Tag: monetary instruments

Is only cash currency subject to seizure by Customs?

Posted by Jason P. Wapiennik on August 27, 2012

Sometimes the failure to file the required report with Customs leading to a currency seizure arises because there is a mistaken assumption that only currency, or only U.S. currency, needs to be reported. This is wrong.

The reporting requirement applies to all monetary instruments. This is a legal term, defined in at least two places. First, 31 USC 5312 defines them, in relevant part, as:

(A) United States coins and currency;

(B) [ . . .] coins and currency of a foreign country, travelers’ checks, bearer negotiable instruments, bearer investment securities, bearer securities, stock on which title is passed on delivery, and similar material; and

The Federal Regulations, namely 31 CFR 1010.100(dd), provides a more detailed definition
as to what is included in the definition of monetary instrument, including:

(i) Currency;

(ii) Traveler’s checks in any form;

(iii) All negotiable instruments (including personal checks, business checks, official bank checks, cashier’s checks, third-party checks, promissory notes (as that term is defined in the Uniform Commercial Code), and money orders) that are either in bearer form, endorsed without restriction, made out to a fictitious payee (for the purposes of §1010.340), or otherwise in such form that title thereto passes upon delivery;

(iv) Incomplete instruments (including personal checks, business checks, official bank checks, cashier’s checks, third-party checks, promissory notes (as that term is defined in the Uniform Commercial Code), and money orders) signed but with the payee’s name omitted; and

(v) Securities or stock in bearer form or otherwise in such form that title thereto passes upon delivery.

(2) Monetary instruments do not include warehouse receipts or bills of lading.

It is noteworthy that the statute says it includes the foregoing, with the implication that just because a type of monetary instrument is not listed will not, by necessity, mean that is excluded from the reporting requirement.

If you have had cash seized by customs and are contemplating what to do next, please make use of the other information available on this website or call our office at (734) 855-4999 to speak to a customs lawyer, or e-mail us through our contact page. We are able to assist with cash seized by customs around the country, including Chicago, Atlanta, New York, Los Angeles, Orlando and many other places, and not just locally in Detroit.

Please read these other articles:

Penalties for monetary reporting violations

Posted by Jason P. Wapiennik on August 21, 2012

Is it a crime to transport more than $10,000 without reporting it?

Yes, it is a crime to transport more than $10,000 without reporting it if you are entering or leaving the United States. There are both criminal and civil penalties for failing not report carrying more than $10,000, but not everyone is charged with a crime. A person can be charged criminally or just be responsible for a civil violation, as well as forfeiture of your monetary instruments.

What are the criminal penalties for not reporting more than $10,000?

The criminal penalties for not reporting more than $10,000, or omitting or misstating a material fact in a report potentially brings with it criminal penalties. That includes, depending on the severity of the violation, a fine ranging from $250,000 to $500,000 and/or prison time from 5 to 10years.

What are the civil penalties for not reporting more than $10,000?

The civil penalties for not reporting more than $10,000 is a fine of not “more than the amount of the monetary instrument for which the report was required.” Any civil penalty assessed for a violation of failing to report currency at the border is reduced by the amount of money that was forfeited (forfeiture is a permanent loss of the money to the government).

What are the penalties for structuring a transaction to avoid filing a currency report?

The penalties for structuring a transaction is avoid filing a currency report are similar. The relevant law makes it illegal, when importing or exporting more than $10,000 in monetary instruments, to:

(1) fail to file a report . . . , or cause or attempt to cause a person to fail to file such a report;
(2) file or cause or attempt to cause a person to file a report required . . . that contains a material omission or misstatement of fact; or
(3) structure or assist in structuring, or attempt to structure or assist in structuring, any importation or exportation of monetary instruments.

If structure cash in any of these ways you could be be fined and/or imprisoned for no more 5 years. There are additional, higher penalties when done as “a pattern of any illegal activity involving more than $100,000 in a 12-month period.

In addition to the criminal penalties for structuring cash there are also civil penalties. 31 USC 5321. The amount of the civil penalty will not be greater than the amount involved in the transaction, and that amount shall be reduced by the amount of any monetary instruments forfeited.

Will a civil penalty for a cash reporting violation stay on my record?

IA civil penalty for a cash reporting violation will not stay on your record for most purposes. That is, if you’re not criminally charged then the only people who will ever be able to find out this happened is the government agencies who have access to your travel record. Customs will always have a record when you cross the border that you were transporting currency and failed to file a report. This will, in all likelihood, mean that you will at some point while crossing the border be questioned about whether or not you have currency or have your baggage examined. There is nothing that can be done to avoid that, except if it becomes unfair you can file a complaint through the DHS Traveler Redress Inquiry Program (DHS TRIP).

If you are not criminally charged you will not have a criminal record.

Questions about a customs cash seizure?

If you have had cash seized by customs and are contemplating what to do next, please make use of the other information available on this website like our trusted customs money seizure legal guide (or watch the videos) and can contact us for a free currency seizure consultation by clicking the contact buttons on this page.

Under what circumstances is filing a report with Customs for transporting more than $10,000 required?

Posted by Jason P. Wapiennik on August 14, 2012 with 9 Comments

Title 31 of the U.S. Code, § 5316, is the law requiring that a report be filed when leaving or departing the U.S. for a (1) knowing (2) transportation (in the past, present or future) of (3) monetary instruments (including currency, U.S. or foreign) (4) of more than $10,000 (5) at one time.

Each of the elements numbered 1 through 5 above have a legal definition too detailed for an article this short, but suffice it to say that the terms “knowing,” “monetary instruments,” and “one time” do not have the common, everyday definitions you might expect. If you are not a lawyer or don’t mind losing more than $10,000 do not try to be clever and figure it out.

When leaving or arriving to the U.S., how do I know if I need to file a report?

Some believe the $10,000 reporting requirement is per person, meaning that if there are two people then the reporting requirement is raised to $20,000, and $30,000 for three people, and so forth; or, they also think that if no single person has on them or in their luggage more than $10,000, there is no reporting requirement. This is usually not true.

Some particular examples

So to what scenarios does the reporting requirement apply? Let’s look at a few examples that assume a hypothetical husband and wife traveling together:

Husband is transporting $8,000 for himself, and $7,000 for his wife. Is there a reporting requirement? Yes, Husband needs to file a report because Husband is transporting more than $10,000 at one time.
Husband wants to transport $18,000. Trying to avoid filing a report, Husband gives $9,000 to Wife to transport and he transports $9,000. Is there a reporting requirement? Yes, Husband needs to file a report because, among other things, he is causing more than $10,000 to be transported at one time. It is also the crime of structuring.
Husband and Wife are each transporting $6,000 for their own account. Is there a reporting requirement? No, neither Husband nor Wife need to file a report because the money is for their own account (but see the “Cautionary Disclaimer” below).

Cautionary disclaimer

In the case of currency seizures, for whose account the money is and who is carrying it is often a difficult matter to prove. It really guts the distinctions in the first three scenarios, especially in #3. It is difficult, if not impossible, to sufficiently prove for whose account cash currency is being carried, especially between a husband and wife, or other family, and especially if transported in baggage. It’s a lot easier if you are carrying money orders or traveler’s checks made payable to either husband or wife. When in doubt, disclose everything and file a report.

If you do not file a report and you raise the suspicions of U.S. Customs, or you play fast and loose with the rules and you will get your currency or monetary instruments seized. If you have had cash seized by customs and are contemplating what to do next, please make use of the other information available on this website or call our office at (734) 855-4999 to speak to a customs lawyer, or e-mail us through our contact page. We are able to assist with cash seized by customs around the country, including Chicago, Atlanta, New York, Los Angeles, Orlando and many other places, and not just locally in Detroit.

Please read these other articles: