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UPDATE 1-Ministers call for action on 500-euro note to cut militant funding
February 12, 2016 / 3:29 PM / 2 years ago

UPDATE 1-Ministers call for action on 500-euro note to cut militant funding

* Fears high-value note used for money laundering, attacks

* Ceilings on cash payments also being assessed

* Note is one of the most valuable in circulation (adds quotes and elements after final news conference)

By Francesco Guarascio

BRUSSELS, Feb 12 (Reuters) - Finance ministers called on the European Central Bank on Friday to look at ways of tightening access to 500 euro notes and imposing ceilings on cash payments in a bid to cut terrorists’ funding.

A number of senior officials have raised questions about the note - one of the highest-valued in the world - saying it makes it easier to carry around large sums and launder cash, going as far as calling for it to be scrapped.

The issue came into particularly harsh focus after the Nov. 13 attacks in Paris - though a Reuters investigation suggested militants may have spent as little as $7,500 on the operation.

“We are going to ask the ECB to look at cash money and the accessibility of the 500 euro note,” the chair of a monthly meeting of EU finance ministers, the Netherlands’ Jeroen Dijsselbloem, told reporters.

“There are risks that large notes and large cash amounts can be easily used for terrorism financing,” Dijsselbloem said.

The notes make up almost 30 percent of the euros held in cash and are more than five times the value of the largest U.S. note - the $100 bill.

The European Commission last week also proposed increasing controls on prepaid payment cards, virtual currencies such as bitcoin and other possible source of financing for militant groups.

EU Commission Vice President Valdis Dombrovskis said the results of a study into the feasibility on cash payment limits would be presented by May.

Britain and Austria apply no limits to consumers’ cash payments, while France imposes a ceiling of 3,000 euros for payments made by French residents.

Germany has no limit either but is considering adopting a 5,000 euro ceiling. Italy plans to raise its ceiling from 1,000 to 3,000 euros, in a move the government believes could boost retail sales.

Germany was one of the early champions of the 500-euro note to match the value of its old 1,000-mark note, valued by its citizens many of whom prefer cash over electronic money. (Editing by Jeremy Gaunt and Andrew Heavens)

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