US Customs Currency Seizures at Port of Entries
Oct. 27, 2012
The US Customs and Border Protection (USCBP) is a Federal Agency which falls under the auspices of the Department of Homeland Security, which mans the land, sea and airports throughout the country for people and goods across our borders. Their job and mission is multi-faceted but for the purposes of this article, we will only focus on their FPFD-(Fines, Penalties and Forfeiture Department). This is the Department that a traveller or their counsel on their behalf will inevitably have to deal with when their funds were seized and confiscated for failure to follow the currency reporting requirements by duly filling out USCBP Form FINCEN 105 either prior to departure from the U.S. or upon entry into the US at any port of entry when an individual is carrying $10,000 or more in US currency or its foreign equivalent in funds or instruments.
Many people are under the false impression that an individual may not carry any amount of currency in or out of the country in the aggregate amount of $10,000 or more in cash or any other legal tender such as a cashier’s check, or other legal instrument with a facial value of $10,000 or more. This is not true. Any amount may be exported or imported as long as the reporting requirements are adhered to pursuant to a law called the “Currency and Foreign Transaction Reporting Act.”
Many weary international travellers, especially the one’s returning from a long haul overseas trip, are exhausted and jetlagged from a long journey and when verbally asked by a USCBP Officer at a port of entry “Are you carrying $10,000 or more in currency on you?” The gut reaction of many people especially international visitors is, oh oh, I’m in trouble and if I admit to carrying funds in this large amount, I’ll get in trouble, and they’re going to confiscate my money.”
Instead, the seizure and confiscation does not occur due to carrying large amounts of cash on you, but conversely for failure to report and disclose the funds in question. If more than one individual is travelling as a family, say four (4) people, father, mother and two (2) children, then the aggregate amount still remains $10,000 not four (4) times $10,000. But as long as reported, any amount above $10,000 is perfectly legal to be imported and exported.
The key mistake is the travellers failure to properly report or simply come clean when questioned by the officer which can be a very costly endeavor and will result in the issuance of a Formal Seizure Notice of the funds in question, which can be a devastating and traumatic experience for the traveller. CBP will as a matter of discretion release a very small amount of the funds for humanitarian reasons to the traveller(s) but nevertheless, the bulk of the funds are seized and a signed inventory will be issued to the owner(s) of the funds with instructions on the timeline and procudures to contest the seizure.
So, now what? Is the money lost forever? Typically not, BUT, one has to go through an informal thirty (30) administrative process from the time of seizure unless an extention is requested in writing by the individual or their counsel, which is as a matter of discretion, more often than not granted by the officer. In the alternative, one can also opt for a more official legal process in federal court. The administrative process though notwithstanding is clearly the more expedient and informal avenue to utilize and often the preffered option in my opinion. Nevertheless, each case is different though and must be evaluated on a case by case basis contingent on the surrounding circumstances as to which election of proceedings is best for each case and individual.
My experience as counsel for client’s whose funds have been seized over the last 10 years, is that CBP is by and large very reasonable in their interaction with counsel or individuals post seizure and in all fairness will earnestly try to prudently work with the individual(s) or their counsel to utlimately refund the bulk of the funds based on the merits of the case, facts and circumstances.
A Petition for Remission of Forfeiture in accordance with 19 U.S.C. §1618 and 19 C.F.R. §171 ultimately most of the time will end up in what is called an Offer in Compromise in accordance with 19 U.S.C. §1617 and 19 C.F.R. §161.5 and 171.31 amd often times will result in a 10% fine of the aggregate of the funds seized as a punishment for lawfully failing to declare and report the funds as mandated by the “Currency and Foreign Transaction Reporting Act” supra but of course this is only a rule of thumb not a guarantee. If it turns out that the source of funds cannot be documented in addition to other factors such as the contriteness of the individual(s) and the facts and circumstances of failure to report may very well result in the total escheating of the funds to the U.S. Treasury.
It is therefore imperative that travellers either carefully read the currency reporting notices and warnings prior to departure or upon arrival, and be honest, up front and truthfull when questioned by a CBP Officer, and in case of forfeiture and seizure, promptly hire competent and experience counsel who can diligently represent one’s interest in front of the federal agency and ensure that due process is observed and hopefully the bulk of one’s funds are refunded minus penalties, expenses and attorney’s fees.
Best advice, is to follow the law, REPORT, ask for form FINCEN 105, or else it will be an expensive mistake.