Opinion of the European Central Bank of 8 February 2013 on limitations on cash payments in the context of payment of wages (CON/2013/11)
Date: 2013-02-08
Institutions: European Central Bank
Subjects: Finland, fight against crime, money, national law, pay, tax evasion

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 8 February 2013 

on limitations on cash payments in the context of payment of wages 

(CON/2013/11) 

Introduction and legal basis 

On 11 January 2013, the European Central Bank (ECB) received a request from the Finnish Ministry of 

Employment and the Economy for an opinion on a draft law amending Chapter 2 Section 16 of the Law 
on employment contracts1 and Chapter 2 and Chapter 8 Section 4 of the Law on accounting2 (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 indent 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 provisions3, 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 

The  draft  law  is  part  of  a  Government  action  programme  for  2012-20154,  which  aims,  inter  alia,  to 

combat  tax  evasion.  The  draft  law  provides  that  wages  should,  as  a  general  rule,  be  paid  into  a  bank 

account designated by the employee. The aim is to reduce the use of cash, and thereby to make it more 

difficult for employers to make undocumented payment of wages. 

2. 

General observations  

2.1  The ECB notes that the draft law is in compliance with Union law5, and in particular with recital 19 
of  Council  Regulation  (EC)  No  974/98  of  3  May  1998  on  the  introduction  of  the  euro6,  which 

states  that  ‘limitations  on  payments  in  notes  and  coins,  established  by  Member  States  for  public 

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6  

Työsopimuslaki 26.1.2001/55. 
Kirjanpitolaki 30.12.1997/1336. 
OJ L 189, 3.7.1998, p. 42. 
Tehostettu  harmaan  talouden  ja  talousrikollisuuden  torjunnan  toimintaohjelma  vuosille  2012–2015,  valtioneuvoston 
periaatepäätös 19.1.2012. 
See  paragraph  2.3.2  of  Opinion  CON/2010/36  and  paragraph  2.1  of  opinion  CON/2012/33.  All  ECB  opinions  are 
published on the ECB’s website at www.ecb.europa.eu. 
OJ L 139, 11.5.1998, p. 1. 

 
 
 
 
 
                                                 
ECB-PUBLIC 

reasons, 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 

acknowledges  that:  (i) such  other  lawful  means  for  the  settlement  of  monetary  debts,  other  than 

cash, are available in Finland; 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. 

2.2  However,  limitations  on  payments  in  cash  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 restrictive measures of the draft law may also affect relatively low value payments. Any 

negative impact of the proposed limitations should be carefully weighed against the public benefits 

expected to be derived from them. 

3. 

Specific observations 

3.1  The  ECB  understands  that  the  proposed  limitations  on  payments  in  cash  would  only  affect  the 

payment  of  wages,  while  payments  in  cash  in  relation  to  other  transactions  (such  as  between 

businesses, and between businesses and customers) would not be affected. 

3.2  The  ECB  notes  that  payment  of  wages  in  cash  would  still  be  allowed  under  the  draft  law  for 

‘compelling reasons’. While the draft law does not define the meaning of ‘compelling reasons’, the 

explanatory  memorandum  refers  to  situations  where,  for  reasons  beyond  the  control  of  the 

employer,  an  employee  would  not  otherwise  have  access  to  their  wages  within  the  time  period 

agreed  or  stipulated  by  law  (e.g.  where  the  employment  contract  is  terminated  with  immediate 

effect) and to situations where an employee does not have a bank account. 

3.3 

In addition, the ECB notes that the draft law does not require employees who do not already have a 

bank account to open one for the payment of their wages; such employees would still be entitled to 

have their wages paid in cash. In this context, the ECB also notes that while the failure to include in 

the  accounting  documents  a  receipt  (or  other  form  of  documentation  of  cash  payment  of  wages) 

signed  by  the  employee  would  constitute  an  accounting  violation  punishable  by  a  fine  under  the 

draft  law,  the  payment  of  wages  in  cash  would  not  of  itself  constitute  a  punishable  violation  or 

crime. 

3.4  The  ECB  further  notes  that,  according  to  the  explanatory  memorandum,  cash  payments  and  the 

holding of large amounts of cash are not typical business practices in Finland. 

3.5 

In addition, the ECB acknowledges that the Finnish Ministry of Employment and the Economy has 

conducted a thorough analysis of the expected economic effects of the restrictive measures on cash 
payments  of  wages  laid  down  in  the  draft  law7.  According  to  this  analysis,  the  draft  law  would 

result  in  a  very  small  increase  of  costs  for  a  minority  of  employers,  whereas  there  would  be  no 

increase in costs for the majority of employers, as payment of wages into a bank account is already 

standard practice in Finland. 

7  

See  a  special  section  in  the  explanatory  memorandum  dedicated  to  the  expected  economic  effects  of  the  limitation  of 
payments of wages in cash. 

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ECB-PUBLIC 

3.6  Against this background, the ECB is of the view that the proposed restrictions on cash payments as 

described above appear to be proportionate to the objectives pursued by the draft law. 

This opinion will be published on the ECB’s website. 

Done at Frankfurt am Main, 8 February 2013. 

[signed] 

The President of the ECB 

Mario DRAGHI 

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