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
 
In association with
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
Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:
  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.
  • Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.
    If you do not want us to provide your name and email address you may opt out by clicking here
    If you do not wish to receive any future announcements of products and services offered by Mondaq you may opt out by clicking here

    Terms & Conditions and Privacy Statement

    Mondaq.com (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

    Use of www.mondaq.com

    You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). 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 & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about Mondaq.com’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.

    Disclaimer

    Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd 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 or performance of information available from this server.

    The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.

    Registration

    Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

    • To allow you to personalize the Mondaq websites you are visiting.
    • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
    • To produce demographic feedback for our information providers who provide information free for your use.

    Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

    Information Collection and Use

    We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

    We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to unsubscribe@mondaq.com with “no disclosure” in the subject heading

    Mondaq News Alerts

    In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.

    Cookies

    A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

    Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

    Log Files

    We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.

    Links

    This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

    Surveys & Contests

    From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.

    Mail-A-Friend

    If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.

    Emails

    From time to time Mondaq may send you emails promoting Mondaq services including new services. You may opt out of receiving such emails by clicking below.

    *** If you do not wish to receive any future announcements of services offered by Mondaq you may opt out by clicking here .

    Security

    This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to webmaster@mondaq.com.

    Correcting/Updating Personal Information

    If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to EditorialAdvisor@mondaq.com.

    Notification of Changes

    If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

    How to contact Mondaq

    You can contact us with comments or queries at enquiries@mondaq.com.

    If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at problems@mondaq.com and we will use commercially reasonable efforts to determine and correct the problem promptly.

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