Opinion of the European Central Bank of 1 February 2019 on limitations to cash payments (CON/2019/4)
Date: 2019-02-01
Institutions: European Central Bank
Subjects: Spain, commercial transaction, fight against crime, money, national law, payment, tax offence

EN 

ECB-PUBLIC 

OPINION OF THE EUROPEAN CENTRAL BANK 

of 1 February 2019  

on limitations to cash payments 

(CON/2019/4) 

Introduction and legal basis 

On 28 November 2018 the European Central Bank (ECB) received a request from the Banco de España, 

on  behalf  of  the  Spanish  State  Secretary  for  Finance,  for  an  opinion  on  a  draft  law  on  measures  for  the 

prevention  of  and  fight  against  fiscal  fraud,  transposing  Council  Directive  (EU)  2016/1164  of  July  2016 

laying down rules against tax avoidance practices that directly affect the functioning of the internal market 

and  Council  Directive  (EU)  2017/1852  of  10  October  2017  on  tax  dispute  resolution  mechanisms  in  the 

European Union, and on the amendment of specific tax rules (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 1, 

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  draft  law  intends  to  reinforce  the  prevention  of  and  fight  against  fiscal  fraud.  One  of  the 
measures it provides for is an amendment to Law 7/20122 further limiting the amounts that can be 

paid  in  cash  in  transactions  where  at  least  one  of  the  parties  acts  in  a  professional  or  business 

capacity.  

1.2 

It is proposed that the existing cash payment limit be lowered from EUR 2 500 to EUR 1 000 in the 

case  of  transactions  where  at  least  one  of  the  parties  acts  in  a  professional  or  business  capacity. 

The existing cash payment limit is also lowered from EUR 15 000 to EUR 10 000 where the payer is 

a natural person not having their tax residence in Spain and not acting in a professional or business 

capacity.  The  existing  limit  of  EUR  2  500  for  payments  made  by  natural  persons  not  acting  in  a 

professional  or  business  capacity  and  having  their  tax  residence  in  Spain  will  not  be  modified,  to 

minimise  the  draft  law’s  collateral  effects  on  households.  For  the  purpose  of  calculating  the 

applicable  limits,  where  payment  for  the  delivery  of  goods  or  the  performance  of  services  which 

comprise  one  transaction  has  been  divided  into  more  than  one  transaction  or  payment,  those 

transactions or payments will be added together. Moreover, it will continue to be the case that these 

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2  

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). 
Law 7/2012 of 29 October 2012 amending tax and budget rules and adapting financial rules for the intensification of 
action for the prevention of and fight against fraud. See also Opinion CON/2012/33. All ECB opinions are published on 
the ECB’s website at www.ecb.europa.eu. 

 
 
 
 
                                                 
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limitations  do  not  apply  to  transactions  between  parties  not  acting  in  a  professional  or  business 

capacity,  or  to  payments  and  deposits  made  with  credit  institutions.  The  draft  law  also  modifies 

certain procedural aspects of the cash payment limitation regime’s sanctioning procedure.  

These  provisions  are  intended  to  apply  to  all  payments  made  following  the  entry  into  force  of  the 

draft  law,  including  payments  which  relate  to  transactions  agreed  prior  to  the  introduction  of  the 

proposed limitations. 

2. 

General observations  

2.1  The ECB understands that, under the draft law, a) a limit of EUR 1 000 applies to cash payments in 

transactions where the payer acts in a professional or business capacity, regardless of the location 

of the parties’ tax residence; b) a limit of EUR 2 500 applies to cash payments from natural persons 

not acting in a professional or business capacity who are tax residents in Spain to parties acting in a 

professional  or business capacity; c) a limit of EUR 10 000 applies to cash payments from natural 

persons  not  acting  in  a  professional  or  business  capacity  who  are  not  tax  residents  in  Spain  to 

parties  acting  in  a  professional  or  business  capacity;  d)  no  limit  applies  to  cash  payments  in 

transactions where none of the parties are acting in a professional or business capacity; and e) no 

limit applies to cash payments and deposits made with credit institutions.  

2.2  Commission Recommendation 2010/191/EU3 states that the acceptance of payments in cash should 

be  the  rule,  but  acknowledges  that  cash  may  be  refused  for  reasons  related  to  the  ‘good  faith 

principle’, without this constituting a breach of the legal tender status of cash. Neither Union law nor 

Recommendation  2010/191/EU  explicitly  addresses  whether,  nor  to  what  extent,  it  may  be 

permissible  to  introduce  a  more  general  limitation  to  the  obligation  to  accept  euro  cash  payments. 

Therefore,  Union  law  must  be  interpreted  in  order  to  ascertain  the  conditions  that  a  limitation  on 

payments  in  euro  notes  and  coins  should  fulfil,  including  the  conditions  that  should  be  fulfilled  to 

comply  with  the  legal  tender  status  of  euro  banknotes  and  coins  when  general  limitations  to  the 
obligation to accept cash payments are introduced4. 

2.3  Without prejudice to the specific considerations in paragraphs 3.1 to 3.4, the draft law, in its general 

provisions,  must  comply  with  Union  law;  in  particular,  any  limitation  to  cash  payments  needs  to 
comply  with  the  legal  tender  status  of  euro  banknotes 5.  In  this  context,  recital  19  of  Council 
Regulation (EC) No 974/9846 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  coins,  provided  that  other  lawful  means  for  the  settlement  of  monetary  debts  are 
available’ 7. Additionally, these limitations should also be effective and proportionate to the objectives 

pursued  and not go beyond  what is  necessary  to  achieve such  objectives,  in order to comply  with 

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4  

5  
6  
7  

Commission  Recommendation  2010/191/EU  of  22  March  2010  on  the  scope  and  effects  of  legal  tender  of  euro 
banknotes and coins (OJ L 83, 30.3.2010, p 70). 
See  paragraph  2.1  of  Opinion  CON/2017/18,  paragraph  3.1  of  Opinion  CON/2017/20,  paragraph  2.3  of  Opinion 
CON/2017/27, and paragraph 2.2 of Opinion CON/2017/40.  
See paragraph 2.4 of Opinion CON/2017/18 and paragraph 2.5 of Opinion CON/2017/40.  
Council Regulation (EC) No 974/98 of 3 May 1998 on the introduction of the euro (OJ L 139, 11.5.1998, p. 1). 
See, for example, Opinions CON/2013/18, CON/2014/4 and CON/2014/37.  

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the legal tender status of euro banknotes. 

2.4  The ECB acknowledges that the draft law’s objective of preventing and combating tax evasion may, 

in general, constitute a ‘public reason’ justifying the establishment of limitations on cash payments. 

The ECB also considers that other lawful means for the settlement of monetary debts are available 
in Spain 8. However, these other means may have different characteristics compared to cash and are 

not in all cases fully equivalent alternatives to cash payments.  

2.5 

Limitations on cash payments should, additionally, fulfil the proportionality requirement described in 

paragraph 2.3 above, especially in view of the fact that the measures set out in the draft law affect 

transactions  between  natural  persons  and  involve  payments  of  relatively  small  amounts.  Any 

negative  impact  of  the  proposed  limitations  should  therefore  be  carefully  weighed  against  the 

anticipated  public  benefits.  When  considering  whether  a  limitation  is  proportionate,  the  adverse 

impact  of  the  limitation  in  question  should  always  be  considered,  as  well  as  whether  alternative 
measures could be adopted that would fulfil the relevant objective and have a less adverse impact9. 

2.6  Furthermore, it should be borne in mind that the ability to pay in cash remains particularly important 

for certain groups in society that, for various legitimate reasons, prefer to use cash rather than other 

payment  instruments.  Cash  is  generally  also  appreciated  as  a  payment  instrument  because  it  is 

widely  accepted,  fast  and  facilitates  control  over  the  payer’s  spending.  Moreover,  it  is  a  means  of 

payment that allows citizens to instantly settle a transaction and is the only method of settlement in 

central bank money and at face value which does not carry the legal possibility of imposing a fee for 

the  use  of  this  means  of  payment.  Also,  cash  payments  do  not  require  a  functional  technical 

infrastructure and related investment, and are always available; this is of particular relevance in the 

case  of  outage  of  electronic  payments.  Additionally,  cash  payments  facilitate  the  inclusion  of  the 
entire population in the economy by allowing it to settle any kind of financial transaction in this way10.  

3. 

Specific observations 

3.1  The explanatory memorandum to the draft law  mentions that for transactions where the  payer is a 

natural person (not acting in a professional or business capacity) with a tax residence in Spain, no 

change  in  the  threshold  of  EUR  2  500  is  proposed  in  order  to  minimise  the  draft  law’s  collateral 

effects  on  households.  Apart  from  this  one  exception,  the  explanatory  memorandum  does  not 

address the social impact of the proposed substantial lowering of the limits on cash payments.  

3.2  The  proposed  EUR  1  000  limit  on  cash  payments  needs  to  take  into  account  the  advantages  of 

having  limits  on  cash  payments  in  place  and  the  potential  inconvenience  thereof  for  regular 

transactions  in  certain  market  segments.  In  this  regard,  it  should  be  noted  that  Directive  (EU) 
2015/849 of the European Parliament and of the Council11, while confirming the vulnerability of large 

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9  

10  

11  

See paragraph 2.1 of Opinion CON/2012/33.  
See, for example, paragraph 2.3 of Opinion CON/2014/4, paragraph 2.3 of Opinion CON/2014/37, paragraphs 2.6 and 
2.7 of Opinion CON/2017/8 and paragraphs 2.5 and 2.6 of Opinion CON/2017/18. 
See  paragraph  2.6  of  Opinion  CON/2017/18,  paragraph  3.4  of  Opinion  CON/2017/20,  paragraph  2.8  of  Opinion 
CON/2017/27 and paragraph 2.7 of Opinion CON/2017/40.  
Directive (EU) 2015/849 of the European Parliament and of the Council of 29 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  the  Council,  and  repealing  Directive  2005/60/EC  of  the  European 

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cash payments to money laundering and terrorist financing, requires that persons trading in goods, 

who  are  otherwise  not  obliged  entities  under  that  Directive,  be  classified  as  obliged  entities  and 

apply  customer  due  diligence  measures  only  to  the  extent  that  payments  are  made  or  received  in 

cash  in  amounts  of  EUR  10  000  or  more.  This  implies  that  the  draft  law  should  establish  a 

proportionate  threshold  for  limits  on  cash  payments,  taking  into  account  the  objectives  of  such 
limits12. Against this background, the ECB considers the lowering of the limit on cash payments in 

transactions  where  the  payer  is  acting  in  a  professional  or  business  capacity  to  EUR  1  000  to  be 

disproportionate, in the light of the potentially adverse impact on the cash payment system. Indeed, 

this limit makes it more difficult to settle legitimate transactions using cash as a means of payment, 
thus  endangering  the  concept  of  legal  tender  enshrined  in  the  Treaty13.  Moreover,  as  experience 

within the Union has shown, certain cashless payment instruments may be temporarily unavailable 

as they depend on the underlying technical infrastructure operated by payment service providers. In 

such contingencies transactions in cash above the cash payment limits may be required. 

3.3  Regarding  the  limit  of  EUR  10  000  for  cash  payments  made  by  natural  persons  not  acting  in  a 

professional  or  business  capacity  who  are  not  tax  residents  in  Spain  to  parties  acting  in  a 

professional or business capacity, there seems to be no justification as to why a different standard 

should  be  established  for  payments  made  by  non-residents;  this  seems  to  discriminate  against 
payments made by residents14.  

3.4  The sanctioning regime established by the draft law seems excessive and, in particular, the fine of 
25%  of  the  amount  paid15  appears  disproportionately  high.  The  ECB  reiterates  that  limitations  on 

cash  payments  should  not  go  beyond  what  is  necessary  to  achieve  their  objectives,  and  that  any 

negative  impact  of  the  proposed  limitations  should  be  carefully  weighed  against  the  anticipated 

public  benefits.  When  considering  whether  a  limitation  is  proportionate,  the  adverse  impact  of  the 

limitation  in  question  should  always  be  considered.  A  sanction  that  would  apply  to  any  breach, 

regardless  of  the  underlying  situation,  does  not  seem  to  comply  with  the  proportionality 
requirement16.  

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

Done at Frankfurt am Main, 1 February 2019. 

[signed] 

The President of the ECB 

Mario DRAGHI 

Parliament and of the Council and Commission Directive 2006/70/EC (OJ L 141, 5.6.2015, p. 73).  
See paragraph 3.2 of Opinion CON/2017/18 and paragraph 2.10 of Opinion CON/2017/27.  
See paragraph 3.1 of Opinion CON/2017/18 and paragraph 2.9 of Opinion CON/2017/27.  
See paragraph 3.2 of Opinion CON/2017/18. 
See Article 16 of the draft law. 
See paragraph 3.6 of Opinion CON/2017/18.  

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