EN ECB-PUBLIC  
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 5 December 2022  
on the prohibition of cash payments in real estate transactions and on the presumption of 
unreliability of persons affected by the Union restricti ve measures regime 
(CON/2022/43) 
 
Introduction and legal basis 
On 11 November 2022 the European Central Bank (ECB ) received a request from the German Ministry of 
Finance for an opinion on a draft of a second Law on t he effective enforcement of restrictive measures 
(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 (the ‘Treaty’) and the second indent of Article 2(1) of Council Decision 
98/415/EC1, as the draft law relates to means of payment  and to the specific tasks conferred upon the ECB 
concerning the prudential supervision of credit instit utions pursuant to Article 127(6) of the Treaty. In 
accordance with the first sentence of Article 17.5 of the Rules of Pr ocedure of the European Central Bank, 
the Governing Council has adopted this opinion. 
 
1. Purpose of the draft law 
1.1 The main purpose of the draft law is to introdu ce structural improvement s in the enforcement of 
restrictive measures and the fight against money laundering in Germany. Among other things, the 
draft law introduces: (a) a prohibition of cash payments in real estate transactions2, and (b) an 
automatic finding and rebuttable presumption of unr eliability of natural and legal persons that are 
affected by the Union restrictive measures regime3. 
1.2 As regards the prohibition of cash payments the draft law provides that real estate and certain 
share purchase transactions may only be executed  by means other than payment in cash, crypto 
assets and raw materials. In particular, the prohibition applies to the purchase of immovable 
property and the acquisition of shares in companies whose assets directly or indirectly include real 
estate located in Germany. Under the draft law, the parties to a real estate transaction must 
demonstrate to the notary who is to file the transa ction with the land regist ry that the payment was 
 
1   Council Decision 98/415/EC of 29 June 1998 on the consultation of the European Central Bank by national 
authorities regarding draft legislative pr ovisions (OJ L 189, 3.7.1998, p. 42). 
2  Under Article 4(5) of the draft law, a new sect ion 16a is inserted into the Law on money laundering 
(Geldwäschegesetz vom 23. Juni 2017 (BGBl. I S. 1822), das zuletzt durch Artikel 2 des Gesetzes vom 23. Mai 
2022 (BGBl. I S. 754) geändert worden ist).  
3  Under Article 5(2) of the draft law a new section 1b is  inserted into the Law on banking (Kreditwesengesetz in der 
Fassung der Bekanntmachung vom 9. September 1998 (BGBl. I S. 2776), das zuletzt durch Artikel 4 des Gesetzes vom 20. Juli 2022 (BGBl. I S. 1166) geändert worden ist). 
ECB-PUBLIC  
2 made by means other than cash, crypto assets or raw materials. The notary must verify the 
plausibility of the evidence provid ed before filing the transaction wi th the land registry. Where the 
consideration due for the real estate transacti on does not exceed the amount of EUR 10 000 the 
notary is under no obligation to verify that the pay ment was made by means other than cash, crypto 
assets or raw materials. As a consequence, the prohibition against settling real estate transactions 
in cash, crypto assets and raw materials applies in  respect of all real estate and share purchase 
transactions, regardless of the transaction value.  The draft law envisages the enforcement of the 
prohibition only for real estate transactions ( and not for share purchase transactions) where the 
consideration due exceeds the amount of EUR 10 000.  
1.3 As regards the automatic finding of  unreliability, the draft law provid es that a natural or legal person 
or a partnership is to be considered unreliable if a directly applicable European Communities or 
Union act implementing an economic restrictive me asure adopted by the Council of the European 
Union in the field of the Common Foreig n and Security Policy, published in the Official Journal of 
the European Communities  or the Official Journal of the European Union , provides that their funds 
and economic resources are to be frozen or that no funds or economic resources are to be made 
available to them, directly or indirectly.  
1.4 As regards the presumption of unreliability, as a general rule, a natural person is to be considered 
unreliable (as a rebuttable presumption) if he or she works as an executive director, supervisory 
board member or in a comparable position for a legal  person or partnership subject to a restrictive 
measure (hereinafter a ‘sanctioned entity’). As a general rule, a natural person is also to be 
considered unreliable (as a rebuttable presumption) if he or she serves the interests of a sanctioned 
entity as a member of a supervisory or manage ment board or similar supervisory body in an 
institution that is not a sancti oned entity. According to the expla natory memorandum accompanying 
the draft law, in order to rebut the presumption that  he or she is unreliable, a natural person has to 
prove that: (a) his or her involvement with t he sanctioned entity is especially minor; (b) the 
termination of the natural person’ s contract is initiated; or (c ) he or she cannot influence the 
undertaking in question.  
1.5 The draft law introduces the concept ‘unreliability of persons’ by way of inserting a definition into 
the Law on banking so that the concept applies to  any kind of reliability assessment under the Law 
on banking. In addition, the draft law introduces t he concept in various ot her German supervisory 
laws, including the Law on the supervision of payment services4, the Law on the supervision of 
insurance companies5, and the Law on the supervision of securities institutions6. 
 
2. Prohibition of cash payments in real estate and related share purchase transactions 
2.1 Cash continues to play an important role in society. Cash is generally useful as a payment 
instrument because it is widely accepted, fast and facilitates cont rol over the payer’s spending. 
 
4  Zahlungsdiensteaufsichtsgesetz vom 17. Juli 2017 (BGBl. I S. 2446; 2019 I S. 1113), das zuletzt durch Artikel 5 des 
Gesetzes vom 25. Juni 2021 (BGBl. I S. 2083) geändert worden ist. 
5  Versicherungsaufsichtsgesetz vom 1. April 2015 (BGBl. I S.  434), das zuletzt durch Artikel 5 des Gesetzes vom 20. 
Juli 2022 (BGBl. I S. 1166) geändert worden ist.  
6  Wertpapierinstitutsgesetz vom 12. Mai 2021 (BGBl. I S. 990), das zuletzt durch Artikel 9 des Gesetzes vom 3. Juni 
2021 (BGBl. I S. 1568) geändert worden ist. 
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3 Moreover, it is the only payment instrument that allows citizens to settle a transaction in central 
bank money, which is also settled instantly, while ensuring privacy7. In addition, the ability to pay 
in cash remains particularly important for certai n groups in society that, for various legitimate 
reasons, prefer to use cash rather than other pa yment instruments, or do not have access to the 
banking system and electronic means of payments.  These groups include not only elderly people, 
but also some disabled citizens, immigrants, so cially vulnerable citizens, minors and others with 
limited or no access to digital payment services8. Against this backdrop, the ECB closely monitors 
any national law developments that aim to limit cash payment possibilities and thereby interfere 
with citizens' right to pay in cash. 
2.2 Under the Treaty, the European System of Central Banks (ESCB) has the basic task of promoting 
the smooth operation of payment systems9, and the ECB has the exclusive right to authorise the 
issue of euro banknotes within the Union10. The euro banknotes issued by the ECB and the national 
central banks of the euro area are the only banknotes  with legal tender status within the euro area11. 
2.3 The concept of ‘legal tender’ of a means of payment denominated in a currency unit has been 
considered by the Court of Justice of the European Un ion. In particular, the Court has clarified that 
the concept of ‘legal tender’ signifies that this  specific means of paym ent cannot generally be 
refused in settlement of a debt, denominated in the same currency unit at its full face value, with 
the effect of discharging the debt. In clarifying the concept of ‘legal tender’ under Union law, the 
Court has taken into consideration Commission Recommendation 2010/191 of 22 March 2010 on 
the scope and effects of legal tender of euro banknotes and coins12, which provides useful guidance 
for the interpretation of the relevant provisions  of Union law. Point 1 of Recommendation 2010/191 
states that, where a payment obligation exists, t he legal tender of euro banknotes and coins should 
imply: (a) mandatory acceptance of  those banknotes and coins; (b) their acceptance at full face 
value; and (c) their power to discharge from payment  obligations. According to the Court, this shows 
that the concept of ‘legal tender’ encompasses, inter alia, an obligation in principle to accept 
banknotes and coins denominated in euro for payment purposes13. 
2.4 Insofar as it allows the Union legislature to lay down the measures nece ssary for the use of the 
euro as the single currency, the Court clarified t hat Article 133 of the Treaty empowers the Union 
legislature alone to specify the legal rules gover ning the status of legal tender accorded to 
banknotes and coins denominated in euro, insofar as that is necessary for the use of the euro as 
the single currency. Such excl usive competence precludes any competence on the part of the 
 
7  See paragraph 2.4 of Opinion CO N/2017/8; paragraph 2.1 of Opinion CO N/2019/41; paragraph 9.2.1 of Opinion 
CON/2020/13; paragraph 2.3 of  Opinion CON/2020/21; paragr aph 7.2.1 of Opinion CON/2021/9; paragraph 2.1 of 
CON/2021/18. All EC B opinions are published on EUR-Lex.  
8  See paragraph 1.5 of  Opinion CON/2019/41. 
9  Article 127(2) of the Treaty and Article 3. 1 of the Statute of t he ESCB and the ECB. 
10  First sentence of Article 128(1) of the Treaty and first s entence of Article 16 of the Stat ute of the ESCB and the ECB.  
11  Third sentence of Article 128(1) of the Treaty and third sentence of Article 16 of the Statute of  the ESCB and the 
ECB.  
12  OJ L 83, 30.3.2010, p. 70. 
13  See judgment of the Court of  Justice of 26 January 2021, Hessischer Rundfunk , C-422/19 and C-423/19, 
ECLI:EU:C:2021:63, paragraphs 46 to 49. 
ECB-PUBLIC  
4 Member States in the matter, unless they have been empowered by the Union to do so or for the 
implementation of Union acts14. 
2.5 However, the Court further clarified that the st atus of legal tender calls only for acceptance in 
principle of banknotes and coins denominated in  euro as a means of payment, not for absolute 
acceptance. The Union’s exclusive competence in matters of monetary policy is without prejudice 
to the competence of the Member States whose currency is the euro to regulate the procedures 
for settling pecuniary obligations, which do not affect  the principle that, as a general rule, it must 
be possible to discharge a payment obligation in cash. Thus, that exclusive competence does not 
prevent a Member State from adopting a measur e falling within one of the Member State’s 
competences; for instance, a Member State may, based on its competence to regulate 
administrative procedures, oblige the public administ ration to accept cash payments from citizens. 
Neither does it prevent a Member State, in the ex ercise of its own powers, from introducing, on 
legitimate public interest grounds, a derogati on from that obligation for statutorily imposed 
payments, subject to compliance with certain conditi ons. In particular, the obligation to accept euro 
banknotes and coins may, in principle, be restri cted by the Member Stat es for reasons of public 
interest and subject to the principle of proportionalit y. This means that any such restrictions must 
be proportionate to the public interest objective pursued. When limiting t he possibility, recognised 
by Union law, of generally discharging a payment obligation in banknotes and coins denominated 
in euro, Member States must ensure that any measur es comply with the principle of proportionality, 
which requires in particular that they are appropriat e for achieving the legitimate objectives pursued 
by the legislation at issue and do not go beyond w hat is necessary in order to achieve those 
objectives.15 
2.6 The Court has established that re strictions of the legal tender status  of euro banknotes in particular 
require that the legislation: (i) doe s not have the object or effect of establishing legal rules governing 
the status of legal tender of euro banknotes; (ii) does  not lead, in law or in fact, to abolition of those 
banknotes, in particular by calling into question the possibility, as a general rule, of discharging a payment obligation in cash; (iii) has been adopted for reasons of public interest; (iv) only entails a 
limitation on payments in cash that is appropriate for attaining the public interest objective pursued; 
and (v) only entails a limitation on payments in cash that does not go beyond what is necessary in order to achieve the public interest objective
16. 
2.7 Regarding the proportionality of a restriction of the legal tender st atus of euro banknotes, the Court 
requires not only that the measure is appropriate for attaining the public interest objective pursued, 
but also that it must not go bey ond what is necessary in order to  achieve that objective. The ECB 
has undertaken additional reflexion in its opinions with respect to whether limitations may be 
considered proportionate17. In particular, the ECB has noted t hat the broader and more general a 
 
14  See judgment of the Court of  Justice of 26 January 2021, Hessischer Rundfunk , C-422/19 and C-423/19, 
ECLI:EU:C:2021:63, paragraphs 50 to 52.  
15  See judgment of the Court of  Justice of 26 January 2021, Hessischer Rundfunk , C-422/19 and C-423/19, 
ECLI:EU:C:2021:63, paragraphs 55 to 56 and 67 to 70. 
16  See judgment of the Court of  Justice of 26 January 2021, Hessischer Rundfunk , C-422/19 and C-423/19, 
ECLI:EU:C:2021:63, paragraph 78.  
17  See paragraph 4 of Opinion CON/2022/5. 
ECB-PUBLIC  
5 limitation is, the stricter should be the interpreta tion of the requirement for the limitation to be 
proportionate to the objective pursued. When cons idering whether a limitation is proportionate, the 
adverse impact of the limitation in question an d whether alternative measures could be adopted 
that would fulfil the relevant objective with a less adverse impact should always be considered18. 
2.8 The scope of the draft law’s proposed prohibition  of cash payments appears to be broader than it 
might seem at first sight. The prohibition applies to  the purchase of real estate as well as the 
acquisition of shares in a company whose assets dire ctly or indirectly include immovable real estate 
located in Germany. Considering that many compan ies indirectly have assets that include real 
estate located in Germany, the draft law therefor e seems to impose a strict prohibition of cash 
payments for the acquisition of shares in most com panies, in addition to a strict prohibition of cash 
payments in real estate transactions. 
2.9 The ECB underlines that the explanatory memorandum accompanying the draft law explains that 
the proposed prohibition of cash payments is a response to the findings of the first National Risk 
Analysis in the fight against money laundering and terrorist financing, which identified specific 
money laundering risks in the area of cash and anon ymous payments and in the real estate sector. 
2.10 In the light of the foregoing, the ECB consider s that the draft law’s proposed prohibition of cash 
payments in real estate and share purchase transact ions neither has the object nor the effect of 
amending the legal rules governing the status of legal  tender of euro banknotes or coins. Since the 
draft law’s objective is it to fight money launderin g and the financing of terrorism, it can be said to 
pursue public interest objectives19.  
2.11 With regard to the condition that a cash restri ction should be proportionate, it is not specifically 
described in the explanatory memorandum to the dra ft law to what extent alternative and equally 
or more effective measures, other than the strict prohibition of cash payments in the real estate 
sector, could be adopted that would also fulfil the ob jective of the draft law. The fact that the 
prohibition of cash payments is only enforced for real estate transactions (and not for share 
purchase transactions) with a value exceeding EUR 10 000 may suggest that the prohibition is 
proportionate as regards those real estate tran sactions. This would be in line with previous 
assessments by the ECB that a prohibition on the receipt or payment of cash exceeding EUR 3 
000 and EUR 2 700, respectively, which is applicable to transactions where one of the parties is 
trading in goods in the course of their busin ess or professional activities, could be deemed 
proportionate to the objectives pursued20. However, in this instance the prohibition of cash 
payments applies in respect of all real estate and share purchase transactio ns, regardless of their 
value (i.e. it is not a cash restriction but a cash prohibition). Against this bac kground, it is difficult 
for the ECB to assess whether or not the proh ibition could be considered proportionate to the 
objective pursued.    
  
 
18  See paragraph 2.7 of Opinion CON/2017/8.  
19  The ECB has repeatedly recognised combatting money laun dering as being in the public interest. See Opinion 
CON/2014/37; Opinion CON/ 2017/18; Opinion CON/2019/4; and Opinion CON/2022/5.  
20  See paragraph 2.5 of Opinion CON/201 9/46 and paragraph 2.10 of Opinion CON/2020/33.  
ECB-PUBLIC  
6 3. Automatic finding or presumption of unre liability of persons affected by the Union 
restrictive measures regime   
3.1 The ECB understands that the automatic finding or presumption of unreli ability introduced by the 
draft law would apply to any kind of reliability as sessment in respect of any credit or financial 
institutions or insurance undertakings under app licable German banking or financial supervisory 
laws. As concerns credit instit utions in particular, the ECB under stands that this automatic finding 
or presumption of unreliability w ould apply to any kind of reliability assessment under the Law on 
banking, including, inter alia, assessments in the context of the acquisition of qualifying holdings in 
credit institutions21, the authorisation of financial holding companies and mixed financial holding 
companies22, the appointment of an administrator of the refinancing register23, the appointment of 
members of the management body  of a credit institution24, and the authorisation to conduct banking 
business or to provide financial services in Germany25.  
3.2 As regards credit institutions established in Germany, the ECB is responsible for exercising the 
prudential supervisory tasks conferred on it  by Council Regulation (EU) No 1024/201326. When 
carrying out its prudential supervisory tasks in respect of German credit institutions, the ECB 
applies the national legislation transposing all relevant Union law27, including the Law on banking 
and any amendments made to it by the draft law.  
3.3 The ECB takes note of the draft amendments and se ts out in this opinion for the consideration of 
the legislator several areas where the dr aft law could benefit from clarifications.  
3.4 As concerns the proposed rebu ttable presumption of unreliability of a natural person working as an 
executive director, supervisory board member or in a comparable position for a sanctioned entity, 
or serving the interests of a sanctioned entity, while the explanatory memorandum accompanying 
the draft law contains some examples of possible re asons for such rebuttal, the draft law itself does 
not specify which assessment criteria for a relia bility assessment (e.g. reputation and conflict of 
interest) are exactly affected by a natural person’ s exposure to a sanctioned entity and have to be 
assessed. Specifying reasons for such rebuttal in t he draft law could positively contribute to legal 
certainty for the natural persons that are affected and of the supervisory authorities assessing their 
submissions. The ECB further understands that the  presumption of unreli ability would cease to 
apply as soon as the relevant sanction ceases to exist, whether by virtue of the removal of a 
sanctioned entity from a sanctions list, or a final judicial decision ordering such removal, or upon 
termination of the function of t he concerned natural person in a sanctioned entity, or otherwise.  
3.5 Furthermore, it may be useful to clarify, in the draft law or the explanatory memorandum 
accompanying it, how notification requirements for supervised entities established in Germany vis-
à-vis their respective s upervisory authorities will be affected once the draft law enters into force. 
 
21  See Section 2c(1) Law on banking. 
22  See Section 2f(1) Law on banking. 
23  See Section 22e(2) Law on banking. 
24  See Section 25c(1) and 25d(1) Law on banking. 
25  See Section 32(1) Law on banking. 
26  Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the European Central Bank 
concerning policies relating to the prudential supervisi on of credit institutions (OJ L 287, 29.10.2013, p. 63). 
27  See Article 4(3) of Regul ation (EU) No 1024/2013.  
ECB-PUBLIC  
7 The ECB understands that the presumption of unrelia bility has an immediate effect on, for example, 
persons holding positions as members of a credit institution’s management body. The ECB 
understands that the affected supervised entitie s and individuals would need to treat the new 
presumption of unreliability as a new fact affect ing the suitability of t he persons who meet the 
criteria established in the draft law28 for the exercise of their functi ons within supervised entities, or 
as their shareholders. As such, the fulfilment of the conditions would have to be notified by the 
affected supervised entities to the respective su pervisory authority, which would then assess the 
impact of these new facts on the suitability of respec tive persons in accordance with the relevant 
legal provisions. 
3.6 It would also be useful to clarify whether or how Article 5(2) of the draft law would apply to persons 
associated with the persons who ar e explicitly listed by name in the Union regulations setting out 
the respective restrictive measures. Such associat ed persons are typically referred to in the Council 
regulations that establish Union restrictiv e measures in the form of asset freezes29. 
 This opinion will be published on EUR-Lex.  
 
 Done at Frankfurt am Main, 5 December 2022. 
 
[signed]  
The President of the ECB 
Christine LAGARDE 
 
28  See Article 5(2) of the draft law (which inserts a new Article 1b in the Law on banking). 
29  See, for example, Article 2 of Council Regulation (EU) No 269/2014 of  17 March 2014 concerning restrictive 
measures in respect of actions undermining or threatening t he territorial integrity, sovereignty and independence of 
Ukraine (OJ L 78, 17.3.2014, p. 6).