Tightening of cash controls at EU borders: prepaid cards also affected

Increasingly stringent controls at Customs for cash entering or leaving the European Union borders equal to or exceeding EUR 10,000. Italy, too, is preparing to adopt a broader definition of cash that will also include prepaid cards with the draft legislative decree, under preliminary examination by the Council of Ministers on Wednesday 4 September, which transposes EU Regulation 2018/1672 dedicated precisely to currency controls in Customs.

Mainly with a view to preventing illicit cash transfers and thus avoiding the risk of money laundering and the financing of criminal activities, the decree redefines the perimeter of cash to which transfer limits apply outside and inside EU borders. The definition includes currency, bearer negotiable instruments, assets used as highly liquid reserves of value and prepaid cards. While currency includes banknotes and coins that are in circulation as a medium of exchange or that have been in circulation and can still be exchanged, the 'range' of bearer negotiable instruments is better specified as the 'instruments other than currency that entitle their bearers to demand payment of a sum of money upon presentation thereof, without having to prove their identity or right to dispose of it'. Such instruments, as the decree clarifies, 'are traveller's cheques (or traveller's cheques), cheques, promissory notes or payment orders issued to the bearer, signed but without the name of the payee, endorsed without restriction, in favour of a fictitious payee, or otherwise issued in such a form that the relevant security passes at the time of delivery'.

The squeeze on prepaid cards, which are thus equated with cash, concerns non-registered cards 'that contain or give access to cash or cash value or that can be used for payment transactions, for the purchase of goods or services or for the return of currency, if not linked to a current account'.

The indications of the regulation aim to tighten the controls (and their consequences) against those who do not declare money over the threshold when entering or leaving the European Union or those who do not comply with the reporting obligation for unaccompanied cash, i.e. 'cash that is in any kind of consignment or in a postal or equivalent package without a natural person carrying it, in luggage or in the means of transport'.

Among the innovations envisaged, there is also one relating to the 'withholding' of unaccompanied amounts. If, in fact, during the course of the control of postal or equivalent packages, goods shipments, unaccompanied luggage or any other type of shipment, unaccompanied money from and to the national territory is found for an amount equal to or exceeding 10,000 euro, the sender or the consignee or a respective representative is obliged to submit an information declaration to the Customs and Monopolies Agency. This declaration must be provided within a period of 30 days. In such cases, the Customs and Monopolies Agency and the Guardia di Finanza detain the unaccompanied money until the information declaration is submitted.