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

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...