I see there is a certain amount of ignorance about the significance of Eur500 notes, so let’s elaborate, shall we?
The reasons are legion why a cabinet minister, of all people, shouldn’t 1. have Eur500 notes and 2. use them to pay for things in shops, especially when the purchase is of small value, making it obvious that the reason for that purchase is to break up the inconvenient note.
But there is one reason above all others: Eur500 notes are linked to crime and other forms of illicit or dubious activity. You will find it impossible to use a Eur500 note in any shop, restaurant or other commercial establishment, and you will be told, “We can’t accept that, sir/madam. Do you have a card, please?” or another variant of the same polite refusal.
For years, the refusal was because these were the notes most commonly forged, because of their high denomination. Now the refusal is because of fears that the notes might be ‘dirty’ and traceable as such.
As a result, they have been practically pushed out of circulation, making the rare appearance of one of them, and the attempt to use it as currency, even more startling and suspicious.
As far back as three years ago, Sky News reported that banks and foreign exchange bureaux in Britain stopped trading in Eur500 notes after 90% of them were found to be linked to tax evasion, terrorism, drug trafficking and other crimes.
The move was voluntary, but was coordinated by Britain’s Serious Organised Crime Agency, which said that there is “no credible legitimate use” for the note in the UK.
That is not necessarily because the UK is not in the Eurozone, because the same applies within in. Despite the fact that we buy and sell things in euros, cash transactions even for small amounts are increasingly a thing of the past. We all use debit or credit cards now, so when somebody produces a Eur500 note, eyebrows are raised.
The Serious Organised Crime Agency said that 90% of Eur500 notes in Britain were used by criminals wanting to move large quantities of cash about. With Eur500 notes, you can put Eur20,000 into an empty cigarette packet, in the form of just 40 notes.
Sky News reported (13 May 2010):
One senior official at Soca’s Financial Investigation Unit said an inquiry revealed 500 euro notes were inextricably tied to serious crime.
“As we developed a picture it became clear. What was previously only an anecdotal suggestion was borne out by the figures,” he said.
“Our analysis found that only about 10% of 500 euro notes sold in the UK retail market were used legitimately.”
Soca hopes that by taking the note out of circulation, criminal activity may be left more exposed.
The official said: “We anticipate criminals will be moved out of their comfort zone and will have to use other mechanisms for moving cash.
“They will not be able to use their favoured mechanism and that in turn will draw attention to their activities and offer up opportunities for law enforcement.”
Dubbed the “bin Laden” because everyone knows what it looks like but rarely sees one, the 500 euro note was secretly withdrawn from trading around a month ago.
(…)
“This is a bold and welcome move which will cause substantial disruption to criminals’ ability to move and launder large quantities of cash.”
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They’ve been banned in Italy as well. Perfect for tax evasion and kickbacks.
Some more details about what you say can be found here
http://www.bloomberg.com/news/2010-04-19/500-euro-bill-lifts-crime-terror-tax-risk-bank-of-italy-says.html
http://news.sky.com/story/779671/criminal-gang-link-forces-out-500-euro-note
What Daphne is saying is correct.
I realised all this when I tried to get hold of a few to give to my children as a Christmas present.
I have never seen so many eyebrows being raised at my bank.
The suspicious looks took me by surprise.
They eventually, after a good ten days, provided me with some.
It would have been easier, I am sure, to get hold of a wad of North Korean won.
Anthony, Manwel Mallia might be happy to oblige, should you require any next time round.
Perhaps this note came from China? :)
Here’s a link from Tripadvisor from atravller with similar problems to Minister Cordina:
http://www.tripadvisor.com/ShowTopic-g187309-i118-k6561076-How_to_break_500_euro_notes-Munich_Bavaria.html
Another criminal lawyer in the cabinet, flashing his cash.
Why do the majority of people see absolutely nothing wrong with this?
Why is there some collective blindness to the emerging fact that Labour is a government with little or no morals/ethics and entirely not fit for purpose?
I know Wikipedia isn’t a good source but this is interesting: http://en.wikipedia.org/wiki/500_euro_note
See also: http://blogs.wsj.com/economics/2013/04/09/should-ecb-kill-the-500-euro-note/ (Wall Street Journal)
http://www.maltatoday.com.mt/en/newsdetails/news/national/Marlene-Farrugia-calls-for-credible-declarations-of-assets-20130727
Reported on 25th April 2013, from Brussels
‘ECB VIce President, Vitor Constancio told Euro lawmakers on Wednesday ‘The note is not commonly used’ suggesting its’ not so evidently a need for the payment system’
Critics say law abiding citizens rarely use the 500 euro note, and that it is the favourite cash denomination of those doing illegal business as they seek to avoid electronic payment trace.
Cardona must be very angry about this “inciting hate” here.
We know he threatened a journalist live on camera during a press conference when he felt pressured.
Why did the European Central Bank print them?
To replace the DM1,000 note that disappeared with the introduction of the euro.
One reason the idea for a €500 note was even hatched was because they knew that it would become the currwncy of choice for its storeability, thus increasing demand for it. They just didn’t realise it’d be as successful as it has been in completely replacing the US dollar as the currency of choice for these people.
But it’s legal tender is it not? Is it banned in Malta? If not, then there is nothing to answer to. It could be totally legitimate.
[Daphne – A minister’s only source of income is his salary. That salary is not paid in notes, and withdrawals from ATMs do not give you Eur500 notes.]
I do not entirely concur with the reasons espoused above re this denomination. I come across them often and they come in handy for legit payments from customers of a certain age. Not everyone has embraced the e-age. And I have never come across the raising of eye brows from bank clerks when transacting such notes.
In the UK and Europe it’s the same; no one would take notes £100+.
Tithajjar? http://www.independent.com.mt/articles/2013-07-28/news/mintoffs-delimara-home-on-the-market-2182905864/#prettyPhoto
Simon Busuttil has finally opened his mouth on the Dalli case – http://www.timesofmalta.com/articles/view/20130728/local/muscat-should-make-dalli-resign-simon-busuttil.479862
Absolutely spot on.
Canada had a similar problem with its $1000 notes; they were withdrawn from circulation because of their links with organised crime and money laundering – http://www.cbc.ca/news/business/story/2000/05/08/1000bill000508.html
Anyone who is aware of what is going on in the world of transfer of money, in cash, in high denomination notes, should be aware of all that has been written above.
So what really surprises me is that here we have a lawyer of repute in criminal law, who has assumed the responsibility of an important minister in our government, amassing such a huge sum of cash, not depositing it in a bank, and letting everyone know that he has done so.
Is this due to ignorance, carelessness, overconfidence, or naivety? One does not associate such qualities in a lawyer of repute.
The prime minister may wish to dismiss all this by his usual “So what!”, “Why not!” or “Results will show”, but he can rest assured that serious observers, including foreigners, whether in politics, law, diplomacy or business will not take his word as a satisfactory explanation.
The above comment was meant for persons who hoarded all this cash, rather than to someone occupying an important political office who chose to cash such a note in an obviously curious way.
The prime minister may equally wish to note that reactions to such behaviour by intelligent observers are not easily satisfied by a “so what” dismissive attitude.
It is illegal for anyone to refuse any denomination which is legal tender.
[Daphne – A Eur500 note is not legal tender for a Eur25 purchase. The legal tender of a bank note is qualified in relation to the value of the purchase.]
No it isn’t. Did you know that a shopkeeper can even refuse your custom if you don’t have the right change?
Only if the shopkeeper is in the enviable position of cherry-picking his customers.
I would understand a shopkeeper refusing the high denomination note on the basis of not having enough change for other customers but not solely on the basis of the high value.
Suppose the amount of goods bought would have been almost or even exceeded five hundred euros, would you as a shopkeeper be expected not to accept the note? On what grounds?
I said any basis. ANY BASIS. Shopkeepers are free to refuse anyone’s custom. Go and have a word with a legal expert. I give up.
If Cardona has a legitimate reason for having that Eur500 note, he would have deposited it in an ATM and not tried to break it up at a shop with a Eur25 purchase.
My thoughts exactly.
http://news.bbc.co.uk/2/hi/8678979.stm
This has nothing to do with the above but it seems that Malta is not alone at the receiving end for gifts from China. Tonga receives free unsafe planes and badly built buildings and roads in return for vote in the UN and access to their fish stocks and minerals.
http://www.bbc.co.uk/news/magazine-23469223
Does China control Tonga’s energy supply and, therefore, its competitiveness and its economy, in exchange for a vote in the EU?
Just asking.
We were recently purchasing a birthday gift at a jewellery shop in Valletta when a non-Maltese couple walked in and after some browsing decided to buy a bracelet. They tried to buy the 300+ euro item using a 500 euro note. The owner preferred to risk losing the sale rather than accepting the 500euro note. At the time it struck me as odd.
I have only ever seen €500 notes twice in my life – once at a Burger King outlet abroad, where somebody tried to buy a burger with one such note, making it pretty obvious that he wanted to break the note up (he was refused). The second time was at Arkadia in St Julian’s around a year or so ago, where a scruffy (but ‘tal-pepe’) middle-aged Maltese woman tried to buy something worth around €10 with another such note. The cashier had referred the matter to her manager who, I believe, obliged.
When I worked as a barista at the airport, I had a lot of shady foreigners trying to purchase a cheesecake with a 500-euro note. However, I always just refused the note (as I was told to do), and never gave it a second thought. Never realised what the implication of the note are.