Denied Access to His Own Money, A Bank Customer's Plight Shows the Shape of Things to Come

Sure, CBDCs will make things worse, but they are bad 'enough' already to warrant serious conversations about the current state-of-affairs

Long-time readers know about my concerns with respect to the looming introduction of central bank digital currencies, or CBDCs. Reference is made to the below posting:

EU/ECB Coup Imminent

Today, I shall provide further insights into the proverbial shape of things to come, courtesy of Bergens Tidende that documents the plight of one individual who tried to take out 80,000 Norwegian crowns (approx. US$ 8,000) in cash—from his own bank account. Citing ‘tax evasion, wire fraud, and anti-terror regulations’, 28-year-old plumber Adrian Ben Zaiter Osmundsen was denied access to his own money.

As to the amounts of money mentioned in the below piece, the currency is Norwegian crowns, or NOK, and given its current exchange rate, divide all amounts cited by 10 to arrive at their approx. value in US$ or Euros.

I have therefore decided to translate the piece in ints entirety, added emphases, and provide some commentary in the customary ‘bottom lines’.

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Adrian Wants to Withdraw 80,000 in Cash From his Account. Sparebanken Vest refused.

‘It's completely outrageous that I can’t withdraw my own money.’

Bergens Tidende, By Gerhard Flaaten, 15 Aug. 2023 [source]

For just under a week, Adrian Ben Zaiter Osmundsen has been trying to withdraw a large amount of thousand crown bills [1,000 NOK is roughly equivalent to US$100] from his own account at Sparebanken Vest. So far, he has not managed to withdraw a penny.

‘I never imagined this would happen’, says Osmundsen. The 28-year-old leans against a new kitchen unit, surrounded by construction dust. He bought the terraced house in Laksevåg with a partner earlier this year. The plan is to renovate the property and sell it at a profit, and to help him, Osmundsen wanted to hire a group of volunteers to work for cash.

‘You can pay people up to NOK 6,000 tax-free for small jobs. That’s what I intend to do’, says Osmundsen.

Impractical to go to the ATM Eight Days in a Row

It's not easy to withdraw large amounts of cash. ATMs usually have a limit of NOK 10,000 per day, and the limit for in-store withdrawals is the same.

‘It's quite inconvenient to go to the ATM eight days in a row’, says Osmundsen.

[Information box] Cash in Norway

• The Norwegian Central Bank Act states that Norges Bank’s banknotes and coins are legal tender.

• This means that no one can refuse to pay in notes and coins. [that’s the law, but more and more businesses are doing so, thereby breaking the law—but so far there’s been no penalties, let alone other consequences]

• Norwegian banks are also obliged to accept banknotes and coins from their customers, and to make deposits available in banknotes and coins if customers so wish, according to Norges Bank’s website.

• This is an important principle, to ensure that people do not think that money in an account is worth less than money in hand.

• The value of Norwegian banknotes and coins in circulation was stable at around NOK 50 billion in the years 2007 to 2016, but has fallen in recent years.

• Last year, there was cash worth NOK 40 billion in circulation, according to Norges Bank’s annual report on banknotes and coins.

• This represents only 1.4% of the NOK 2,800 billion in accounts around the world, known as money of account. Compared to other countries, this is very little.

• Since 2013, the 500 note has been the most popular banknote in circulation in Norway, while the 1000 note is the least popular of the banknotes.

He called his account manager at Sparebanken Vest directed him to a form that he filled in and handed in personally at the bank.

He stated that he was going to use the money to pay for services [in the above-related manner], and in the form, he listed ‘several voluntary services by private individuals, teenagers, local community services, neighbours, etc.’ as recipients.

That wasn’t good enough. Later that day, he received a message in his online bank account: not approved.

Sparebanken Vest demanded documentation of the purpose of the withdrawal and the names of those who were to receive the money:

‘If you are unable to document the above, we request that you use an ordinary [digital] bank transfer’, says the message from the bank, which BT has seen.

‘This is completely outrageous. This is not something they should be able to say no to—it’s my money’, says Osmundsen.

[BT] Why can’t you use Vipps [a popular app for remote payments] or bank transfer?

‘I could have done that. But now it’s become a matter of principle for me. It’s my money, I should be able to spend it on whatever I want’, says Osmundsen.

Money I’ve Earned Honestly

He sent an irritated email back. He admits that he went a little overboard. [who wouldn’t have done so?]

‘I have stated why I want a withdrawal and this is a fair reason, but if I wanted to spend the money on hookers and drugs, I should be able to do exactly that without you being able to deny me’, he wrote to the bank.

The bank disagreed.

They again asked for documentation of the services provided, proof of where the money came from [this is hilarious: the bank already knows that because the money is in Mr. Osmundsen’s account…], and the full names of everyone he wanted to pay with the cash. [that latter part is outrageous: it’s none of the bank’s business]

This is unthinkable for Osmundsen to do:

The bank forgets its role here. This is money I have earned honestly. I must be allowed to withdraw my own money and spend it on what I want, without having to document anything.

Sparebanken Vest: Our duty

The Financial Institutions Act [orig. finansforetaksloven] ensures that deposits must be made available to customers in the form of cash in accordance with the customer’s expectations and needs.

The monkey wrench in this case, though, is the Money Laundering Act [orig. hvitvaskingsloven]: it obliges banks to monitor both the origin and destination of customer funds to prevent money laundering and terrorist financing.

In its latest risk assessment, the Financial Supervisory Authority of Norway considers the banks to be at high risk of being misused for money laundering.

Sparebanken Vest will not say anything about why they will not pay out the cash to Osmundsen, although he wishes to release them from their duty of confidentiality. Head of Communications Hanne Dankertsen states that they do not comment on individual cases or customers.

On a general basis, Dankertsen states that they are obliged to obtain information and documentation from customers in order to gain the necessary insight into where the money comes from and what it is to be used for, she writes in an email.

When they do not receive this, the bank has ‘a legal obligation not to carry out the transaction or, in the extreme case, to terminate the customer relationship’, Dankertsen writes.

Tried a New Bank

Osmundsen did not give up. This week, he transferred the money to his account at Sparebanken Sogn og Fjordane, and applied for a withdrawal from their branch in Bergen. The result was the same.

He was told that private customers are generally not allowed to make cash withdrawals in excess of NOK 50,000 per year. He was also asked to explain why he did not want to transfer the amount electronically.

‘This is because, as a bank, we are subject to strict obligations under the money laundering rules to control the origin and purpose of funds’, writes Johanne Sandnes, Communications Director at Sparebanken Sogn og Fjordane, who emphasises that she is speaking on a general basis:

They have carried out a risk assessment and concluded that NOK 50,000 is the right level for the bank, adding:

We understand that this practice is unfamiliar to those who wish to use cash to a greater extent.

As a result, Adrian Osmundsen has to give up his plan to withdraw NOK 80,000 in one go.

‘It will have to be an ATM or Vipps. But I think it’s crazy that I have to do that. If the documentation requirements are so stringent, why is it okay to withdraw NOK 10,000 from the ATM eight days in a row?’, he asks.

Professor: ‘More Catholic than the Pope’

Professor Tor W. Andreassen at the Norwegian School of Economics says he understands Osmundsen’s frustration:

This is the consequence of the fully digital, cashless society and the fear of a black economy. In the process, people have become more Catholic than the Pope.

According to the professor, it is desirable for a society to register as many transactions as possible in order to reduce the extent of the black economy.

The banks only do what they are required to do by the Financial Supervisory Authority of Norway.

This comes at the expense of the freedom of the individual.

Unfortunately, it’s a sacrifice we have to make. The benefits compensate for the pain of not being able to pay craftsmen in cash’, Andreassen says.

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Bottom Lines

The first thing that comes to my mind is the stupidity of Mr. Osmundsen. As a resident of Norway, I understand his frustration (try finding an ATM when in need: there are hardly any left), but to make this molehill into a mountain is certainly not helpful.

Around 4% of Norwegians use cash, with the majority of transactions being carried out digitally either via phone-relayed payments of apps, such as Vipps.

I have my opinions about it, sure, but Norway at least has laws on the books that guarantee the right to pay cash up until 1,000 crowns (ca. US$ 100).

The one thing the above piece makes abundantly clear is there are already in place so many regulations, ordinances, laws, etc. that the introduction of CBDCs, which I oppose, is but a kind of ‘streamlining’. Nothing fundamentally changes, as the powers-that-be can control everything already if they choose so (just ask Mr. Farage in the UK or the Canadian truckers). To exert control, no additional measures are technically needed.

What CBDCs will do, though, is drastically widening the monitoring opportunities, which, in effect, will result in the collection of kompromat on every single individual.

I recall taking out some cash on 24 Feb. 2022—only to receive an email from my bank reminding me that I may only withdraw cash free of charge 8 times per year.

Everything in Norway is working against cash payments, even though I admit that, in the long term, I’m not too concerned, and here is why:

Yes, if eventually introduced, CBDCs will render surveillance a daily thing, and I reject it. Yet, if introduced—which also means the erection of a social credit scoring system—people will spend this ‘money’ only on ‘permitted’ things. For everything else, they will turn to ‘alternative’ options, such as offshore bank accounts, other things to be used in lieu of cash (which typically happens after war, e.g., the immediate post-1945 society in Central Europe relied heavily on, say, cigarettes and liquor as ‘cash’).

The irony here is that while I do not believe the authorities’ claim that this is all done to ‘keep us safe’ (by preventing ‘terrorism funding’ or the like), they are quite honest about the black market aspects.

In all likelihood, though, this set of policies will most likely result in more, not less, ‘black’ activities.

Talk about unintended consequences.

Also: shame on you, banks, for putting up with this kind of BS.

It is, though, a good time to open a new banking institution that would not do that; I suppose it would gather a sizeable customer base before too long.