Table of Contents:
Money laundering: prevention through customs cooperation
Outline of the Community (European Union) legislation about Money laundering: prevention through customs cooperation
Topics
These categories group together and put in context the legislative and non-legislative initiatives which deal with the same topic.
Internal market > Single market for capital
Money laundering: prevention through customs cooperation
Document or Iniciative
Regulation (EC) No 1889/2005 of the European Parliament and of the Council of 26 October 2005 on controls of cash entering or leaving the Community.
Summary
This regulation complements the provisions of Directive 91/308/EEC on prevention of the use of the financial system for the purpose of money laundering within the European Union (EU). Directive 91/308/EEC was replaced by Directive 2005/60/EC, which in particular extends the scope of the preventive measures to terrorist financing. The competent authorities * of the EU countries now have harmonised rules for the control of cash * entering or leaving the EU.
Obligation to declare
The regulation places an obligation on any natural person entering or leaving the EU and carrying cash of a value of EUR 10 000 or more to declare that sum to the competent authorities. The information provided must be correct and complete, otherwise the declaration is invalid.
The declaration is provided in writing, orally or electronically, to be determined by the EU country, and must contain information on:
- the declarant, including full name, date and place of birth and nationality;
- the owner and the amount and nature of the cash;
- the intended recipient of the cash;
- the provenance and intended use of the cash.
The information obtained, either from the declaration or as a result of controls, must be recorded and processed. It is made available to the authorities responsible for combating money laundering or terrorist financing in the EU country of entry or of exit. The information provided may be communicated to non-EU countries by the EU countries or by the Commission, subject to the consent of the competent authorities. The national and EU provisions on the transfer of personal data must be complied with.
Professional secrecy covers all information which is by nature confidential or which is provided on a confidential basis. It must not be disclosed without the express permission of the person or authority providing it. However, the competent authorities may be obliged by law to disclose this information, for instance in connection with legal proceedings. In such a case, any disclosure or communication of information must fully comply with prevailing data protection legislation.
Checking compliance with the obligation to declare
Officials of the competent authorities may check compliance with the obligation to declare by carrying out controls on natural persons. This includes controls on the natural persons themselves, their baggage and their means of transport. Such controls must comply with national legislation in this area.
In the event of failure to comply with the obligation to declare, cash may be detained by administrative decision in accordance with national legislation.
The information obtained may be made available to other EU countries, in particular where there is evidence of illegal activities. In such cases, Regulation (EC) No 515/97 on mutual assistance between the administrative authorities of the EU countries and cooperation between the latter and the Commission to ensure the correct application of the law on customs and agricultural matters applies mutatis mutandis. Where there are indications that the financial interests of the EU are adversely affected, the information will also be transmitted to the Commission.
Where it appears from the controls that a natural person is entering or leaving the EU with sums of cash lower than EUR 10 000 and where there is evidence of illegal activities associated with the movement of cash, that information may also be recorded and processed.
Penalties
By 15 June 2007, EU countries must lay down the penalties applicable in the event of failure to comply with the obligation to declare. Such penalties must be effective, proportionate and dissuasive.
| Key terms used in the act |
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References
| Act | Entry into force | Deadline for transposition in the Member States | Official Journal |
|---|---|---|---|
| Regulation (EC) No 1889/2005 |
15.12.2005 |
– |
OJ L 309 of 25.11.2005 |
Related Acts
Commission report to the European Parliament and the Council on the application of Regulation (EC) No 1889/2005 of the European Parliament and of the Council of 26 October 2005 on controls of cash entering or leaving the Community pursuant to article 10 of this Regulation [COM (2010) 429 final – Not published in the Official Journal].
This report concludes that EU countries have effectively organised competent authorities to ensure that passengers comply with their cash declaration obligation. They have also implemented a penalty system and/or cash detention system for cases of non-compliance with the cash declaration requirements. However, in a few EU countries, some shortcomings have been detected in the recording, processing and making available of control information and in the introduction of national penalties. This report notes that EU countries need to be closely monitored to enhance the harmonisation of the implementation of Regulation (EC) No 1889/2005 (the “Cash Control Regulation”).