or terrorist 
financing, and amending Directives 2009/138/EC and 2013/36/EU ( OJ L 156, 19.6.2018, p. 43 ). 
5   Directive (EU) 2015/849 of the European Parliament and of the Council of 20 May 2015 on the prevention of the use 
of the financial system for the purposes of money laundering or terrorist financing, amending Regulation (EU) No 
648/2012 of the European Parliament and of t he Council, and repealing Directive 2005/60/EC of the European 
Parliament and of the Council and Commission Directive 2006/70/EC (OJ L 141, 5.6.2015, p. 73 . 
6  Aftale mellem regeringen (Venstre, Liberal Alliance og Det Konservative Folkeparti) og Socialdem okratiet, Dansk 
Folkeparti, Radikale Venstre og Socialistisk Folkeparti om yderligere initiativer til styrkelse af indsatsen mod 
hvidvask og terrorfinansiering, af 19. september 2018.  
ECB -PUBLIC  
2 euro 500 denomination banknotes  (hereinafter ‘€ 500 banknotes)  in Denmark7. The proposed 
provision provides that €500 banknotes must not be ‘used ’. A list of means of use in the provision 
includes, but is not limited , to dispens ing, deposit ing, exchang ing, using as a means of payment or 
transferr ing, in Denmark.  According to the explanatory notes to the draft law , simple possession of 
€500 banknotes is permitted, which includes  bringing €500 banknotes into and out of Denmark . 
Further more , the ban only applies in Denmark and does not limit the use of €500 banknotes 
outside of Denmark. The explanatory notes also state that the ban is worded as broadly as 
possible to ensure that it cannot be  circumvented , e.g. by transferring €500 banknotes as a gift.  
Intentional or grossly negligent violation of the ban will be punishable by a fine , except in such 
cases where  a higher punishment applies pursuant to the Danish Penal Code8. The ban is 
proposed on the basis of  the Political Agreement  and is also included in  the Danish strategy for the 
combatting of money laundering and terror ist financing from 2018 to 20219. 
1.3 The explanatory notes further state that reports10 show that €500 banknotes are primarily used by 
criminals and that a number of specific cases in Denmark and abroad in recent years have shown 
that €500 banknotes have been used for criminal activities to a great extent. The explanatory notes 
also refer to the fact that on 4 May 2016, the ECB Governing Council announced that the ECB 
would stop producing €500 banknote s11 and that the Financial Action Tas k Force has 
recommended that producing the 500 -euro banknotes be stopped.  
1.4 The explanatory notes also consider the proposed ban in relation to Union law12. These notes  
mention  that the ban constitutes a restriction on the movement of capital and payments between 
Member States and also between Member States and  third countries which , as a main rule , is 
prohibited under Article 63(1) T FEU. However, the notes also  state that the ban is justified as it is 
introduced for compelling public interest , namely  for public order and safety  in order to prevent 
€500 banknotes  being used for criminal activity13. The ban is also found to be proportionate  to the 
interest it is seeking to protect14. 
1.5 The draft law does not propose to ban high denomina tion banknotes issued in currencies other 
than the euro . 
1.6 As part of the implementation of Directive (EU) 2015/849, as amended, the draft law also proposes 
to in troduce  a new exemption from the confidentiality obligation imposed on Finanstilsynet  
whereby exchange of information b etween  Finanstilsynet  and the ECB will not  constitute  a 
violation of that obligation15. This provision implements  Article 57a(2)  of Directive (EU) 2015/849, 
pursuant to which the obligation of professional secrecy shall not prevent the exchange of 
                                                 
7  See Section 1, no. 11 of the draft law.  
8  See Section 1, no. 75 of the draft law, which amendments the second sentence of Section 78(1) of the Law on 
measures to prevent money laundering and financing of terrorism.  
9   See page 2 of the Political Agreement. See also page 20 of Annex 1 to the Polit ical Agreement .  
10  See Anklagemyndigheden, Statsadvokaten, Hvidvasksekretariatet og Sporingsgruppen, Årsberetning 2010 . See 
also Europol, ‘Why is cash still king?’, European Police Office, 2015.  
11  See the ECB press release of 4 May 2016, available on the  ECB’s website at www.ecb.europa.eu.  
12  See pages 39 -40 of the explanatory notes to the draft law.  
13  See the second paragraph on page 40 of the explanatory notes to the draft law.  
14   See the second paragraph on page 40 of the explanatory notes to the draft law.  
15  See section 1, no. 59 of the draft law, which amends section 56(3) of the Law on measures to prevent money 
laundering and financing of terrorism.  
ECB -PUBLIC  
3 information between competent authorities supervising credit and financial institutions in different 
Member States in accordance with this Directive or other legis lative acts relating to the supervision 
of credit and financial institutions, including the ECB acting in accordance with Council Regulation 
(EU) No 1024/201316. 
 
2.  Scope of the opinion  
This opinion focuses on the provisions of the draft law concerning : (a) the proposed ban on the use 
of €500 banknotes  in Denmark ; and (b) Finanstilsynet’ s sharing of confidential information with the 
ECB.  The ECB stresses that it does not opine on whether the draft law effectively implements 
Directive  (EU) 2015/849  or the amendments introduced by Directive (EU)  2018/843  into Danish  
law. 
 
3.  Proposed ban on use of €500 banknotes in Denmark  
3.1 In May 2016 , the ECB Governing Council concluded a review of the denominational structure of the 
Europa series of the euro banknotes. It has decided to permanently stop producing the €500 
banknote and to exclude it from the Europa series , which is the second  series of  euro banknotes , 
taking into account the concerns that this banknote could facilitate illicit activities.  In view of the  
important  circulation of this denomination, also at international level, and to safeguard the trust in 
euro banknotes, the €500 will remain legal tender and can therefore continue to be used as a 
means of payment and store of value . The €500 banknote, like the othe r denominations of euro 
banknotes, will always retain its value and can be exchanged at the national central banks of the 
Eurosystem for an unlimited period of time.  Credit institutions, bureaux de change and other 
professional cash handlers may recirc ulate €500 banknotes . 
3.2 Under Article 3(4) of the Treaty on European  Union, the ‘Union shall establish an economic and 
monetary union whose currency is the euro ’. Denmark has a n exemption from participating in the  
third stage of the economic and monetary union , pursuant to the Protocol (No. 16) of the TFEU  on 
certain provisions relating to Denmark. The effect of the exemption for Denmark is that all articles 
and provisions of the Treaties and the Statu te of the ESCB referring to a derogation  shall be 
applicable to Denmark17. Therefore, i n accordance with Protocol (No 16) and Article 139 (2)(d) 
TFEU, Article 128 TFEU , which states that  the euro banknotes issued by the ECB and the national 
central banks shall be the only such notes to have the status of legal tender within the Union , is not 
applicable  to Denmark.  
3.3 Under  the principle of sincere cooperation set out in Article 4(3) of the Treaty on European  Union , 
Member States  shall facilitate the achievement of the Union's tasks and refrain from any measure 
which could jeopardise the attainment of the Union's objectives.  The recognition of the monetary 
law ( lex monetae ) of a State is a universally recognised principle of customary interna tiona l law18. 
                                                 
16  Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the Euro pean Central Bank 
concerning policies relating to the prudential supervision of credit institutions ( OJ L  287, 29.10.2013, p.  63). 
17  See paragraph 1 of Protocol (No. 16 ) of the TFEU on certain provisions relating to Denmark.  
18  See, for example, Recital 8 of Council Regulation (EC) No 1103/97 of 17 June 1997 on certain provisions relating to 
the introduction of the euro  (OJ L  162, 19.06.1997, p.  1); see also the European  Commission’s Communication on 
‘The impact of the introduction of the euro on capital markets’ (COM(97) 0337 final) (Euro Papers 3. July 1997. 
ECB -PUBLIC  
4 The law of the country  issuing  a currency determine s, inter alia, the questions concerning the 
identity of the currency and the currency's status as legal tender, i ncluding  which bank notes and 
coins constitute legal tender. The principle of lex monetae  generally applies regardless of the place 
of payment or the governing law of a contract setting out a payment obligation.  
3.4 Against this backdrop, the  Danish authorities are respectfully invited to refrain from introducing a 
ban on the use of the €500 banknote in Denmark. No such ban has been introduced at Union level. 
On the contrary , and as noted above, while the ECB has decided to permanently stop producing 
the €500 banknote, the €500 banknote will remain legal tender and can therefore continue to be 
used as a means of payment  and store of value . Insofar as Danish parties have entered into 
commercial tra nsactions denominated in euro, often with counterpart ies in the euro area, the ECB 
respectfully suggests that the Danish authorities should , in line with the principle of sincere 
cooperation and the monetary law of the Union , acknowledge  that, notwithstanding the fact that  
production  of the €500 banknote  will cease , it is still legal tender for the discharge of debts 
denominated in euro  and may continue to be used as a means of payment and exchange . 
3.5 Data on the flows of €500 banknotes between the banking sector and the non-banking sector 
within and outside the euro area suggest  that there are legitimate reasons for using €500 
banknotes including, among others, the instant settlement of common high -value payments or to 
temporar ily hold assets in central bank money.  The legitimate use of €500 banknotes is supported 
by results from an ECB survey on the use of cash in the euro area, which indicate that a distinctly 
larger -than-expected share of the population possess ed high-denomination ban knotes  and 
received and/or spent them for legitimate purposes19. Although €500 banknotes may be used for 
money -laundering activities, so may  any other denomination as well as non-cash means of 
payment . Therefore, the assumption  that €500 banknotes are predominantly  used by criminals is 
unsubstantiated. No evidence has been provided by authorities that €500 banknotes are used for 
illegal activities  in Denmark  to a larger extent than the national currency , other euro banknote 
denominations  or electronic means of payment.   
3.6 Furthermore, t he ECB considers that the draft law treats high-value banknote denominations  
unequally as it does not extend the proposed measures to other high -value banknote 
denominations, such as  the 1000  Swiss francs banknote  which has higher purchasing power . 
 
4.  Finanstilsynet’s sharing of confidential information  
4.1 The ECB welcomes section 1, number 59 of the draft law which, in accordance with Article 57a of 
Directive (EU) 2015/849, as amended, contains explicit permission for Finanstilsynet  to share 
confidential information acquired within its supervisory tasks under the existing law on m easures to 
prevent money laundering and financing of terrorism  with the ECB . The task of supervising credit 
institutions in relation to the prevention of the use of the financial system for the purpose s of money 
laundering and the financing of terrorism has not been conferred upon the ECB. However, the 
                                                                                                                                                             
Brussels. Tab. Ann. Free.), p. 63.  
19   See Esselink, H., Hernández, L., ‘The use of cash by households in the euro  area’, ECB Occasional Paper Series 
No 201, November 2017, European Central Bank, 2017. Available at: 
https://www.ecb.europa.eu/pub/pdf/scpops/ecb.op201.en.pdf.  
 
ECB -PUBLIC  
5 outcomes of the anti-money laundering and counter -terrorism f inancing ( AML/CFT ) supervision are 
important to consider for the discharge of the specific tasks conferred upon the ECB concerning the 
prudential supervision of credit institutions under Article 127(6) T FEU and Regulation (EU) No 
1024/ 2013 . It is therefore  of utmost importance that the ECB, as well as other prudential 
supervisors, receive timely and reliable information about  money laundering and financing of 
terrorism  risks and breaches of AML/CFT requirements by supervised entities  from AML/CFT 
supervisor s20. In order to facilitate the exchange of information between the ECB and the AML/CFT 
supervisors within the European Economic Area, including Finanstilsynet , an agreement on 
practical modalities of exchange of information was prepared  in line with Article 57a(2) of Directive 
(EU) 2015/849, as ame nded, with the support of the E uropean Banking Authority , European 
Securities and Markets Authority  and E uropean Insurance and Occupational Pensions Authority , 
and subsequently signed by the ECB on 10 Januar y 2019.21 
4.2 As regards the implementation of Article 57a of Directive (EU) 2015/849, as amended,  it is not 
entirely clear how the remaining parts of that Article are to be implemented in to Danish law . In 
particular , it is unclear whether Finanstilsyne t is permitted to disclose confidential information 
received within its AML/CFT supervision only to the ECB  or whether  it may disclose such 
information  to other competent authorities supervising credit and financial institutions in different 
Member States in a ccordance with legislative acts other than Directive (EU) 2015/849  as well . This 
would include  disclosure to competent authorities in accord ance  with Directive 2013/36/EU  of the 
European Parliament and of the Co uncil22. Current Danish legislation  on disclosing confidential 
information to Union/European Economic Area-based authorities appears to be limited to 
authorities that are responsible for ensuring compliance with AML/CFT legislation and does not 
cover disclosure to authorities responsible for supervising compliance with other legislative acts 
relating to the supervision of credit and financial institutions23. As the Single Supervisory 
Mechanism  consists of the ECB and national competent authorities, it is important to ensure that 
the national competent authorities can receive confidential information acquired b y Finanstilsyne t in 
its AML/CFT supervision, as envisaged in Article 57a of Directive (EU) 2015/849. The ECB 
therefore  recommend s that the draft law should be  amended to ensure that disclosure of 
confidential information by Finanstilsyne t to authorities responsible for the supervision of credit and 
financial institutions  is permit ted where  such authorities are not responsible for the AML/CFT 
supervision . 
4.3 Currently,  the U nion legislative framework on the exchange of AML/CFT -related information is 
currently undergoing revision by the legislators  to facilitate  the flow of information between  relevant  
authorities . The Danish legislators may therefore consider authorising the Danish Financial 
                                                 
20  See paragraph 1.2 of Opinion CON/2018/55. All ECB opinions are published on the ECB website  at 
www.ecb.europa.eu.  
21   See Multilateral agreement on the practical modalities for exchange of information pursuant to Article 57a(2) of 
Directive (EU) 2015/849 concluded between the European Central Bank and the undersigned Competent 
Authorities.  
22  See Article 56 of Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to 
the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending 
Directive 2002/87/EC a nd repealing Directives 2006/48/EC and 2006/49/EC (OJ L 176, 27.6.2013, p. 338).  
23  See Section 56(3) number 18 of the Law on measures to prevent money laundering and financing of terrorism.  
ECB -PUBLIC  
6 Intelligence Unit , Statsadvokaten for særlig økonomisk kriminalitet  (the Danish State Prosecutor for 
Serious Economic and International Crime ), to share confidential information with the competent 
authorities supervising credit and financial institutions  under other legislative acts  in other Member 
States, including the ECB, where such information is relevant to the performan ce of their tasks. 
The European Commission noted  that divergent national transposition of Directive (EU) 2015/849  
leads to important  differen ces in access to AML/CFT -related information24.  
 
This opinion will be published on the ECB’s website.  
 
 
Done at Frankfurt am Main, 12 February 2019 . 
 
[signed]  
 
The President of the ECB  
Mario DRAGHI  
                                                 
24  See paragraph 2b of the European Commission’s Communication o n ‘Strengthening the Union framework for 
prudential and anti -money laundering supervision for financial institutions’ (COM(2018) 645 final) (12 September 
2018, Brussels), p. 4.