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According to Kathimerini's Pavlos Neophytou, the Cyprus government is considering a new law to cap cash transactions at €10,000 for buying goods and services, aiming to crack down on money laundering. Officials say this change is essential to keep up with new EU anti-money laundering rules and ensure large sums aren’t changing hands unnoticed.
Cyprus’s Financial Intelligence Unit (FICU) supports the law, citing a lack of results with the current rules. FICU’s Maria Kyrmizis-Antoniou told lawmakers on Monday that the agency hasn’t received a single report in three years from businesses like car dealerships, jewelers, art dealers, or fur sellers—places where large cash transactions are more common. This silence suggests that cash transactions over €10,000 may be slipping through the cracks, making it harder to catch money laundering.
Tax Commissioner Sotiris Markides...suggests Cyprus go further over time...reducing the limit to around €1,000 to €2,000 within five years, to make it even harder to use cash for illegal purposes.
Why Officials Want Even Stricter Limits
Tax Commissioner Sotiris Markides backs the €10,000 cap but suggests Cyprus go further over time. He proposed reducing the limit to around €1,000 to €2,000 within five years, to make it even harder to use cash for illegal purposes. Markides also argued for tougher penalties, including possible jail time, for those who ignore the limit, noting that the current 10% fine is not much of a deterrent.
Support and Concerns from Officials and Lawmakers
The proposed limit has drawn broad support from institutions like the Central Bank, Customs Department, and financial oversight bodies, who agree it’s time for stricter rules on cash transactions. They want to ensure that Cyprus’s laws align with the European Union’s anti-money laundering standards, which will be mandatory across Europe by 2027.
However, some lawmakers worry about potential drawbacks. DIKO MP Zacharias Koulias suggested that the agricultural sector, where cash is often used, might need an exemption from the cap. He also noted that this new law could push more business to banks, potentially benefiting them with higher transaction fees for electronic payments. Koulias called for input from everyday citizens and unions before moving forward.
Focus on High-Risk Sectors
Independent councilor Alexandra Attalidou highlighted other areas that might need attention, like real estate, luxury goods, and art, where large sums of cash can also change hands. She suggested including safeguards that would address these specific sectors and ensure Cyprus’s rules won’t need major adjustments when the EU’s new laws take effect in 2027.
What This Law Could Mean for Cyprus
If passed, the new law could bring several benefits. The cash cap would help authorities keep track of large transactions, making it harder for individuals to use cash for money laundering or tax evasion. It could also strengthen Cyprus’s reputation as a country serious about financial oversight and aligning with EU standards.
However, there are potential drawbacks. Small businesses and those in cash-heavy industries could feel a pinch, particularly if banks charge high fees for electronic transactions. A lower cash limit might also be challenging for people used to handling cash in their everyday business.
The proposal, which has strong support among state agencies, is expected to be brought up for a full vote in the coming weeks. Lawmakers say it could be a significant step for Cyprus as it tries to balance business needs with a strong anti-money laundering stance.
