The Government has released for public consultation the exposure draft Currency (Restrictions on the Use of Cash) Bill 2019 and accompanying Exception Instruments to implement an economy-wide cash payment limit from 1 January 2020 and to remove most of the threshhold transaction reporting obligations for AUSTRAC reporting entities from 1 January 2021.

The limit applies to all cash transactions equal to or in excess of $10,000, except for those that meet the conditions specified in the draft Currency (Restrictions on the Use of Cash—Excepted Transactions) Instrument 2019.

The cash payment limit will not apply to transactions where an authorised deposit-taking institution accepts deposits or pays out withdrawals. Further, a reporting entity that provides foreign currency exchange services regulated under the AML/CTF Act will also be exempt as this service inherently involves cash. 

From 1 January 2020 it will be a criminal offence to make or accept a payment from businesses that includes $10,000 or more of cash. It will also be an offence to make or accept a cash donation equal to or in excess of $10,000. The maximum penalty is up to two years imprisonment and/or 120 penalty units (currently $25,200).

The cash payment limit will apply to the total price of a single supply of goods or services, regardless of whether the price is split into a series of payments over time.

The total cash payments made towards the final price paid must not equal to or exceed $10,000. The remainder of the payments must be made electronically or by cheque.

Two of the offences apply if an entity makes or accepts a cash payment or series of payments, with strict liability applying to the circumstances of the payment including cash in equal to or exceeding the cash payment limit. That is, the offences are committed regardless of whether the entity intended or was reckless about whether the payment or series of payments included cash that equalled or exceeded the cash payment limit. The other two offences apply if the entity intended or was reckless about making or accepting such a payment or a series of payments.

All of the offences provide that the offence does not apply to a payment if either the payment is one that the Treasurer has specified by legislative instrument. The offences also do not apply to the making or acceptance of a payment in circumstances specified by the Treasurer by legislative instrument.

Excepted transactions
The payments not subject to the cash payment limit are:

• payments related to personal or private transactions (other than transactions involving real property);
• payments that must be reported by an entity under anti-money laundering and counter-terrorism legislation, provided, broadly, the entity with a reporting obligation complies (or is reasonably believed to have complied) with their obligations under that legislation;
• payments made or accepted by a public official in which the public official is legally required to make or accept a cash payment in the course of their duties;
• payments that only exceed the cash payment limit because the payment is part of a transaction involving collecting, holding or delivering cash and this is undertaken in the course of an enterprise of collecting or delivering cash (i.e., providing cash-in-transit services);
• payments that only exceed the cash payment limit because payment is or includes an amount of digital currency; and
• payments that occur in situations where no alternative method of payment could reasonably be used.

Changes to reporting obligations
From 1 January 2021 to give effect to an economy-wide cash payment limit, the mandatory threshold transaction reporting obligation will be removed for all reporting entities regulated under the AML/CTF Act, other than those engaging in the exempt services. These entities will not be required to report payments of $10,000 or more as they cannot legally receive such payments.

ADI’s and reporting entities that provide foreign currency exchange services must continue to submit threshold transaction reports when they engage in transactions involving an amount not less than $10,000.