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Comment by Strom | Hacker News Reader

Can someone explain to me how this 10K EUR limit can be enforced? What will stop the launderer from selling an item/service valued at 1K to a thousand anonymous customers who paid with cash? Surely they're not going to demand KYC for every tiny cash transaction? If they aren't, I can't see a limit to the number of fake customers you can come up with.

Or is this just meant for cases where the business is already under 24/7 survailance and they could point to not enough people coming by?

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It prevents people with lots of dirty money from paying expensive-but-unregistered-goods (i.e. not cars and houses) with cash from law abiding citizen; if they want the expensive stuff, they'll have to either find some other dishonest businessman to sell it to them (might be hard, depending on what you're buying, and increases the risk of being caught) or deposit the money in a bank to pay for it electronically (which will raise flags since you are not officially earning that money)

I think you raise a good point. In an ideal world this would mean that only more sophisticated criminals with access to money laundering would be able to use large amounts. An unsophisticated criminal can't just buy stuff from a law abiding citizen.

Remains to be seen how this will work out in practice. My guess is that most law abiding citizens won't even know that such a law exists. Your point still stands though.

You open a bank account and start "selling an item/service valued at 1K to a thousand anonymous customers who paid with cash" and you'll come up against KYC and have your account flagged regardless.

That's what would be stopping you; existing anti-money laundering systems.

This is then how things like this are enforced.

You mean a bank will demand to know information about the customers of a business that has an account with them?

I personally already run a business and my bank has never wanted any info from me about my business's customers. Sure they know me well, but not my customers.

Are you saying this is an exception?

The bank reports your bank transactions to the tax authority, who compare them with your tax returns. If there are significant discrepancies you'll probably get asked questions about your customers.

Well in Estonia (an EU state) this certainly doesn't happen with any regularity. The tax authority has the possibility to ask for bank statements, but they are required by law to inform the account holder of this check up. It only happens for cases where you're already under a tax authority investigation.

I know though that this is the case in more government-happy states like Denmark, where the banks send this data more liberally.

Anyway even if all the data would go automatically to the tax authority, that doesn't reveal anything. The company would be paying tax properly on all of this, that's the whole idea of laundering. To get the money into the legal system.

What happens when you limit the amount that can be made in a singular cash transaction, is that you then severely limit what businesses that you can use to launder it through.

If you can pay $100k in cash for a gold bar, it only takes 20 transactions to launder $2 mill. That's not all that suspicious.

With this new limit, you've now turned that into 200 transactions needed. Now the business stands out more because they tend to use business averages/data to spot things.

It's already done without you being involved. Governments know who's transacted with you already as the banks tell them.

But that implies that you're using the bank system in the first place. What if you don't?

If you're moving that much money around at some point that money has to flow into a legally operated financial provider/service for you to use it for any good means.

You could launder $100k through the means you mentioned with Bitcoin through illegally operated exchanges for example but then what? You can't use it to buy a property that way.

> You can't use it to buy a property that way.

Do people in other parts of the world use bank transfers to buy property or what? I'm genuinely curious. Where I'm from it's often a cash transaction, unless it's a mortgage.

> Can someone explain to me how this 10K EUR limit can be enforced?

Same way the law about having the correct plate on your car is. Nobody's stopping you, but if you're caught, you go to jail and/or get a fine.

No one, but it would be against the law?

Money laundering was already against the law. The whole premise of this 10K limit is that it will somehow stop money laundering. The way I see it, at best it creates some hassle.

The hassle is quite important as 1) It limits the business models it can be done through and 2) It means the business models you can still launder it through are much more noticeable.

It's easy to launder $2 million selling gold bars. It's much harder to launder $2 million through a car wash without red flags showing.

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