EU Regulation on Cash Payment Limits

This follows the introduction of Regulation (EU) 2024/1624 (Regulation) “on the prevention of the use of the financial system for the purposes of money laundering or terrorist financing” which entered into force in July 2024, giving businesses a three-year period to prepare. This Regulation aims to harmonise rules across the EU, as some countries have no cash-payment limits while others impose strict restrictions, creating loopholes.  

This Union-wide limit on cash transactions applies to payments for goods and services where at least one party is acting in a professional or business capacity, as provided for in Article 80 of the Regulation. This limit is imposed on single transactions as well as multiple cash payments over time which appear to be linked. This will be regarded as a single cash payment that has exceeded the cash limit. By placing such a cap, the EU aims to force more payments to be cashless, thus, being made by easier traceable methods such as; 

• Bank transfers 

• Debit and credit card payments 

• Electronic money 

Exceptions  

This cash limit does not apply to payments made exclusively between private individuals acting in a non-professional capacity, even where the amount exceeds ten thousand euro, and paid in cash. The Regulation specifies that such exemptions apply only where both parties are natural persons and the transaction is not connected to any business or professional activity.  

Because the limit targets cash payments for goods and services, no restriction is placed on the possession, withdrawal or deposit of cash. However, even though no cap exists with regards to the sum of cash that may be withdrawn or deposited, due diligence checks for large cash movements may be necessary to comply with anti-money laundering obligations.  

Action Points for Businesses 

This Regulation establishes that cash payments exceeding three thousand euro (€3000), but below the threshold, trigger an enhanced monitoring and customer identification obligation. Businesses must implement know-your-client (KYC) procedures, including collecting and verifying personal details of the payer typically through a valid government-issued ID and retain records of these transactions for at least five years. Businesses must also monitor payment patterns to detect suspicious behaviour, particularly structured or linked transactions designed to circumvent the cash limit. In this case a Suspicious Transaction Report (STR) is to be filed with the FIAU.   

To comply effectively, businesses should review and update internal payment policies and procedures to ensure that cash transactions are flagged appropriately. This includes: 

• Updating software to identify payments approaching thresholds; 

• Pattern recognition training to recognise structured payments for staff; 

• Updating internal policies to comply with the Regulation; 

• Monitoring national legislation in case stricter limits are introduced.  

Lower National Limits 

The Regulation establishes a maximum permissible limit for cash payments but allows Member States to retain or introduce lower thresholds. France and Spain cap most business-related cash payments at one thousand (€1,000) due to aggressive anti-tax evasion and anti-money laundering policies. Greece, following its 2008 financial collapse, massive budget deficit, and widespread tax evasion, was forced to adopt severe austerity measures to qualify for EU bailout assistance. As a result, it introduced the strictest cash-payment limit of five hundred euro (€500) in the EU. Malta, through the Subsidiary Legislation S.L. 373.04, restricted cash payments of €10,000 or more for certain highvalue types of assets including immovable property, antiques, jewellery, motor vehicles, sea vessels and works of art.  

In the event of a breach of the cash limit, the penalty depends on national enforcement. The Regulations simply sets out that they are to be “effective, proportionate and dissuasive penalties.” 

The regulation establishes a harmonised framework or ash payments across the Union, strengthening transparency andante-money laundering safeguards, while allowing Member States to impose stricter national limits. By setting a €10,000 threshold for professional transactions, introducing enhanced monitoring for payments above €3,000, and requiring robust KYC and record-keeping, the Regulation creates clear obligations for businesses. Private individuals retain the freedom to transact in cash without restriction.  

 

Legal Intern, Thea Saliba and Senior Lawyer, Dr. Lara Borg Bugeja  

 

Contact us