Canada: Exception To Currency Reporting Rule: You Do NOT Have To Report If You Inform CBSA You Will Not Enter Canada

Last Updated: January 8 2018
Article by Cyndee Todgham Cherniak

On December 28, 2017, Canada's Federal Court of Appeal ("FCA") issued a significant decision relating to the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.  In Williams v. The Minister of Public Safety and Emergency Preparedness, 2017 FCA 252, Justice Stratas (a very good justice who writes well explained decisions) held that currency seized from Mr. Williams should be returned to him because the Canada Border Services Agency (CBSA") did not have legal authorization to seize it.

The facts of this case are important.  Mr. Williams is an American citizen who got made a wrong turn at the Blue Water Bridge and ended up at the CBSA Primary booth (about to enter Canada). When Mr. Williams arived at the Primary CBSA booth, he informed the Primary CBSA officer that "he made a wrong turn and did not intend to enter Canada." He wanted to return to the United States.  The Primary CBSA Officer proceeded to ask Mr. Williams the usual questions. During the questionning, Mr. Williams failed to report currency that he had with him and converted to $CDN 13,518.50 ($USD 10,758). In fact, he falsely declared to the CBSA that he did not have currency or financial instruments in excess of $CDN 10,000. When the CBSA asked about the bulge in his pocket and counted the money, the CBSA learned Mr. Williams had more than $CDN 10,000 and, therefore, had made a false statement to them.  The CBSA seized Mr. William's currency of the basis of failure to report and he had not satisfied them that the currency was obtained from legitimate sources.  Mr. Williams filed a request for review.  After a request for review, the CBSA returned $USD 2,020 because it was shown to be from legitimate sources.  The remaining $USD 8,738.00 remained seized as forfeit. Mr. Williams filed an appeal with the Federal Court of Canada.  His lawyers filed a motion for summary judgment, which was dismissed.  Mr. Williams' lawyers appealed the dismissal of the summary judgment motion to the Federal Court of Appeal.

Justice Stratas wrote a unanimous decision on behalf of the FCA, allowed the appeal and, thereby, granted summary judgment to Mr. Williams.  How is this possible when Mr. Williams did not report currency exceeding $CDN 10,000? The answer is that FCA carefully reviewed the legislation (the Proceeds of Crime (Money Laundering) and Terrorist Financing Act) and focused on an important exception.  Based on the clear wording in the law, the FCA held that Mr. Williams was not required to reprot the currency.

It is improtant to understand the legal provisions.  Subsection 12(1) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act sets out the general rule relating to reporting of currency and provides:

"Every person or entity referred to in subsection (3) shall report to an officer, in accordance with the regulations, the importation or exportation of currency or monetary instruments of a value equal to or greater than the prescribed amount."

However, section 13 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act contains an exception and provides that:

"A person or an entity that is required to report currency or monetary instruments may, at any time before they are retained under subsection 14(1) or forfeited as a result of a contravention of subsection 12(1), decide not to proceed further with importing or exporting them."

The FCA focused on the wording and meaning of section 13.  The FCA looked at the words of section 13 and, in particular the words, "may, at any time before they are retained ... or forfeited...decide not to proceed further".  The FCA held that a traveler may, at any time before the currency is retained or forfeited communicate to the CBSA officer that they will enter Canada and this will give rise to a privacy requirement that results in the person no longer being required to report the currency.  The FCA held that "Section 13 can only mean that once a person expresses a decision not to import, that person need not report [currency] under the [Proceeds of Crime (Money Laundering) and Terrorist Financing Act]." The FCA noted that "the parties agree that to trigger section 13 a person must not only make the decision to not proceed further with the importation or exportation but must state the decision to the border services officer."  Therefore, for the exception to apply, you have to say something before the CBSA retains the currency/monetary instruments or before the currency/monetary instruments are forfeited to Canada (as a result of a seizure).

As a result, if a person tells the primary (or secondary) CBSA officer that they took a wrong turn or tells any CBSA officer that they do not wish to say the amount of currency and are willing to withdraw their request to enter Canada, they do not need to report currency and the CBSA officer cannot legally seize the currency. A traveler has the option to "opt out" of entering or exiting Canada.  A traveler may also opt out after the primary inspection and before hading the currency to the Secondary CBSA officer for counting.

Justice Stratas also recognized that the traveler is obligated to answer questions truthfully under the authority of the Customs Act and that this obligation is not affected by section 13 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act.  A CBSA officer may continue to ask questions about the currency.  The CBSA is just not authorized under the Proceeds of Crime (Money Laundering) and Terrorist Financing Act to seize the currency or financial instruments if the person failed to report the currency or financial instruments.
Most travelers who do not know about their obligation to report currency and financial instruments exceeding $CDN 10,000 also is not likely to know that they have the option to express that they will not enter or exit Canada (as the case may be) and, thereby, trigger the exception.  That being said, people say the darndest things and could trigger the exception by what they do say.

Travelers who had had their currency or financial instruments seized may be able to use this case as authority to seek a return of the seized currency/financial instruments.  If the CBSA seizes currency and financial instruments, you can seek a review of that decision within 90 days of the seizure.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
Similar Articles
Relevancy Powered by MondaqAI
 
In association with
Related Topics
 
Similar Articles
Relevancy Powered by MondaqAI
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
 
Email Address
Company Name
Password
Confirm Password
Position
Mondaq Topics -- Select your Interests
 Accounting
 Anti-trust
 Commercial
 Compliance
 Consumer
 Criminal
 Employment
 Energy
 Environment
 Family
 Finance
 Government
 Healthcare
 Immigration
 Insolvency
 Insurance
 International
 IP
 Law Performance
 Law Practice
 Litigation
 Media & IT
 Privacy
 Real Estate
 Strategy
 Tax
 Technology
 Transport
 Wealth Mgt
Regions
Africa
Asia
Asia Pacific
Australasia
Canada
Caribbean
Europe
European Union
Latin America
Middle East
U.K.
United States
Worldwide Updates
Registration (you must scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions