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Wolfsberg Group: Proposed €10K cap on cash transactions should not be reduced by Member States

The Wolfsberg Group seeks to prevent countries from lowering the new €10,000 cap on cash transactions across Europe.

According to the group of banks, the EU AML Action Plan that the bloc is proposing, should scrape the Member States' ability to implement "lower limit" cash bans.

According to the group, the current proposals call for the €10K cash cap to be "applied consistently" throughout the EU, "without permission for Member States to apply a lower limit."

According to AML Intelligence, Germany and Austria are among the EU nations who are reportedly against the €10K cap due to privacy concerns.

Banco Santander, Credit Suisse, Deutsche Bank, and Barclays are among the thirteen international banks that make up the Group, which has issued a warning that the existing measures need to be changed to "avoid unnecessary complexity for consumers and incentives for criminals."

The Group's comment letter on the EU's AML Action Plan was published, and it makes the following recommendations that the AML framework be revised:

- Allow cash transaction data to be submitted to FIUs in an “automated fashion”

- Eliminate the aggregation requirement

In addition to enabling FIUs to "aggregate cash transactions" across reporting FIs, which would give them a more "holistic view of the depositor's activity," it would also enable FIs to "redeploy staff to more effective AML/CFT tasks," according to the Group. This elimination of the "aggregation requirement" would enable FIUs to receive information on cash transactions "much faster than today".

The Group emphasized in its most recent publication that it supports the "ambitious" EU AML Package and urged for a foundation of "risk-focused rules," which are "critical for reducing complexity and ensuring harmonised and effective AML/CFT measures across the EU."

Additionally, the Group has suggested that the regulations be centered on "outcomes rather than on activities" with "low impact on the prevention, detection, and reporting of money laundering and terrorist financing."

The Risk-Based Approach (RBA), which the association refers to as a "key pillar" of an efficient AML/CFT program, can be "enhanced" in seven areas, according to the association, by the EU AML Package.

The Group cautioned that "rules that are not aligned to the actual risk they are designed to manage can result in unintended consequences, such as overburdening legitimate customers with excessive requirements or undermining financial inclusion."

The following seven areas are where the Group believes the EU AML Package can strengthen the RBA:

- Beneficial Ownership

- Customer Due Diligence

- Outsourcing

- ‘Ongoing’ Reliance

- Cash Limits

- Technology

- Bank account registers and electronic data retrieval systems (AMLD-6)

In addition to control through ownership interest, information requirements, and beneficial ownership registers, the Group has urged for beneficial ownership reform to be in line with FATF Recommendations and motivated by a "thorough understanding of risk."

According to the EU's AML proposals, obliged businesses must update client data at least once every five years.

The Wolfsberg Group has cautioned that imposing a "minimum frequency" for all clients, regardless of risk, is "not only inconsistent with a RBA, but also stifles innovation, results in low-impact AML/CFT activity and creates unnecessary friction for customers."


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