Cross border currency exports or imports – a primer

By Christine Duhaime | January 15th, 2012

The government is introducing measures that would allow Canada Border Services Agency officers to question people arriving in or departing from Canada with respect to their responsibilities under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (“PCMLTFA”) and would require FINTRAC to disclose to CBSA, information relevant not only for immigration purposes, but also for the purposes of determining money laundering or terrorist financing.

Under the PCMLTFA, every person must report without delay to the CBSA the importation into Canada or exportation out of Canada of currency or monetary instruments equal to or that exceed $10,000. Monetary instruments include shares, bonds, debentures, bank cheques or bank drafts, promissory notes, travellers’ cheques and money orders, provided they are in bearer form and title passes upon delivery.

Every year, approximately $8.2 million is seized from Canadians and travelers to Canada by the CBSA because of a failure to report the importation or exportation of currency or monetary instruments. A person may import into Canada or export from Canada any amount, however, amounts equal to or greater than $10,000 must be reported to CBSA.

When a person is suspected of importing or exporting currency or a monetary instrument equal to or greater than $10,000, the CBSA officer may search the person, their luggage and any conveyances.  If funds are located, the CBSA may seize them if the officer has reasonable grounds to suspect that the reporting requirements of the PCMLTFA have not been complied with. The CBSA uses “sniffer dogs” at airports and other points of entry that can detect money.

Several recent cases have confirmed that a person can be convicted of a failure to report under the PCMLTFA without having formed the intent to commit the act.

For example, in 2004, a truck driver, Van Phat Hoang, was driving across Canada and mistakenly exited to the U.S. border in the middle of the night in his truck. He had $70,000 cash with him. He turned around before reaching the U.S. checkpoint and upon re-entering Canada, his funds were seized and forfeited to the Crown because he had failed to complete a report with CBSA. The Federal Court of Canada held, based on numerous previous cases, that there is no requirement to establish intent for the offence to be proven.  It is also irrelevant who legally owns the currency or monetary instrument – the person in possession of the currency or monetary instrument is the person who is subject to the PCMLTFA reporting obligations. With respect to a conveyance, the person who controls the conveyance is the responsible party for the purposes of reporting. Several recent cases have dealt with private jets entering Canada with unreported currency. The funds are routinely seized and the controller of the jet, usually the captain, is unwittingly implicated in an unreported importation of currency into Canada.

Between 2003 and 2007, most of the seizures at the border involved undeclared currency, followed by travellers cheques, bank drafts, regular cheques, money order and share certificates.

Cross border currency reports are shared between Canada and the U.S. In the U.S., over $107 million is seized from travelers or Americans in undeclared or illicit currency every year.

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