13 Feb 2016
The EU will be launching an investigation into the use of €500 bills to facilitate terrorist and other criminal activities following increased concerns from EU law enforcement authorities.
It has been common knowledge among authorities that the notes are used by drug dealers and smugglers, but it is now thought that the high-denomination bills could have been used to fund terrorism following November’s terrorist attacks in Paris.
€500 notes are often favoured by criminals because they are among the highest value circulating notes. Using high-denomination bills makes it easier to distribute undetected a low volume of notes that equates to a high monetary value.
European Central Bank (ECB) data has shown that the number of €500 notes has grown disproportionately compared to other denominations since EU states began using Euro notes and coins in 2002. The bills now make up one-third of all Euro notes in circulation.
Last reviewed by the ECB in 2005, it was decided to keep the notes in circulation. However, research undertaken by Europol in 2014 has revealed that many shops no longer accept €500 notes.
Charles Goodhart, a former Bank of England policymaker, and Sir Charles Bean, a former deputy governor at the Bank of England, have spoken in favour of the EU getting rid of high-denomination notes. Goodhart stated last year that Swiss and ECB central bankers had been “absolutely shameless” in issuing the notes.
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