Germany’s Social Democrats have proposed an upper limit on cash transactions | Hacker News Reader

Germany’s Social Democrats have proposed an upper limit on cash transactions

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HN headline: Germany to make cash payments of more than 5,000 Euro illegal

Article: ... Germany’s Social Democrats have proposed an upper limit on cash transactions and the abolition of the €500 note. It could prove a tough sell in a country that still loves paying with paper money.

Edit: headline updated by dang, thanks.

Yes, that's ridiculous. (The submitted title was "Germany to make cash payments of more than 5,000 Euro illegal". We replaced it with the relevant part of the subtitle.)

Submitters: here is the relevant HN guideline:

Please use the original title, unless it is misleading or linkbait.

Note how replacing a title to make it more misleading and linkbait is the exact the opposite of that.

https://news.ycombinator.com/newsguidelines.html

this is really good to know. I love checking HN comments first before clicking because often top comments point out clickbait and sometimes even provide a little tl;dr ... This is awesome and just saves me so much time. One of the main reasons I love this site and community

Glad you feel that way.

The bit about replacing original titles to make them less linkbaity has been surprisingly slow to feed into the community consciousness. But not rewriting them to make them more so, at least, should be a no-brainer.

Oups, sorry. I copied it from Reddit without re-checking.

No prob. That's pretty funny.

Beside the fact this is low, I wonder if they worked in inflation for this. When US customs introduced the 10,000 limit way back when ten thousand was a lot more than if is now, so basically these static limits decrease automatically every year in real terms.

In a few cases these numbers are tied to inflation, but many aren't.

Perhaps a prerequisite to banning cash altogether which is necessary to introduce negative interest rates. A total cash ban has been proposed in Norway by Norway's biggest bank, DNB http://www.vg.no/nyheter/innenriks/oekonomisk-kriminalitet/d...

That was my thought as well.

High denomination notes used in the underground economy essentially represent a zero interest loan to the currency issuer. The United States actually considered reissuing the $1000 bill since the $100 greenbacks were losing criminal market share to the Euro.

Any major money laundering is done via asset purchases, primarily using banks in the City, the Caribbean, and (for the VIP Platinum Club Elite oligarchs) Luxembourg.

So money laundering is an excuse to ban high denomination cash transactions. The question is why.

Not an expert in the subject but not accepting cash gives banks and credit card oligopolies almost all the keys to financial transactions.

Also interesting, how cryptocurrencies play with these rules. If they are accepted they should force the POS providers to be open to new ways of payment instead of using them as a barriers of entry.

Not to mention severely limiting freedom of the individual.

Look at the Eich's ousting - donate to the wrong party, support an "objectionable" point of view, and you stand to lose everything. Maybe CEO's should expect this sort of scrutiny. Maybe it's even justified. However, removing one of the few means of privately utilizing wealth left in the world (Bitcoin isn't there yet, and might never be) means that private individuals can expect that same sort of public scrutiny over all their actions.

Reading this sounds like strident distopian conspiracy ravings, but I honestly do believe there is a push by governments and large corporations (Google, BoA, etc) to have total information awareness about the day to day dealings of everyone, be it for "security" or data mining or what have you. I believe that push is fundamentally opposed to the spirit of liberalism that let us develop advanced democracies. Quite frankly, I think the possibility of a bit (or more than a bit) of money laundering is an easy price to pay in exchange for personal privacy.

Credit cards in Germany, that's a good joke :)

SEPA wire transfers are free and direct debit is fairly cheap. If I buy or sell something that costs more than 5000€ I'll want some kind of record anyway.

Hunh. Title is a bit misleading, but anyways.

Does Germany not have populations religiously opposed to banks or electronic currency, similar to the amish?

When I was younger, I would sometimes help out at the family lumber yard. Local amish folks would occasionally come in and purchase enough lumber to build one or more barns and/or houses, all in one go. This could easily be thousands to tens of thousands of dollars in lumber, all paid in mixed bills (and sometimes rolled coins) or varying sizes. They never tried to cheat us, but we had to spend they day sitting around counting the money anyways out of principle.

I am not aware of any active Amish communities in Germany or Europe. http://amishamerica.com/do-amish-live-in-europe/

There seems to be some small congregations but nothing like the Amish living in America.

The reason there are so many Amish in the US is that they emigrated from Europe.

I think there are more Mennonites in Germany than Amish (not sure what the two groups think of each other) but even they are a tiny minority.

The two biggest politically organized religious groups in Germany are the Catholic church and the Evangelical church (which is a union of various Protestant churches, mostly Lutheran). Then there's Greek and Russian Orthodox Christians who exist but barely ever make the news. There's also the Jewish Council but Jews in Germany are a minority (for obvious historical reasons) -- though they do get a significant amount of attention (again, for obvious historical reasons).

There is no Muslim church because there are too many different groups (and despite what some people will tell you about Europe, not enough of them in any one group or coalition of compatible groups).

There are various other sects of Christianity and other religions but most of them are tiny and not taken particularly seriously. Most Christians I've met think of groups like the Jehovah's Witnesses, LDS or Mennonites as eccentric but non-threatening cults. Then again, I haven't yet anyone in Germany who considers Scientology a religion by any standard (which it seems to be recognized as in the US).

Germans as a whole tend to be opposed to electronic currency, though. Credit cards are practically useless in everyday life (except for hotels and expensive restaurants). Most places take debit cards instead but it's generally a better idea to ask because many places only take cash.

Additionally €2 and €1 are coins not paper and most vending or ticket machines only take coins, so Germans are used to carrying around coins (and having a €1 coin handy because you need them for shopping carts). American style cards+clip wallets are basically unusable for most Germans.

However things seem to be changing thanks to e-commerce (Amazon and eBay pretty much started it) and most people are extremely uncomfortable carrying around large (i.e. €500 and up) sums of money in cash.

Besides, "exporting" large amounts of cash (€5000 and up, I think) out of the country without notifying the authorities in advance is illegal even across EU borders and Europe is considerably smaller than the US and has more national borders (obviously).

OTOH we don't use checks. Like, at all. And using debit cards means electronic charging with chip and pin, not any of this "make an imprint of the front on paper" nonsense.

Because such a ban would obviously prevent illegal transactions from taking place; people might be committing other crimes, but they would never think of breaking this one.

So your point is, what? Because something is imperfect that the status quo where nothing is done is inherently superior?

Plus a lot of people involved in money laundering have no idea they're involved in anything illegal: auctioneers, realtors, sometimes accountants, sometimes lawyers, etc. Or if they do know it is shady they can play ignorant.

Laws like this make it harder to involve law abiding parties in illegal activity.

PS - I actually feel like 5K is too low, 10K seems like a more reasonable lower limit.

The point is that money laundering is already illegal, everyone who's doing it is already breaking the law. The only purpose this serves is to create a new law that is easier to prove violation of. A law that makes it easier to indict criminals at the expense of making legitimate acts illegal is fundamentally at odds with the physical underpinnings that give us the "innocent until proven guilty" doctrine.

> The point is that money laundering is already illegal, everyone who's doing it is already breaking the law.

No.

Knowingly laundering money is illegal, being used to launder money unknowingly is not.

For example if a money launderer buys your property with cash (car, house, painting) and then goes ahead and resells that property later to clean money, by your logic the seller would also be laundering, which is obviously absurd.

With this law the seller has the responsibility not to accept cash over a certain amount, which makes the launderer's life more difficult.

Most people who take part in money laundering do so unknowingly. The law provides a better paper trail to detect laundering.

> A law that makes it easier to indict criminals at the expense of making legitimate acts illegal is fundamentally at odds with the physical underpinnings that give us the "innocent until proven guilty" doctrine.

That's circular logic. You claim something is a "legitimate act" but all illegal things were at one time legitimate acts: drinking & driving, guns on aircraft, drug usage, all computing crime, all financial crime, etc.

You can use that exact sentence and the logic held within to argue that all new laws of any nature violate "innocent until proven guilty" because inherently before the law was passed these were "legitimate acts."

I can't speak about the transaction aspect, but the banning of the €500 note is an old idea. Most regular folks do not use that note period. So much so that occasionally you hear the nickname "binladens" for the €500 note.

Is it the kind of note that if you used it in a shop, they'd think it was counterfeit?

Given its nickname, I think they wouldn't guess it counterfeit as much as dirty like money from drugs, etc

Oh, yeah, it could also be counterfeit. I shouldn't have edited that out of my comment.

It just gives police another reason to arrest / detail people who they suspect of wrongdoing - you got more than 5k in cash? You better be able to account for the multiple transactions you're going to be performing.

FTFA:

> Germany has been one of the Mafia’s favorite places to invest its money

Banning large transactions in cash obviously isn't going to stop the guy buying 100k in drugs and guns, but it will make it extremely difficult for the seller to legitimize that 100k.

Imagine trying to sell a used car or other high asset items like fully loaded computers and Swiss watches. Who is going to take a check?

[edit]

“Limits on cash transactions would discourage foreign criminals from coming here to launder money,” says the Social Democrats’ paper. If sums over €5,000 have to pass through traceable bank transactions, laundering would be severely hampered, it adds.

Other European states have already imposed such restrictions. In 2011, Bulgaria was the first country to set a limit, restricting cash deals to €2,500. Italy followed suit a year later, with a radical limit of €1,000, although this was later relaxed to €3,000. Portugal is considering similar measures..."

bank transfer?

I would not want to do it that way but maybe most people would.

Bank transfer or certified checks. This is quite common in France when selling expensive goods.

I haven't seen a cheque in almost twenty years... Do people still use them?

The answer is bank transfers. I can send someone money within minutes from my phone and it will arrive within a couple of hours.

I myself wouldn't want to walk around the streets with 5K+ in cash anyway, just asking to get ropped.

So you're selling your car, the buyer initiates the bank transfer, and the two of you hang around in a coffee shop for a few hours waiting for it to clear?

Or do you actually let them drive off with the car before the transaction clears?

In the UK, bank transfers take seconds, thanks to the Faster Payments System. I assume other places in Europe have similar.

I said up to a couple of hours, not a "few."

And the point is irrelevant as here you now need valid insurance and road tax to drive off into the sunset which itself can take a couple of hours.

So private or commercial sale is often a "pick up the next day" kind of affair.

My apologies, at least where I live "a couple" is basically the same as "a few", 2-3.

I bought my last car (£6,000) with a debit card. I guess, once it was approved by my bank that was it. I gave them my address details so that they could update the DVLA (Government agency that deals with cars) so that I became the registered owner of the vehicle.

I think that was it.

France is crazy about their cheques. You can't really function there without a chequebook. Haven't seen them in other EU countries. (not sure about Belgium, ... Belgians are essentially French with better beer ... so who knows maybe they do use them ...)

We also have a similar limit in France, 5000€ too I believe.

> Imagine trying to sell a used car or other high asset items like fully loaded computers and Swiss watches. Who is going to take a check?

Happens a lot for houses, cars, ... Usually:

- Bank transfer

- A regular check and wait of the clearance time period before getting the good

- A "chèque de banque", translated to "bank check" I guess, aka a check that is in the name of your bank rather than yours. The banks delivers those in limited amount and/or for a fee, and since the bank issuing that check is the one who owns the customer's account, they don't have a problem checking for the funds.

Eg: you A want to use an account from you bank B to buy a car from C, instead of making a check marked "A pays C", you go to your bank, ask them a bank check, they take the money from your account and give you a check "B pays C".

Having recently bought a slightly expensive car, that was the rule: either give us a check and wait 3 weeks, or give us a bank check and leave with the car immediately.

The US pronounces "chèque de banque" as "certified check", for anyone curious.

"a check that is in the name of your bank rather than yours" sounds like a cashier's check, not a certified check:

http://www.bankrate.com/finance/savings/you-can-t-always-tru...

Checks are hardly ever used in Europe for the past 10-15 years, and can be expensive to cash.

Nobody in Germany uses checks. The concept seems ridiculous to me, tbh.

Germans use bank transfers for everything. You're expected to have a bank account and to wire money to other bank accounts. For everything from rent to taxes to car sales.

I have bought used cars with cash but I doubt the kind of place selling used cars for €5000 and up would accept cash in Germany to begin with. That seems incredibly dodgy and gives off a money laundering vibe.

In other words: high asset items in Germany are already mostly paid by bank transfer (or debit/credit card). Banning cash for those transactions will barely affect anyone.

"Citizen, what is in that briefcase?"

"€5,000, officer. I am purchasing a used car today for €4,900. Then I am taking my wife out to dinner."

"Carry on, then."

nein. nein. nein.

"Zivilist, was ist in Ihrer Aktentasche?"

"€5000 mein Herr. Ich kaufe einen Gebrauchtwagen für €4900. Dann gehe ich mit meiner Frau essen."

"In Ordnung. Weiter gehen."

also you should know that in Germany the Frau pays half of the bill for dinner

Maybe it's a very expensive dinner.

anonymous crypto currences (zerocash) could maybe fill that void (I strongly hope ... otherwise our privacy is going to be totally buggered). The real reason is probably not money laundering but the German Finanzamt (IRS) who wants to closer monitor what you do. They already have access to your bank account and can check any time without your knowledge.

It was 1000 Euro in Italy, recently raised to 3000 (to be pedantic, it's 2999.99)

It's behind a paywall, I can't read it without registering.

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