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Cash Seized at the Border: What to Do?!

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If a person intends to carry CAD $10,000 or more in Cash over Canada’s border (either entering or exiting Canada), the person carrying the cash must declare the amount being carried to Canadian Border Services Agency (“CBSA”). If a CBSA officer determines that a traveller is carrying undeclared cash and suspects that it may be proceeds of a crime, the CBSA may seized the cash and hold it until the matter is proven otherwise. A recent Federal Court decision in Evans v Canada (Public Safety and Emergency Preparedness), 2022 FC 1516 (“Evans”) serves notice that while there are appeal mechanisms available, it can be extremely difficult to overturn these seizures.

Background

As indicated, the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (the “PCTFA”) requires that anyone crossing the Canadian border (either entering or exiting Canada) and carrying cash or certain other monetary instruments (collectively, “Cash”) valued at CAD $10,000 or more declare this at the border to a CBSA officer: see PCTFA 12(1) and subsection 2(1) of the Cross-border Currency and Monetary Instruments Reporting Regulations.

A CBSA officer can seize cash that a traveller fails to properly declare (PCTFA 18(1)). The cash will not be returned if the officer has “reasonable grounds to suspect” it is the proceed of a crime (PCTFA 18(2)).

The Evans Decision

In the Evans case, Mr. Evans attempted to carry over $38,000 cash onto an international flight departing from Canada without declaring it, until approached by a CBSA border officer while boarding the flight. The CBSA seized the cash and held it as suspected proceeds of crime.

Mr. Evans appealed to the CBSA, claiming a misunderstanding, as he believed he would be able to report the cash on a form handed out on the plane, and that the cash was related to his construction business (and specifically an insurance payout on a stolen truck). Bank statements were provided as evidence, but were rejected by the CBSA as “insufficient”. The CBSA decided to keep the Cash (technically as forfeit) per subsection 29(1) of the PCTFA, and Evans was required to apply to the Federal Court for Judicial Review at the Court.

In the Federal Court, the CBSA’s decision was upheld as reasonable, with the Court rejecting Mr. Evans’ argument that the CBSA did not establish an illegitimate source of the cash, clarifying that the CBSA is not required to establish this. Rather, the Federal Court concluded that there was a reverse-onus in these cases, and that Mr. Evans was required to prove a legitimate source of funds in order to overturn the seizure. (Here Evans had presented banking statements showing a deposit from an insurance company and various e-transfer deposits that he claimed were related to his construction business, but the Court concluded that Evans “did not establish a link between the income in [his] bank or that received from insurance and the seized currency”, and that his evidence did not otherwise “establish the legitimate origin of the currency” (para. 35)).

The Bottom Line

While there is some good news that appeals mechanisms are available to recover cash seized at the border, navigating this system can be daunting, and an uphill battle from the get-go. When faced with a seizure of cash at the border, the first stage of the appeal, and the evidence brought to the CBSA can be critical, requiring careful preparation and (advisably) professional assistance.

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