Source: Canada US
Link: Can I appeal a currency seizure by the Canada Border Services Agency?
Yes, there is a legal mechanism to appeal a currency seizure by the Canada Border Services Agency (“CBSA”). You have a legal obligation to report any import and/or export of currency and/or monetary instruments of more than $Canadian 10,000 (including the equivalent in other currencies). We say “more than $Canadian 10,000”, we mean the combined value of all the currency and monetary instruments. We do not mean each type of monetary instrument separately.
When you travel by air, you are required to answer a question on your E311 Declaration Card or at the automated kiosk asking whether you have currency or monetary instruments in excess of $CDN 10,000. When arriving by vehicle to a land border crossing, you are required to report to the primary CBSA officer whether you have currency and/or monetary instruments exceeding $Canadian 10,000 in the vehicle. If you are leaving Canada, you are required to go to a CBSA office in the airport or border crossing to complete an E667 “Cross-Border Currency or Monetary Instruments Report – General” to report currency and monetary instruments exceeding a combined value of $Canadian 10,000.
If the CBSA determines that you have more than $Canadian 10,000 (all conversions using the preceding day’s Bank of Canada rate), then the CBSA could do one of 6 things:
1) Give you a warning;
2) Impose a penalty of $250 if it is your first time failing to report and there was no attempt to deceive;
3) Impose a penalty of $2500 if this is your second time failing to report;
4) Impose a penalty of $5000 if this is your third time failing to report;
5) Impose a penalty of seizing all the currency and monetary instruments if this is your fourth or more time failing to report; or
6) Seizing all the currency and monetary instruments if the officer believes it could be proceeds of crime.
If the CBSA accepts that the currency and/or monetary instruments are not proceeds of crime, they will seize the currency and/or monetary instruments and return the currency and/or monetary instruments after the payment of a penalty.
All of these penalties/seizures can be appealed. However, the appeal must be filed within 90 days of the incident.
What should a person do if their currency is seized by the CBSA?
If the CBSA has seized currency and/or monetary instruments, you may file a request for a review to the Recourse Directorate. The Request for a Minister’s Decision must be filed pursuant to section 25 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act within 90 days of the date of the seizure. If you file the Request for a Minister’s Decision late, it will not be considered by the Recourse Directorate (because there is a statutory deadline). We recommend that you get assistance from a lawyer because you will have to organize evidence. It is difficult to know what evidence to provide.
We have been involved in many currency and/or monetary instruments seizures by the CBSA. Based on our experience, it is always necessary to provide additional documentation to prove that the currency and/or monetary instruments are from legal sources. A letter or written statement is never enough in the eyes of the CBSA because people will say anything to get money back. The CBSA wants to see a paper trail to the source of the funds. The CBSA is asking whether the large sum of cash is being laundered. The CBSA is asking if the funds come from illegal activities. The CBSA is asking whether the money is to be used to fund terrorist activities. The CBSA is asking whether the traveller is committing some other form of illegal activity. These questions can be successfully answered with evidence that can be corroborated. More evidence is better than less evidence. The CBSA believes that if the currency or monetary instrument is legal, there should be an abundance of proof.
For example, a client was able to successfully show that currency was not proceeds of crime by providing proof of legal employment, direct deposit of pay from the legal employment into a bank account and a recent withdrawal from the bank account for the amount in the person’s possession.
A client was able to successfully show that currency was a bequest and was received from the executor of his grandfather’s estate two days prior to travel to Canada. The executor provided a copy of the will, evidence of the reading of the will and proof of payment.
Many other travellers to Canada have not been so lucky in demonstrating to the CBSA the legitimacy of the source of the cash. There are many cases. In one case, the person could prove that he received the cash from family members. However, he did not prove that the family members received the cash from legal sources. It was necessary to get very private financial information from the family members about legal employment, bank accounts, etc.
In another case, the traveller was a waitress and did not put all her tips in a bank account. She could not prove to the satisfaction of the CBSA that the money was not proceeds of crime because the CBSA believed the money should have gone into a bank account. The question was raised whether the traveller committed tax evasion (because if the cash tips were not reported as income, they would have been proceeds of crime).
There is some discussion as to whether persons with offshore bank accounts in certain countries are importing proceeds of crime if they bring cash or bank drafts to Canada and do not report the currency and/or monetary instruments. The Canada Revenue Agency has taken the position that Canadians have offshore accounts in order to commit tax evasion.
What should a person do if the CBSA imposes a penalty?
Depending on the level of penalty, the person may appeal the penalty or decide not to. The enforcement action will remain on the person’s CBSA record for up to 6 years. The person may be referred to a secondary inspection more often.
If the CBSA has imposed a penalty, you may file a request for a review to the Recourse Directorate. The Request for a Minister’s Decision must be filed pursuant to section 25 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act within 90 days of the date of the seizure. If you file the Request for a Minister’s Decision late, it will not be considered by the Recourse Directorate (because there is a statutory deadline). We recommend that you get assistance from a lawyer because you will have to organize evidence. It is difficult to know what evidence to provide.
Whether an appeal of a currency penalty will be successful depends upon the facts. If you clearly failed to report currency and/or monetary instruments exceeding $Canadian 10,000, it is difficult to overturn the penalty. If the CBSA imposed a higher level penalty than the law permits, then it is possible to reduce the level of penalty to the correct amount.
We have been involved in appeals of currency penalties by the CBSA. for example, we were successfully able to prove that the CBSA imposed the penalty against the incorrect person. In this case, the currency was in the possession of a wife and the CBSA imposed the penalty against the husband.
We were also successful in overturning a currency penalty when the CBSA imposed a penalty against two persons for a single importation of currency.
We were successful in over reducing a currency penalty of $2500 to $250 when it was clear that the traveler did not have a previous currency infraction and did not attempt to deceive. A mere failure to report is not deception. It is forgetfulness.
A client was able to successfully argue that an unendorsed cheque written by the person to himself as the payee was not a “monetary instrument” because it had to be endorsed before a bank would release the funds. The penalty was overturned because he did not have currency and/or monetary instruments exceeding $Canadian 10,000.
What if the CBSA also cancelled a NEXUS membership?
Often the CBSA will confiscate a NEXUS Card when processing an enforcement action relating to currency. Please see How Can I Get My NEXUS Card Back When It is Cancelled/ Confiscated By The CBSA?
For more information, please contact Cyndee Todgham Cherniak at 416-307-4168 or by email at email@example.com. For more information, please read other articles on the LexSage website.