The commission will work with Europol, the EU’s police agency, on the problem but while the commission can consider options for curtailing the use of €500 notes by terrorists and other criminals, it is the European Central Bank that has exclusive control over the denominations of euro notes and coins in circulation.
According to one person briefed on the ECB’s thinking, the problems around misuse of the €500 bank note have been under consideration for some time and technical work is under way more generally to look at high-denomination bills. The last review was in 2005, when the ECB’s governing council decided to keep large-value bills in circulation.
Mario Draghi, European Central Bank president, told the European Parliament on Monday that the matter was being studied by the central bank and that no decisions had been taken yet. “We want to make changes,” he said, adding that “we are determined not to make seigniorage a comfort for criminals.”
According to a study published by Europol last year, shops often refuse to accept €500 bills but nevertheless they account for one-third of the value of all euro banknotes in circulation. ECB data suggest the number of €500 notes has grown disproportionately compared with most other denominations since single currency notes and coins entered circulation in 2002.
The distinctive purple note is one of the highest-value pieces of currency in the world, equivalent to around £380 or $540. It was intended to replicate some of the large denomination notes available in currencies that predated the euro, such as the old 1,000 Deutschmark bill in Germany, and similar bills in Austria, Belgium, Italy, Luxembourg and Netherlands.
Other plans include requiring all EU nations to have centralised registers of bank accounts and giving customs officials greater powers to seize historical artefacts if it is suspected they are being sold to finance terrorism.
The commission also plans to accelerate work on a blacklist of non-EU countries with “strategic deficiencies in the area of anti-money-laundering or countering terrorist financing.” It will come forward with the list by June.
Culled from: Financial Times