On Dec. 21, the European Commission tightened controls on the inflow of cash and precious metals from outside of the EU. Describing its decision as a move to crackdown on terrorist financing, the Commission granted permission to border patrols to seize cash or gold brought in by suspects.
Customs officials in EU states, as well as border controls, can seize and restrict the inflow of cash and precious metals without particular guidelines as to whom is suspected of terrorist financing or funding of militant attacks. Such ambiguity in the new proposals could potentially lead to the false confiscation of funds carried in by civilians coming into the EU.
Individuals holding over $10,400 in cash must declare at EU state customs before entering a member state. If they fail to do so, individuals could be scrutinized by the newly proposed regulations. The EU executive Commission also stated in a note obtained by Reuters that authorities will be able to seize money below $10,400 upon their independent investigations and considerations.
Potential regulations on other money transmission methods
To date, cash and precious metals are the only two stores of value that the European Commission plans on regulating. The inflow of cash and gold will be closely investigated, which could cause great discomfort for people moving into EU for casual purposes such as leisure or business.
However, the Commission hinted that other forms of money transmission are under consideration and more forms of assets or money could be regulated and restricted by customs officials.
Julian King, the security commissioner of the EU, stated:
“There are a lot of new ways of transferring money and not all of those are covered in the EU-US scheme.”
In the past, the EU suggested tighter Bitcoin controls and regulations on exchanges with the implementation of more thorough KYC / AML policies. If this is the case, exchanges could be pressured by local authorities to present user data and financial information to the EU member states and government agencies for further verification.
On July 5, the European Commission released a document entitled “Commission strengthens transparency rules to tackle terrorism financing, tax avoidance and money laundering,” which read:
“To prevent misuse of virtual currencies for money laundering and terrorist financing purposes, the Commission proposes to bring virtual currency exchange platforms and custodian wallet providers under the scope of the Anti-Money Laundering Directive.”
To avoid such regulations and restriction on the inflow of cash, the general population will most likely search for alternative assets like Bitcoin to send money into the EU. Thus, in the short term, if the Commission goes ahead with the proposal, the demand for Bitcoin could rise in Europe.