EN ECB-PUBLIC  
 
 
OPINION OF THE EUROPEAN CENTRAL BANK 
of 17 January 2014 
on limitations on cash payments 
(CON/2014/4) 
 
Introduction and legal basis 
On 11 December 2013, the European Central Bank (E CB) received a request from the Lithuanian 
Ministry of Finance for an opinion on a draft law amending the Civil Code of Lithuania (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 aims to combat tax evasion and the shadow economy by means of providing that 
transactions between any persons can only be settled or paid in cash if their amount is not higher 
than LTL 10 000 (around EUR 2 900) or the foreign cu rrency equivalent. The draft law also allows 
other laws to establish lower limits for such se ttlements and other payments, and cases where only 
non-cash settlement is possible. 
1.2 The draft law also expands the list of interm ediaries through which non-cash settlements or other 
payments can be made. In addition to banks, such  settlements can be effected through any other 
payment service providers. 
1.3 The proposed limitations are subject to sever al exceptions. First, the limitations apply to 
settlements and other payments to be made on the basis of transactions, while any other payments 
are not affected, e.g. dividends and bonuses paid by companies, other payments to shareholders, 
compensation for damages
2. Second, the amount of cash is not limited if a person is settling or 
paying for a transaction by paying or withdrawing cash through a payment service provider; in this case the persons need to prove their identity. Third,  the limitations are not applicable if immediate 
                                                 
1 OJ L 189, 3.7.1998, p. 42. 
2 Examples of such exceptions are provided for in the explanatory memorandum. 
ECB-PUBLIC  
2 non-cash settlement is not possible due to (a) the fa ct that no payment service provider operates at a 
location where a settlement or payment is taking place (e.g. in remote rural locations), or (b) other 
‘objective reasons’, e.g. a transaction is made on a day when payment service providers and/or 
payment and settlement systems are not operating.  Such cases should be reported to the competent 
national authority. 
 2. General observations  2.1 Although Union law only regulates restrictions on cash payments in euro, the ECB considers it 
appropriate to assess the draft law’s provisions against the relevant Eurosystem practices.  
2.2 The draft law is in compliance with Union la w, and in particular with recital 19 of Council 
Regulation (EC) No 974/98
3, which states that ‘limitations on payments in notes and coins, 
established by Member States for public reasons, ar e not incompatible with the status of legal 
tender of euro banknotes and coins, provided th at other lawful means for the settlement of 
monetary debts are available’4. The ECB acknowledges that: (a) other lawful means for the 
settlement of monetary debts, ensuring similar bene fits to those of cash, are indeed available in 
Lithuania; and (b) the draft law’s objectives of combating tax evasion and the shadow economy qualify as public reasons outweighing the imp act of the limitations on cash payments.  
2.3 In any case, limitations on cash payments should be proportionate to the objectives pursued and 
should not go beyond what is necessary to achieve such objectives, especially in view of the fact 
that the draft law’s measures may also affect re latively low value payments. Any negative impact 
of the proposed limitations should be carefully weig hed against the public benefits expected to be 
derived from them.  
 3. Specific observations  
3.1 The draft law provides that non-cash settlement s are to be made through the payment service 
providers with which the relevant accounts are ope ned, if other laws do not provide otherwise. 
 However, as stated in the explanatory memora ndum, 6.5 % of the Lithuanian population currently 
does not have a payment account. The ECB recommends that payment accounts, as other lawful means for the settlement of monetary debts other than cash, should be more easily accessible to the 
whole population. In this regard, the ECB notes the recent Union legislative initiatives in this field, 
in particular the proposal for a directive on the comparability of fees related to payment accounts, 
payment account switching and access to payment accounts with basic features
5.  
                                                 
3 Council Regulation (EC) No 974/98 of  3 May 1998 on the introduction of the euro (OJ L 139, 11.5.1998, p. 1). 
4 See most recently Opinion CON/2013/18. All ECB opinions ar e published on the ECB’s website at www.ecb.europa.eu. 
5 COM(2013) 266 final. See also Opinion CON/2013/ 77, in particular paragraphs 2 and 3.3. 
ECB-PUBLIC  
3 3.2 The ECB understands that the draft law is one of the first national legislative steps concerning 
general limitations6 on cash payments in combating tax evasion and the shadow economy7. 
Therefore, the proposed limitations are subject to several exceptions, as described in paragraph 1.3 
above. The ECB invites the consulting authority to  consider whether the proposed limitations can 
achieve the objectives pursued in view of the number and open-ended nature of the exceptions. 
 In one case, no limitations apply due to the fact  that no payment service provider operates at a 
location where a settlement or payment is taking place or due to other ‘objective reasons’; such 
cases have to be reported to the competent national au thority. However, the draft law is not clear as 
to what information (e.g. the transaction, the pa yment in cash or the objective reasons) should be 
reported to the competent national authority, or by whom it should be reported. The ECB understands that these matters will be specified in other legislation. 
 This opinion will be published on the ECB’s website.   Done at Frankfurt am Main, 17 January 2014. 
 
[signed] 
 
The President of the ECB 
Mario DRAGHI 
                                                 
6  Certain limitation on settlements in cash are already applicable  for the purpose of combating tax evasion, as provided for 
in the recent amendment to the Law on tax administration, on which the ECB was consulted (see Opinion CON/2012/36). 
7  As stated in the explanatory memorandum.