Insight from our team of leading criminal lawyers: Paying cash over $10,000 likely to become unlawful in 2020

Are you used to paying cash? The Federal Government has recently announced that it is proposing to introduce laws related to paying cash. This legislation would make it illegal for a person to either pay or receive more than $10,000 in cash. This applies in relation to goods or services to or from a business with an ABN. And that’s even if the goods or services are entirely legal.

It means that anyone caught transacting with over $10,000 could face a two-year jail sentence. Or a fine of up to $25,200.

Who would the laws on paying cash apply to?

The laws would apply to all payments made to businesses with an ABN for goods or services. Therefore, it would affect major purchases like cars, boats, housing and building renovations. The Government has said the measure would not apply to individual-to-individual transactions. That means to private sales where the seller does not have an ABN, or cash payments to financial institutions.

The laws, if passed, would take force on January 1, 2020, and for other entities on January 1, 2021.

There would be no changes to how individuals could withdraw or deposit cash. Or how they chose to use their cash when the other party was another consumer. For example, if you choose to sell a personal asset to a private individual, such as a car for $15,000, you will still be able to do so in cash. However, if you were buying a car from a car dealer, you would not be able to pay $10,000 or more of the balance in cash.

Why is the law on paying cash being introduced?

Presently it’s not illegal for a business to receive over $10,000 cash from an individual. That is provided they report it to AUSTRAC (a government organisation that monitors large financial transactions).

The Government argues that the laws are necessary for a number of reasons:

  1. Combating tax evasion. Presently, the Government believes that businesses that transact in cash are able to under-declare their earnings or sales. Therefore, they are able to avoid paying tax.
  2. Combating money laundering. The Government argues that entities that have access to tainted money, such as criminal gangs, are able to launder the proceeds of their illegal activity through legitimate businesses by paying in large amounts of cash.
  3. Creating a fairer system. The Government argues that businesses that deal in cash are gaining an unfair advantage over businesses that do not. This is because they are not going to be paying tax.

How will the laws be enforced?

The Government acknowledges that it would be difficult to monitor and enforce these laws on paying cash. However, they propose a number of ways to do so:

  1. One of the proposals is that businesses will be required to report customers that are wanting to pay with over $10,000 cash.
  2. The establishment of a ‘suspicious behaviour’ hotline, which allows individuals to report businesses that they suspect may be accepting payments of over $10,000 cash.
  3. A dedicated task force with the power to perform ‘spot checks’ on businesses suspected of accepting payments of over $10,000 cash.

Arguments against the new laws

There are several arguments in opposition to the new laws on paying cash. Firstly is that they interfere with Australians’ civil liberties and are “anti-competitive”. This is because many people use cash as an alternative to commercial banks. They argue that the recent banking royal commission had found banks had a bad record in servicing customers’ interests. People are entitled to be suspicious of dealing with banks.

It has also been argued that limiting the cash amount would be ineffective and unenforceable at battling organised crime. This is because criminals could simply find a way to get around the rules. Using smaller transactions or illegal bank accounts established with stolen identities are simple ways to defeat the laws.

Impact on the Vietnamese community

New laws on paying (and receiving) cash could have a significant impact on the Vietnamese community. This is because many Vietnamese people and businesses prefer to transact in cash. Despite this being for a number of valid and legitimate reasons, they could soon find themselves having to adapt quite significantly. Or face the consequences.

The issue of cryptocurrencies

I think that another effect of introducing these laws is that more and more people will turn to ‘cryptocurrencies’ such as Bitcoin. For those not familiar with ‘cryptocurrencies’, it is a type of digital currency that operates entirely outside of the banking system. With this system, payments can be made entirely anonymously.

Cryptocurrency is already popular across the world and is being used more and more on-the-daily. It is foreseeable that the introduction of such laws will result in further growth of this alternative currency. Ironically, this will make it even harder to detect large transactions than cash.

If the laws are introduced I will report back to my readers.

Need help interpreting the law, understanding your rights or need more direct assistance? Contact us today to inquire in regard to legal counsel and representation. Cridland & Hua – Your Brisbane Criminal Defence Lawyers.

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