Drop High-Value Bank Notes to Fight Crime

February 9, 2016 International Tax Cooperation

High value bank notesCAMBRIDGE – Criminals, tax evaders and bribe takers around the world would find life much harder if governments eliminated the use of high-value banks notes.

Worldwide efforts to thwart tax evasion, money laundering, and financing of crime and terrorism would be complemented by a move to eliminate the use of high denomination bank notes, according to the results of new research published over the weekend by the Harvard University.

According to the lead author, Peter Sands, the former chief executive of the UK-based Standard Chartered bank, the modern economy revolves around electronic means of payment, including debt and credit cards, and contactless payment methods, to entirely electronic online payments, and in the current environment there is no strong demand among everyday consumers for high denomination bank notes.

However, high-value bank notes are often used to facilitate a multitude of illicit activities due to the inherently private and untraceable nature of banks notes, and the relative ease of transporting large amounts of such funds.

By eliminating high-denomination notes governments could significantly hamper the means of payments currently being used for illicit activity, and would effectively increase the risk and cost associated with laundering funds or hiding illicit profits.

Additionally, the elimination of convenient payment methods for illicit activity would also complement any efforts to fight tax evasion, as criminals would need to move their funds through the legitimate banking system.

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