Draconian Cash Controls Are Coming To France

testosteronepit's picture


Wolf Richter   www.testosteronepit.com   www.amazon.com/author/wolfrichter

French Prime Minister Jean-Marc Ayrault himself presided over Monday’s meeting of the National Anti-Fraud Committee—“a first for a head of government,” he said at the press conference afterward, to hammer home just how important this was. But he wasn’t worried about run-of-the-mill fraud that might fleece some old lady of her life savings. He was worried about people not paying their taxes.

He is desperate. In its just released annual report, France’s state auditor, the Cour des Comptes, told the government that it was dreaming. Its forecast of 0.8% growth for 2013 was way high. Try 0.3%. And forget about the budget deficit target of 3% of GDP, which had been based on that illusory 0.8% growth. And even if growth came in at 0.8%, the deficit would still be above that all-important 3%.

To get to the deficit target, the government had raised a slew of taxes to extract another €32 billion this year from households and businesses that are already gasping for air. Now “absolute priority” must be on bringing down spending, admonished Didier Migaud, First President of the Cour des Comptes, when he presented the report.

But spending cuts—whether corporate welfare projects or social programs—would be highly unpopular. Hence, the government’s emphasis on fighting tax fraud. Some estimates put tax fraud in the range of €60 to €80 billion per year, others at half that. Either way, a free gift. If the government could just get its hands on that money.

So Ayrault trotted out his national plan, a 20-page document that outlined his all-out effort to go after any kind of behavior that could possibly deprive the government of those sorely needed euros. A seamless fit for France’s principle: squeeze hapless “fiscal residents” like lemons to get their last drop of juice—fiscal residents, because citizens or foreigners who live in France only part of the year and pay taxes in some other country escape income taxes in France.

Stuffed into that 20-page national plan is a draconian tool: prohibiting cash payments of over €1,000 per purchase. The current threshold is €3,000. It’s urgent. He wants to get the process started soon so that “a decree and legislative measures” can be finished by the end of 2013.

Two crisp 500-euro bills and a single coin: voilà, an illegal transaction. OK, most cash transactions fall below that limit. But used cars, for example, might not. Between individuals, a cash transaction protects the seller. Otherwise, a trustworthy girl buys your car, signs the documents, hands you a check or initiates an electronic payment, and drives off. By the time you realize that the check bounced or that the electronic transfer didn’t go through, the car is on its way to Russia.

But the limit would only apply to fiscal residents. In a nod toward the wealthy and not so wealthy that the government has driven into fiscal exile, Ayrault included an exception: people, citizens or not, who are fiscal residents of a country other than France would be able to pay €10,000 in cash per purchase, down from the current €15,000 limit.

It will doubtlessly be called the “Depardieu exception.” Iconic actor Gérard Depardieu sought to establish a residence across the border in Belgium to escape the oppressive taxes at home [“Trench Warfare” Or “Civil War” Over Confiscatory Taxes In France]. Then suddenly, he obtained a Russian passport, a “defection” that caused a whirlwind of anger, derision, support, and laughs. But Russia does have a flat 13% income tax.

People like him, when they’re in France, will still be able to pay for high-end girls in cash. The rest must use another payment method, anything from smartphones to checks. But they leave indelible electronic skid marks. Companies that process the payments retain personal and transaction details that form a seamless record over time. And copies of these details are handed to the government, either upon request or automatically.

With this law, the French government will be able to tighten the vise on its people one more turn, restricting their freedom of choice (how to pay), wiping out any privacy in those transactions, and imposing another layer of government control. Once people have gotten used to the €1,000 limit—based on the great principle of incrementalism with which restrictions of freedom come to pass in democracies—the vise will be tightened further, until the government can document every purchase made by “fiscal residents.”

And here is the principle of Regulatory Capture: “Former employees of the SEC routinely help corporations influence SEC rulemaking, counter the agency’s investigations, soften the blow of SEC enforcement actions, and win exemptions from federal law.” A damning report on how Wall Street insiders rotate in and out of the SEC—until Wall Street culture and personalities dominate the agency. Regulation and enforcement become a joke. Read....  Wall Street Takes Over Its Regulator.

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Thu, 02/14/2013 - 10:18 | 3242836 Bankrupt from B...
Bankrupt from Belgium's picture

A couple of comments - the UK goverment looked at limiting cash transactions during the course of last year - it was shouted down for many reasons.  (NOTE - to reduce criminal activity revolving around cash rather than electronic transfers, the UK's largest note is the £50 (about 58 euros).  In the EZ, it is 500 euros.  Guess for which currency it is easier to carry large sums in a brief case)


Regarding French people leaving France for tax reasons and moving to Belgium - it is not that Belgium has low tax rates (I live here and should know), it's rather that they can then have access to the favourable rates of Monaco when resident outside of France. 

Thu, 02/14/2013 - 07:49 | 3242553 lakecity55
lakecity55's picture

Joe: Hey, boss, let's do that here. Nobody needs anymore than enough for a six-pack.

Skeeter: Or a pack of zig-zags. Head over to Congress, Joe. Hey, see if my "Che" and "Hugo" t-shirts are out of the dryer yet.

Thu, 02/14/2013 - 07:47 | 3242551 smacker
smacker's picture

Yeahbut...think of the additional State headcount (mainly police and law enforcement crowd) that'll be required to track down the bogus car buyers who can now legitimately decline to pay in cash.

Then there's another army of State apparatchiks required to trawl through all those non-cash payment transactions to find out *who* is spending money above their means, according to their tax returns.

All this will increase the size of The Almighty State in France.

For them, it looks like a win-win-win. No wonder implementation is urgent.

Thu, 02/14/2013 - 01:39 | 3242300 dunce
dunce's picture

The tax fraud did not start last year, that 60 billion euros was every year so the effect will be the same as a tax increase. There is a question of just who would be hit, would it be the very wealthy or evenly distributed. It may be that millions of regular taxpayers cheat 30 euros a year and it would be impossible to go after that many people. The rich always find a way around any scheme the govt. can fashion. It may be that if they could succeed that it would crush they economy by taking that much money out of productive use. In the minds of tax collectors the rich have treasure chests  when in fact the rich have their money working every day. Maybe Apple and Microsoft have stacks of idle cash just sitting around but i doubt it.

Thu, 02/14/2013 - 00:59 | 3242234 Northern Lights
Northern Lights's picture

Wow, reminds me 4 years back when I sold my old 1990 5.0 Mustang.  Prior to selling my car, I read the stories about scammers (buyer) using dummy checks or fraudulent bank drafts/money orders to pay for used cars and then the seller would go to his/her bank to cash the check and 2 days later the funds would bounce because the check was a bad.  So when I sold the car, I demanded from each prospective buyer that payment was to be made in cash in $100 denominations.  Ended up selling the car for $6,500 cash.  Had this transaction occured in France, it would have broken the law not once but TWICE!!!!  Unbelievable, I had no idea France had restrictions on how much of a legal purchase can be made using cash.  The gaul of Government to tell YOU, how you should spend your own hard earned fiat is outrageous.  May France fold like a cheap french suit!

Thu, 02/14/2013 - 00:42 | 3242193 mt paul
mt paul's picture

mountain skier 

will delivery 20 kilo package

to swiss..overnight avaliable 

cost plus 1%

Thu, 02/14/2013 - 00:29 | 3242161 Notarocketscientist
Notarocketscientist's picture

Pay for 'high end girls in cash'

Obsession with prosititues wolf?

Thu, 02/14/2013 - 00:29 | 3242159 mt paul
mt paul's picture

limit down

not even an oz of gold..

Wed, 02/13/2013 - 22:25 | 3241867 billsykes
billsykes's picture

One thing I will give Europe is that tax avoidance is a well honed tradition. Even a full on cashless society would still get by not paying taxes. 

Wed, 02/13/2013 - 22:10 | 3241815 My Days Are Get...
My Days Are Getting Fewer's picture

This will be circumvented with a barter system.

Take a close look at Brazil - they have currency controls.  Nevertheless, the "Parallel" rate of exchange for the black market import and export of funds is published in the daily newspaper. 

Wed, 02/13/2013 - 22:19 | 3241848 Half_A_Billion_...
Half_A_Billion_Hollow_Points's picture



"Draconian cash controls are coming to France"... "bitcoin users not affected."

"Hyperinflation about to strike Venezuela and Argentina"... "bitcoin users not affected."

"Americans unable to open bank accounts overseas"... "bitcoin users not affected."

"Abe dismisses hyperinflation fears in Japan"... "bitcoin users not affected."

"Bank holiday in Nation X"... "bitcoin users not affected."

"Reckless Central Bankers experimenting with money printing + ZIRP NIRP"... "bitcoin users not affected."

"A matter of time until one of Europe's TBTF banks fails"... "bitcoin users not affected."




Thu, 02/14/2013 - 01:07 | 3242249 All Out Of Bubblegum
All Out Of Bubblegum's picture

Untrue. I'm affected. My bitcoins keep going up in value.

Wed, 02/13/2013 - 21:53 | 3241770 the edge of chaos
the edge of chaos's picture

My Banker told me this week that ANY check I write for over $5000 is reported to the IRS!

Thu, 02/14/2013 - 00:51 | 3242218 Antifaschistische
Antifaschistische's picture

This is not new...do not accept a single check over $5,000.  If someone must pay you with a check...then ask for multiple checks to keep single deposits under $5k...and if you have too many -- deposit them in separate bank accounts if you have them...on different days.   

Thu, 02/14/2013 - 03:21 | 3242398 Telemakhos
Telemakhos's picture

The practice of breaking a large transaction into smaller units to avoid reporting thresholds such as CTRs is called "Smurfing" and is more easily detected than you suspect.

Thu, 02/14/2013 - 00:49 | 3242212 mt paul
mt paul's picture

sign at the  local Oxford assay shop


any transaction greater than 4000.$

will be reported to the IRS..

Wed, 02/13/2013 - 20:28 | 3241587 orangegeek
orangegeek's picture

France is getting closer to financial collapse.


Now all they have to do is borrow the script from Spain/Greece/Ireland/Portugal/Italy.

Wed, 02/13/2013 - 18:44 | 3241396 stika
stika's picture

Helloooooo, in Italy is already 1000 euro and some idiots want to lower it further down to 300

Thu, 02/14/2013 - 07:53 | 3242561 lakecity55
lakecity55's picture

Hey, with all the taxes and cuts, nobody will have enough cash to void the limit anyway.

Wed, 02/13/2013 - 18:33 | 3241363 enoch_root
enoch_root's picture

These moves should not be underestimated as marking a mile-stone in the descent of France into economic mayhem.

After Greece did the same thing their economy went into a major tailspin.


I don't think the economists, politcians, etc realise how much the total economy is supported by cash transactions. By definition, they have no idea how big the cash economy is and how much it supports the 'measured' economy.


If you limit cash transactions you are kicking out a major support of the economy, particularly for little-medium people who operate paycheck-to-paycheck and do small cash trading on the side. Considering that 80-90% of economic activity is by little-medium people France will be signing the death warrant for its economy to bring in cash controls against these people who will have to scale back economic activity to abide by the rules. It is insanity to limit economic activity in any form, doing it at this time in this way is cruel and stupid.

Just look at what happened when Greece did this.

Just as Spain did.

Just as Italy did.


Limiting cash transactions is a now proven way to kill your economy .... France is fucked now ... get out of there while you can.

Wed, 02/13/2013 - 17:18 | 3241164 Rustysilver
Rustysilver's picture

They said nothing about gold or silver. Or is this implied.  Since PM are a historic relic, no one is using it.

Wed, 02/13/2013 - 16:50 | 3241097 Jack Sheet
Jack Sheet's picture

No problem as long as the rate for a Pigalle hooker is under the cash transaction limit - after that she stashes a Visa terminal in her G string,

Wed, 02/13/2013 - 16:20 | 3241006 Satan
Satan's picture

You may make as many 999 euro cash transactions as you please. The law is meaningless.

Wed, 02/13/2013 - 18:35 | 3241377 SokPOTUS
SokPOTUS's picture

A la Carte Hookers; lol...!

Wed, 02/13/2013 - 16:10 | 3240983 John Law Lives
John Law Lives's picture

"Two crisp 500-euro bills and a single coin: voilà, an illegal transaction. OK, most cash transactions fall below that limit. But used cars, for example, might not."

That is for starters.  Once such a protocol is established (if it is), the next step might be to lower the amount again (and again).

French FUBAR.

Wed, 02/13/2013 - 18:59 | 3241435 LMAO
LMAO's picture

Apropos " Two crisp 500-Euro bills....."

Biggest problem is trying to find someone who is willing to accept € 500 bills.


Wed, 02/13/2013 - 16:29 | 3241032 Stuntgirl
Stuntgirl's picture

The protocol IS already established, at least in Greece, Spain and France. We are already at the lowering the amount stage.

Of course, that only means that tons of lump payments are just getting fractioned.

Wed, 02/13/2013 - 16:51 | 3241102 tango
tango's picture

The US has a "reporting level" at which one must "prove" that your own money was not provided by terrorists, counterfeiters or "other illegal means".  Cash payment flags are built into many systems - real estate, airlines, automobiles, etc  

Wed, 02/13/2013 - 21:23 | 3241676 Stuntgirl
Stuntgirl's picture

Same thing in Europe.

And not just for cash payments.

When moving banks recently, I was required to show proof of how I had originally obtained an amount which had been in the banking/financial system since 1987 (I was 7 years old). That was fun.

Then again, I use cash for anything and everything I can. For me, at least, the line between real economy and black market is rapidly dissolving, partially because of the treatment i described above.

Wed, 02/13/2013 - 16:28 | 3241024 rwe2late
rwe2late's picture

Excellent article on this topic:

The Cashless Society is Almost Here – And With Some Very Sinister Implications



Wed, 02/13/2013 - 16:04 | 3240963 frenchie
frenchie's picture

after Greece, Spain, ... self immolation of jobless goyim arrives to Fwance


Wed, 02/13/2013 - 15:35 | 3240867 gaoptimize
gaoptimize's picture


It is comming to France.  Electronically maybe, but the same effect.

Wed, 02/13/2013 - 15:33 | 3240859 NoWayJose
NoWayJose's picture

Cutting Tax Fraud sounds just like Obama's attack on the loopholes and other deductions that have been hard won over the years by the lobbyists.

Wed, 02/13/2013 - 15:11 | 3240795 shovelhead
shovelhead's picture

France needs another burka ban to get those Pugeots burning and create some economy boosting Krugmanitis.*


*Destructive destruction, not to be confused with creative destruction.

Wed, 02/13/2013 - 15:06 | 3240777 hazek
hazek's picture

Lucky for the French they can just use Bitcoin and not give a shit :D

Wed, 02/13/2013 - 15:40 | 3240881 Cap Matifou
Cap Matifou's picture

Until the protocol serving the client is blocked centrally. Or interwebs shut down for good measure, to prevent terrorism come out of the wire.

Wed, 02/13/2013 - 22:36 | 3241891 Half_A_Billion_...
Half_A_Billion_Hollow_Points's picture

Do you even realize what you're saying?  


They can't block the bitcoin protocol without taking down TCP-IP.  


If TCP-IP is brought down, there is no banking, no supply chains, no coordination of work, it would bring down the economy in days, and the muppets, having no access to Facebook's prolefeed, will be up in arms.  


Everything has migrated to the internet; government can't go back without facing years of readjustment.  Given that they have ZERO courage to solve the deficits, do you actually think they'll have the courage to stop TCP-IP and face an immediate break-up of the supply chain?

Wed, 02/13/2013 - 14:57 | 3240750 epi_tis_thalassis
epi_tis_thalassis's picture

A new final solution is implemented in Europe. Test-drived here in Greece, then replicated all over this blood thirsty continent.

"Crush them all middle class units daring to think of themselves as citizens!"

Wed, 02/13/2013 - 15:00 | 3240756 epi_tis_thalassis
epi_tis_thalassis's picture

Besteuerung macht frei.

Wed, 02/13/2013 - 17:16 | 3241160 Vuke
Vuke's picture

Besteuerung zwingt die Menschen aus ihrer Heimat, während Erhöhung der unwürdigen darin

Wed, 02/13/2013 - 22:04 | 3241802 My Days Are Get...
My Days Are Getting Fewer's picture

Ich kann fließend Deutsch, aber kann Ihre Wörter überhaupt nicht begreifen.


Einfach gesagt:  ??

Thu, 02/14/2013 - 04:35 | 3242447 Terp
Terp's picture

Auf deutsch: zu viele arbeitsscheue Kanaken


OT: The last years have made it abundately clear that no matter how much money (our) governments extort from the cattle, it will NEVER be enough. Tax revenue has risen to all-time-highs with the gov still running a deficit. All this austerity/balanced budget talk is bullshit, they HAVE to run a deficit to keep the game going.

Wed, 02/13/2013 - 14:52 | 3240738 ebworthen
ebworthen's picture

Coming soon to the U.S.S.A.

Wed, 02/13/2013 - 18:07 | 3241319 smiler03
smiler03's picture

It's already there, $10000+ cash needs to be reported to the IRS.

Wed, 02/13/2013 - 19:38 | 3241507 willwork4food
willwork4food's picture

Unless you are a business owner. Then all cash transactions over $600 needs to be reported on your Tax IRS data sheet.

Wed, 02/13/2013 - 14:40 | 3240717 TheClub55
TheClub55's picture

These rules will typically have the oppisite effect, the black market will grow, altertative to paper will rise, folks will swap services, etc.  Big G never learns lessions from the past, these efforts will fail and grow the alternative markets.

Wed, 02/13/2013 - 22:14 | 3241830 TNTARG
TNTARG's picture

These are not "efforts". These are ways to f.ck people.

Wed, 02/13/2013 - 14:16 | 3240649 NEOSERF
NEOSERF's picture

Well written...these little items used to escape the publics prying eye unless a bored newpaperman was sitting in the meeting.  Important to get these out and get them viral...beyond that, this New Normal is incremental decay as another article said...you could be making X money, buy X things and put away 10% of your salary today.  Wake up 10 years from now doing those same things and there is no money to put away and fewer jobs...unemployment, DSS, taxes, inflation etc. are eating the world from the inside

Wed, 02/13/2013 - 14:13 | 3240643 monad
monad's picture

Prelude to the cash-less economy; France falls first.

Wed, 02/13/2013 - 16:25 | 3241021 Stuntgirl
Stuntgirl's picture

Greece did it first. 3k, then 1k, then, we'll see.

Spain also has a cash transaction limit. It was 3k, now theyre talking about shrinking it to 2k.

Now France.

There is some talk that this is ilegal, because it makes dealing with a bank NOT optional. Now, I can't be forced to pay a company for a service which is not optional, right?

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