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 restrictive measures regime (CON/2022/43)
Date: 2022-12-05
Institutions: European Central Bank
Subjects: banking supervision, money

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 restrictive 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 the 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  institutions  pursuant  to  Article  127(6)  of  the  Treaty.  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 main purpose of the draft law is to introduce structural improvements 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 unreliability 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 transaction with the land registry that the payment was 

1   

2  

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). 

Under  Article  4(5)  of  the  draft  law,  a  new  section  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).  

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). 

 
 
 
 
 
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made  by  means  other  than  cash,  crypto  assets  or  raw  materials.  The  notary  must  verify  the 

plausibility of the evidence provided before filing the transaction with the land registry. Where the 

consideration due for the real estate transaction does not exceed the amount of EUR 10 000 the 

notary is under no obligation to verify that the payment 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 provides 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 measure adopted by the Council of the European 

Union in the field of the Common Foreign 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  management  board  or  similar  supervisory  body  in  an 

institution that is not a sanctioned entity. According to the explanatory 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  the  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 the concept in various other 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  control  over  the  payer’s  spending. 

4  

5  

6  

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. 

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.  

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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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  certain  groups  in  society  that,  for  various  legitimate 

reasons, prefer to use cash rather than other payment 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, socially 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 Union. In particular, the Court has clarified that 

the  concept  of  ‘legal  tender’  signifies  that  this  specific  means  of  payment  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, the 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 necessary for the use of the 

euro as the single currency, the Court clarified that Article 133 of the Treaty empowers the Union 

legislature  alone  to  specify  the  legal  rules  governing  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  exclusive  competence  precludes  any  competence  on  the  part  of  the 

7  

8  
9  
10  
11  

12  
13  

See paragraph 2.4 of Opinion CON/2017/8; paragraph 2.1 of Opinion CON/2019/41; paragraph 9.2.1 of Opinion 
CON/2020/13; paragraph 2.3 of Opinion CON/2020/21; paragraph 7.2.1 of Opinion CON/2021/9; paragraph 2.1 of 
CON/2021/18. All ECB opinions are published on EUR-Lex.  

See paragraph 1.5 of Opinion CON/2019/41. 
Article 127(2) of the Treaty and Article 3.1 of the Statute of the ESCB and the ECB. 

First sentence of Article 128(1) of the Treaty and first sentence of Article 16 of the Statute of the ESCB and the ECB.  

Third sentence of Article 128(1) of the Treaty and third sentence of Article 16 of the Statute of the ESCB and the 
ECB.  

OJ L 83, 30.3.2010, p. 70. 

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. 

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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  status  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  measure  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 administration to accept cash payments from citizens. 

Neither does it prevent a Member State, in the exercise of its own powers, from introducing, on 

legitimate  public  interest  grounds,  a  derogation  from  that  obligation  for  statutorily  imposed 

payments, subject to compliance with certain conditions. In particular, the obligation to accept euro 

banknotes and coins may, in principle, be restricted by the Member States for reasons of public 

interest and subject to the principle of proportionality. This means that any such restrictions must 

be proportionate to the public interest objective pursued. When limiting the possibility, recognised 

by Union law, of generally discharging a payment obligation in banknotes and coins denominated 

in euro, Member States must ensure that any measures comply with the principle of proportionality, 

which requires in particular that they are appropriate for achieving the legitimate objectives pursued 

by  the  legislation  at  issue  and  do  not  go  beyond  what  is  necessary  in  order  to  achieve  those 

objectives.15 

2.6 

The Court has established that restrictions of the legal tender status of euro banknotes in particular 

require that the legislation: (i) does 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 objective16. 

2.7 

Regarding the proportionality of a restriction of the legal tender status 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 beyond 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 that the broader and more general a 

14  

15  

16  

17  

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.  

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. 

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.  

See paragraph 4 of Opinion CON/2022/5. 

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limitation  is,  the  stricter  should  be  the  interpretation  of  the  requirement  for  the  limitation  to  be 

proportionate to the objective pursued. When considering whether a limitation is proportionate, the 

adverse impact of the limitation in question and 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 directly or indirectly include immovable real estate 

located  in  Germany.  Considering  that  many  companies  indirectly  have  assets  that  include  real 

estate  located  in  Germany,  the  draft  law  therefore  seems  to  impose  a  strict  prohibition  of  cash 

payments for the acquisition of shares in most companies, 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 anonymous payments and in the real estate sector. 

2.10 

In the light of the foregoing, the ECB considers that the draft law’s proposed prohibition of cash 

payments in real estate and share purchase transactions 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 laundering and the financing of terrorism, it can be said to 

pursue public interest objectives19.  

2.11  With regard to the condition that a cash restriction should be proportionate, it is not specifically 

described in the explanatory memorandum to the draft 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  objective  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  transactions.  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  business  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 transactions, regardless of their 

value (i.e. it is not a cash restriction but a cash prohibition). Against this background, it is difficult 

for  the  ECB  to  assess  whether  or  not  the  prohibition  could  be  considered  proportionate  to  the 

objective pursued.    

18  
19  

20  

See paragraph 2.7 of Opinion CON/2017/8.  

The  ECB  has  repeatedly  recognised  combatting  money  laundering  as  being  in  the  public  interest.  See  Opinion 
CON/2014/37; Opinion CON/2017/18; Opinion CON/2019/4; and Opinion CON/2022/5.  
See paragraph 2.5 of Opinion CON/2019/46 and paragraph 2.10 of Opinion CON/2020/33. 

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3. 

Automatic  finding  or  presumption  of  unreliability  of  persons  affected  by  the  Union 

restrictive measures regime  

3.1 

The ECB understands that the automatic finding or presumption of unreliability introduced by the 

draft  law  would  apply  to  any  kind  of  reliability  assessment  in  respect  of  any  credit  or  financial 

institutions or insurance undertakings under applicable German banking or financial supervisory 

laws. As concerns credit institutions in particular, the ECB understands that this automatic finding 

or presumption of unreliability would 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 sets out in this opinion for the consideration of 

the legislator several areas where the draft law could benefit from clarifications. 

3.4 

As concerns the proposed rebuttable 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 reasons for such rebuttal, the draft law itself does 

not specify which assessment criteria for a reliability 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 the 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  unreliability  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 the 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 supervisory authorities will be affected once the draft law enters into force. 

21  
22  
23  
24  
25  
26  

27  

See Section 2c(1) Law on banking. 
See Section 2f(1) Law on banking. 

See Section 22e(2) Law on banking. 

See Section 25c(1) and 25d(1) Law on banking. 

See Section 32(1) Law on banking. 

Council Regulation (EU) No 1024/2013 of 15 October 2013 conferring specific tasks on the European Central Bank 
concerning policies relating to the prudential supervision of credit institutions (OJ L 287, 29.10.2013, p. 63). 

See Article 4(3) of Regulation (EU) No 1024/2013.  

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The ECB understands that the presumption of unreliability 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  entities  and  individuals  would  need  to  treat  the  new 

presumption  of  unreliability  as  a  new  fact  affecting  the  suitability  of  the  persons  who  meet  the 

criteria established in the draft law28 for the exercise of their functions 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 supervisory authority, which would then assess the 

impact of these new facts on the suitability of respective 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 are explicitly listed by name in the Union regulations setting out 

the respective restrictive measures. Such associated persons are typically referred to in the Council 

regulations that establish Union restrictive 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  
29  

See Article 5(2) of the draft law (which inserts a new Article 1b in the Law on banking). 

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 the territorial integrity, sovereignty and independence of 
Ukraine (OJ L 78, 17.3.2014, p. 6). 

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