British bank wholesalers have withdrawn 500 euro notes from sale because they are fuelling organised crime.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