- The Federal government to lower the upper limit for anonymous gold purchases drastically, to enter into force on January 10, 2020
The German government now wants to significantly restrict the anonymous purchase of gold, just like it did with cash. Officially, it is to fight money laundering but critics fear a hidden attack on the freedom of citizens.
The Federal Government wants to drastically lower the upper limit for anonymous gold purchases. From next year onwards, precious metal traders should have the personal details of the buyer and carry out a risk analysis for an amount over € 2,000.
This new limit emerges from a draft bill for the Ministry of Finance, that still needs to be discussed in the Bundestag.
Due to Enter into Force on January 10, 2020
Currently, anonymous gold purchases in Germany are capped at 10,000 euros. With a simple 50-gram bar costing over 2000 euros, a purchase after the new measures won’t be possible without the disclosure of personal information.
The buyer has to provide proof of identity and in the case of a company acting as a buyer, the trader needs to clarify beforehand, who is the “beneficial owner.” Criminal background also needs to be checked with the business partners and business relationships are examined in case the companies or individuals are from “high-risk countries” and
“politically exposed persons.”
If a dealer suspects, he must report the potential customers to the authorities. In failure to comply with the obligations, the trader will face severe fines.
The bill is due to enter into force on January 10, 2020, and implement applicable EU directives on money laundering.
The Directive (EU) includes various measures also concerns the draft bill for the German Ministry of Finance in addition to the gold market areas such as gambling, the art market, real estate, and the crypto industry.
Restricting the Use of Cash
This is not the first measure intended to restrict the use of cash. Two years ago, the general cash limit was lowered from 15,000 euros to 10,000 euros, citing the same reasons that are now being sought.
At that time, critics of the measures expressed the suspicion that the legislature indeed to control all the cash flows, ultimately making it easier for the authorities to enforce monetary and interest rate decisions.
If another EU country, France, rules are much stricter than Germany, where cash payments between traders or companies are subject to a general limit of EUR 1000 and not just for the purchase of precious metals. In Spain, it is 2500 while Italy forbids amounts above 3000 euros.
In light of this scenario, holding bitcoin becomes even more attractive.