British 500 Euro Notes Withdrawn

500 euro notes withdrawn over organised crime fears




British bank wholesalers have withdrawn 500 euro notes from sale because they are fuelling organised crime.

TELEGRAPH.CO.UK

7:30AM BST 13 May 2010

The decision to end trading was made after police found nine out of every 10 of the notes in circulation are linked to crime, tax evasion and terrorism.

It closed an annual 500 million euro (£424 million) trade in the distinctive largest denomination euro note among businesses across the country.

The Serious Organised Crime Agency (Soca), which coordinated the voluntary industry move, said there is ''no credible legitimate use'' for the note in Britain.

Officials have been watching the market for signs of criminals changing tactics since trading secretly stopped about one month ago.

They have been expecting to see drug smugglers, people traffickers and other top-level crime gangs struggling to launder their profits as a result.

The distinctive pink and purple note is a favourite with criminals because it takes up less space than other currencies and is accepted across the continent.



Tourists and other legitimate customers will not be affected by the changes and the 500 euro note remains legal tender.

Ian Cruxton, Soca deputy director, said: ''There is no doubt that the main UK demand for the euro 500 note comes from serious organised criminals.

''The banknote wholesalers have shown decisive leadership in withdrawing supply.

''This is a bold and welcome move which will cause substantial disruption to criminals' ability to move and launder large quantities of cash.''

One senior official at Soca's Financial Investigation Unit said an inquiry revealed 500 euro notes are inextricably tied to serious crime.

He said: ''As we developed a picture it became clear. What was previously only an anecdotal suggestion was borne out by the figures.

''Our analysis found that only about 10% of 500 euro notes sold in the UK retail market were used legitimately.''

The official said pulling the plug on the wholesale market may flush some criminal activities into the open.

He added: ''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.''

The 500 euro note has long been a favourite of top-level criminals and vast quantities have turned up in raids on drugs gangs from London to Latin America.

Dubbed the ''bin Laden'' because everyone knows what it looks like but rarely sees one, crooks love its portability.

The same value in cash takes up only a tenth of its Sterling alternative, making it easier to smuggle across borders.

An adult male can stuff and swallow 150,000 euros and 20,000 euros can be hidden in a cigarette packet.

Investigators said a small number of backstreet cash wholesalers have been profiting from exchanging large quantities of money for crime gangs.

Up to 500,000 euros may change hands in one transaction as criminals shrink suitcases full of Sterling to a briefcase of euros.

A second Soca official said there are ''pockets of complicity'' among a small number of wholesalers who turn a blind eye to the trade.

He said the traders, who often operate in tourist and transport hubs, are mostly based in large cities including London, Birmingham and Glasgow.

A small independent money business in London purchased four million euros in one 12-month period, more than all the euros bought by one high street bank.

In one police operation a gang of suspected money launderers chose to give up three million euros rather than attempt to prove where the cash came from.

Police across Europe will be watching for the fallout of the unannounced change, which may include an increased demand for 200 euro notes.

Border officials are also braced for criminals attempting to travel across the channel to buy large quantities of the notes in countries with no restrictions.

The official added: ''We have comprehensive intelligence systems in place to see what is happening.

''Three groups of people will see what happens over coming weeks: law enforcement, the private sector and criminals.''

Bank of England to launch new £50 note

The new £50 note features James Watt and Matthew Boulton - two pioneers of the industrial revolution

Heather Stewart
guardian.co.uk, Friday 30 September 2011 11.20 BST

The Bank of England will seek to lift the spirits of downtrodden businesses next month by evoking the memory of their glorious predecessors when it launches a new £50 note, featuring the inventor James Watt and entrepreneur Matthew Boulton.

The Bank announced on Friday that the new note, replacing one featuring the first governor of the Bank of England, Sir John Houblon, will go into circulation on 2 November. It also pointed out that it will be the first note to feature two men, and the first to be signed by Chris Salmon, the Bank's new chief cashier.

Boulton and Watt were pioneers of the industrial revolution, whom Labour leader Ed Miliband would presumably designate "producers," not "predators".

Boulton was an entrepreneur, who started work in his father's Birmingham factory making buckles for shoes and knee-breeches, but later went into partnership with Watt, backing his crucial improvements to the design of the steam engine.

The two worked together to pioneer the use of the steam engine in the cotton spinning industry, helping to cement Britain's position as the "workshop of the world," at the cutting edge of new technology.

Commercialising inventions has long been seen as an Achilles heel of the modern British economy, with few boffins possessing the financial nous to build up a successful firm. Successive governments have tried to tilt the playing field to encourage spin-out firms from universities, and boost in-house research by corporations.

But in today's economic climate, where finding sympathetic financial backers for even the most brilliant ideas can be a challenge, a partnership like Boulton and Watt's must look appealing to many a hard-pressed British entrepreneur.

And with Boulton at his side, Watt never had to endure the embarrassment of Autonomy's Mike Lynch, who at least according to Larry Ellison at Oracle, was punting his hi-tech firm, Autonomy, around Silicon Valley in search of the highest bidder – though if the £7bn deal with Hewlett-Packard goes through it will presumably go a long way to salving Lynch's hurt feelings.

For many cash-strapped families, though, the worthy example of these founding fathers of the industrial revolution will be out of reach – because many people rarely get to see a £50 note, let alone hold onto it for long enough to examine the picture on the back.