Anti-money laundering legislation requires that cheques issued above the € 1,000 threshold must carry a non-transferability clause.
Despite the fact that since 2008 banks no longer print cheque books without the "non-transferable" clause, old cheque books without this clause may still be in circulation.
What should you do in such cases?
Let us see in detail what it is all about.
THE CHEQUE
The bank cheque, together with the bank draft and the bill of exchange, is a credit instrument.
A credit instrument is a right of claim incorporated in a security, i.e. a physical paper document, and was originally created as a circulating instrument.
By the endorsement, in fact, it is possible to transfer the right of credit mentioned in it in accordance with the conditions laid down by law.
REASONS FOR THE PROHIBITION
The purpose of the anti-money laundering legislation is essentially to prevent the offence of money laundering referred to in Article 648-bis of the Criminal Code: "The offence of money laundering is committed by anyone who, except in cases of complicity in the offence, replaces or transfers money, goods or other benefits resulting from a non-culpable offence, or carries out other transactions in relation to them, so as to hinder the identification of their criminal origin.
The provisions dictated by the legislator aim mainly at:
(a) identify the persons involved in the transactions;
b) identify the source of the money used in the transaction (the so-called "origin of the funds").
In this regulatory framework, the mandatory nature of the non-transferability clause also pursues the intention of preventing the laundering of money flows deriving from criminal activities, by limiting the circulation of the instrument.
THE NON-TRANSFERABILITY CLAUSE
Bank and postal cheques issued for amounts in excess of € 1,000 must bear an indication of the name or company name of the beneficiary and the non-transferability clause (Article 3(5) of Legislative Decree 90/2017).
Such cheques can only be endorsed for collection to a bank or to Poste Italiane S.p.A.
This means that with the non-transferability clause affixed by the issuing bank or by the drawer, the cheque loses the nature of a circulating instrument and can only be paid on sight to the first beneficiary of the cheque, who is required to show it for collection, together with the presentation of an identity document.
Transfers exceeding the threshold of € 1,000, whatever the instrument, are also prohibited when they are made by means of several payments, each of which is lower than the threshold (a so-called "fractional operation", where the economic operation is a single one, but carried out by means of several payments).
All bank and postal cheque forms are currently issued by banks and Poste Italiane S.p.A. with a non-transferability clause.
However, the customer may request in writing the issuance of bank cheques, postal orders and promissory notes for an amount of less than € 1,000 without the non-transferability clause.
In this case, the applicant shall pay, for each individual form, the sum of € 1.50 as stamp duty.
LIMITS ON THE USE OF CASH
The non-transferability clause is in addition to the limit on the use of cash: above the threshold indicated by law, it is necessary to use traceable means of payment, such as cheques, electronic payment cards or credit transfers.
Already from 1 July 2020, the limit on the use of cash fell from € 3,000 to € 2,000.
As of 1 January 2022, cash could only be used up to the threshold of € 999.99: from € 1,000 onwards, it was necessary to use a negotiable means of payment.
However, the "Thousand extensions 2022" decree (d.l. 228/2021) confirmed again the € 2,000 threshold for the use of cash, postponing the entry into force of the € 1,000 threshold to 1 January 2023.
In application of the principle of favor rei, any money transfers already made above the amended threshold are considered as never having been made.
Non-compliance with the cash limit is sanctioned with administrative fines ranging from € 2,000 to € 50,000.
The legal threshold cannot be exceeded in the following cases:
* transfer of cash in euro (or foreign currency);
* transfer of bearer instrument in euro (or foreign currency);
* bearer bank or postal passbooks.
The limit on the use of cash is, of course, also valid for the payment of professional services (such as, for example, the payment of a commission to a real estate agent).
OBLIGED PARTIES
The persons required to comply with the anti-money laundering legislation in relation to the functions actually performed are:
1) banking and financial intermediaries;
2) other financial operators;
3) professionals, in the exercise of their profession in individual, associated or corporate form (e.g. accountants, lawyers, notaries);
4) other non-financial operators, including estate agents and agents for pecuniary interest, referred to in Law 39/1989 and subsequent amendments and additions;
5) gaming service providers.
THE SANCTIONS REGIME
As of 4 July 2017, a sanction ranging from € 3,000 to € 50,000 is in force for the transfer of cheques without the non-transferability clause and the indication of the beneficiary, without prejudice to the applicability of the "oblation" for amounts not exceeding € 250,000.
For violations committed and contested between 1 July 2020 and 31 December 2021, the minimum fine is set at € 2,000.
For breaches committed and contested from 1 January 2022, the minimum fine is € 1,000.
After receiving the notification, the sanctioned party may choose two ways:
a) wait for the conclusion of the sanctioning procedure, submitting its observations;
b) extinguish the sanction by oblation.
By oblation, the offender may pay a sum of money for the purpose of early closure of the proceedings, provided that the payment is made within 60 days of the notification.
The amount of the oblation is always equal to the third part of the maximum penalty provided for, or, if more favourable, double the minimum.
In the event that the offender wishes to wait for the outcome of the sanctioning procedure, hoping for an acquittal, but is convicted, the person concerned may ask for the sanction imposed to be reduced to one third.
When the infringement is less than € 30,000, in the presence of circumstances of lesser gravity pursuant to Article 67 of Legislative Decree No. 231/2007, the minimum penalty is 10% of the amount transferred through the use of irregular cheques.
This is because the administrative pecuniary sanction and the related oblation must be proportionate to the value of the transaction carried out in violation of the legislation.
Unfortunately, it is not possible to know in advance whether it is convenient to pay the fine or to wait for the sanctioning procedure, since the penalty imposed may be higher or lower than the amount of the fine.
TIPS
It is vitally important to check that the cheque contains a non-transferability clause and that the beneficiary is named correctly.
If you find that you have an old cheque book, it is advisable to use the book only to transfer sums of money up to the limit allowed for cash.
Alternatively, you can manually write the word "non-transferable" in the space provided on the cheque and then, of course, ask your bank for a new chequebook in which the clause is already written ab initio.
REGULATORY REFERENCES
For those who wish to study the matter in more detail, here are the relevant regulatory references.
. Legislative decree 231/2007, concerning the "Implementation of directive 2005/60/EC on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing and of directive 2006/70/EC laying down implementing measures and subsequent amendments and additions"
. D.l. 201/2011, 'Urgent provisions for growth, equity and consolidation of public accounts'
. Legislative decree 90/2017, "Implementation of Directive (EU) 2015/849 on the prevention of the use of the financial system for the purpose of money laundering and terrorist financing and amending Directives 2005/60/EC and 2006/70/EC and implementing Regulation (EU) No 2015/847 on information accompanying transfers of funds and repealing Regulation (EC) No 1781/2006", in force since 4 July 2017
. vademecum MEF 12 March 2018
. D.l. 124/2019, converted by l. 157/2019, which in Article 18 provides for further amendments to Legislative Decree 231/2007 and subsequent amendments, to which paragraph 3-bis is added, establishing a new limit on the use of cash
. Legislative decree 125/2019, on "Amendments and additions to legislative decrees no. 90 and no. 92 of 25 May 2017, implementing Directive (EU) 2015/849, as well as implementing Directive (EU) 2018/843 amending Directive (EU) 2015/849 on the prevention of the use of the financial system for the purpose of money laundering or terrorist financing and amending Directives 2009/138/EC and 2013/36/EU", in force since 10.11.2019
. D.l. 228/2021 (so called 'Thousand extensions 2022' decree), converted by l. 15/2022, 'Urgent provisions on legislative deadlines'
