Topics Covered Hide
- Understanding Civil Forfeiture
- Why is Cash Going Out of Trend?
- Role of Government In War On Cash
- Limit On Carrying Cash
- Other Assets You Need to Declare
- Global Currency Reporting Requirements and Measures
- Limits of Cash Deposits and Civil Forfeiture
- How to Avoid Forfeiture?
- Frequently Asked Questions
- Final Words
In some Asian countries like Hong Kong and China, it's a tradition to gift cash on rituals and occasions. Therefore, having large volumes of cash in these countries is not illegal and is a common practice among these people. However, most western countries require you to fill out forms and declare your holdings in cash to authorities. In some countries, customs departments also decide citizens' maximum cash holding limit.
Such constant control from authorities on cash movement in a country has created a war-like situation. These central financial authorities, customs, IRS, banks, and credit companies are against those who support and use cash. What do these free citizens want from their cash?
They want the freedom to carry and use as much cash as they wish.
The ultimate truth about cash is that out of all the developed countries in the world, only USA, Canada and Australia still deal in significant volumes of cash transactions. Therefore, for the USD to retain the dominant spot as a global currency, it needs to step out of this image.
The current demand of this world is to take necessary steps toward building a next-generation global payment system that is secure, private, and fast enough to operate efficiently, even on a large scale.
Many people, like small business owners, prefer making transactions in cash to avoid paying transaction charges. Therefore, if you are someone who prefers cash holdings, you need to find ways to avoid civil forfeiture.
Understanding Civil ForfeitureCivil Forfeiture is one of the government's most important and powerful tools. This is a process through which law enforcement officers seize property they believe is involved in criminal activity, regardless of whether this is true. It is also a process by which property can be seized without due process and without ever being charged with a crime.
The process of civil forfeiture has become one of the most abused laws in America, even though it is supposed to help fight against crime. The government can seize any property, no matter how small it is and how much money it contains.
When a person's property is seized, their life changes completely, and they have no say over what happens next. While this measure was taken to prevent criminal activities, now assets of even innocent people are seized anyway. The strategic play of the government behind civil forfeiture is to establish control over the flow of financial assets.
Why is Cash Going Out of Trend?Digital money and pay cards have significantly impacted the use of cash. Things have changed drastically over the last few years, and cash is becoming more "out of trend" than in the past decade. With emerging technologies, digital currencies like Bitcoin are ruling the roost for secure transactions. The idea of using a bank account for your transactions is becoming more efficient day by day. We observe that most businesses and merchants prefer to deal with credit/debit cards for their day-to-day operations.
Card-based payments have reached a global reach, and you can now buy anything from an SUV to a hot dog using a credit card. However, the trend of using a credit card has gone so far that many businesses have turned down taking cash for their services. Therefore, these records of credit card payments also work as a database to target specific users for marketing.
Credit card companies are doing their best to create a safer and easier payment system that can be used easily by any other party in any part of the world. Government and authorities support this war on cash as a measure to prevent criminal and illegal activities. However, this logic is not smart enough, as criminals have now become interested in digital money and cryptocurrencies.
Role of Government In War On CashThe government exerts control by limiting the usage of cash. First, they started this war in the USA, then expanded it to Canada and Australia, and now they are working towards doing the same thing in Asian countries like China. The problem is that government can exercise power over us only up to a certain level. However, when people are not educated about using digital money, criminals will exploit these loopholes to expand their operations, further risking life and liberty of people.
The government wants a global reach for its plan but is facing stiff resistance from people who want to hold cash for safety reasons. The government tries to hide the reality that cash is not safe, but it also knows that people will come up with a solution of their own if they are not given a chance. Most central authorities and governments have the same approach towards cash as it slows down their experiments. Earlier, banks offered interests on savings which is now replaced by a zero-interest system. Since banks have stopped paying interest, the number of people making deposits in these banks has also significantly reduced. This is exactly what government, banks, and authorities want from citizens.
Limit On Carrying CashIn this digital world, almost every country is looking for possible ways to minimize the use of cash for making transactions. This is why you will find that almost every country has set a limit on carrying cash in and out of the country. However, this number (limit) varies across different countries, but one thing is said for sure, governments are establishing more control by controlling cash flow.
There are certain provisions related to carrying cash, and if you do not abide by them, your assets will be confiscated by the customs or authorities. Like other countries, authorities in the USA are also putting a lot of pressure on people to limit cash usage. While IRS and customs are always on the watch against cash flow in large amounts, there is no limit on carrying cash with you. However, all you have to do is declare it and follow proper protocol.
There's a limit on the amount of cash you can withdraw from banks in your account. Once you cross that limit, the bank tells you you will need to make an appointment with them if you want to withdraw more money. The limit on carrying cash internationally varies across different countries and their customs. However, commonly this limit is set at $10,000 which the United States sets.
In most European countries, you can carry under 10,000 Euros without trouble. In addition to this, you have to undergo custom checks and fill out cash declaration forms before leaving the country. However, all these measures and rules to control cash are not working as there is no feasible way that people can understand how they can get tracked by their government. Due to said limits on cash, people carry cards and digital money to meet their needs.
Other Assets You Need to DeclareApart from cash, you also have to declare another form of currency and assets that you are carrying in your luggage. From coins, bills, and foreign currencies to bonds, money orders, stocks, precious metals, and even traveler's checks, you must declare everything at a customs check. The amount of money you declare can hit your bank balance, and you need to be prepared for it. Here's a list of items and assets you need to declare at a customs check while leaving a country:
- Stocks & Bonds - Those who have stocks need to declare the value and amount of your statement. They also need to disclose the amount you deposited in your bank. StocThis is because stocks are considered an indirect form of assets, and you need to declare them too.
- Gold & Silver - Those who are carrying gold or silver need to declare the value and quantity and state how many years they have been keeping them as an investment. Precious metals and diamonds are considered under strict regulations, and you must declare every piece.
- Travelers Cheques - You need to declare if you have kept them for more than 90 days and also state how many cheques you kept with you then. Also, if you have any money orders, they must be accounted for.
- Foreign Currency - You need to declare the amount you are carrying and show proof of ownership if you have kept it for a longer period. Like other currencies, US states want to know the amount of cash you carry with you and its denomination.
- Cash - You need to declare the amount of cash you have. If it is under the said limit ($10,000), then you can easily carry it by filling out a cash declaration form.
Global Currency Reporting Requirements and MeasuresWhen you move from one place to another, you must report how much currency you carry with you in different forms. While some countries have regulations regarding currency reporting, others have comparatively easy rules about carrying cash. Take a look at this list to get a better idea about currency reporting requirements and measures of different countries:
- Australia: People traveling with less than 10,000 Australian Dollars in cash can easily move in or out of the country. However, if you wish to carry more, you must fill out a separate cash declaration form before making your journey. You will face the customs department while leaving the airport.
- China: China has some strict regulations on cash. While leaving the country, you need to fill out a separate form if you plan to carry more than US$5,000 OR RMB 20,000 in cash with yourself. The customs go through a series of checks and verification processes before letting you go through immigration.
- The European Union: You must declare any amount of cash over EUR 10,000. Customs is generally strict about this, and you must fill out a separate declaration form for every box of cash you have.
- Hong Kong: There's no limit on cash you carry, but you must go through a period of questioning. They want to know if you are carrying more than HK$400,000 in cash with yourself and if yes, your items will be frozen and sent for further inspection.
- Indonesia: If you are leaving the country with more than IDR 25 Million (US$2,000), then it is required that you fill out a form and declare it to the customs department at any airport or seaport before leaving the country.
- United Kingdom: If you carry more than GBP10,000 in cash, you will be asked to fill out a form and declare it to the authorities. If you have other valuables like gold, they will be frozen.
- Russia: Russia requires that you declare all your money, and if you carry more than 100,000 Roubles or USD 5000 in cash, then it needs to be declared at customs, too, along with the original receipts for cashing the same amount of currency or money order.
- United States: Those who earn less than USD$5,500 per year will not be allowed to take more than USD$10,000 in cash from any country. Anyone with more money than this needs to file Form FinCEN 105 to account for the cash they are carrying. If you are traveling with your family, every member needs to report individually.
- Switzerland: You must file a separate form every time you carry more than CHF10,000. The authorities, especially in Swiss airports and seaports, will examine every item of cash you are carrying. If they find it above the requirement, they will freeze it and send it for further investigation.
- Canada: Those who wish to take more than CAD 10,000 in cash with themselves need to declare this amount individually. You can also declare any amount of money equivalent to CAD 14,500 per year or about USD$9,375 at a time.
- India: If you have more than $5,000 and $10,000, then you need to fill out a separate declaration form for every box of cash. You will also be asked about how much money you carry with you and from where. If you are not an Indian citizen, then you have to follow proper guidelines.
- Japan: If you are leaving the country with more than JPY 100,000 in cash, then it is required that the authorities look into your bank statements and statements for the purpose of cross-checking your income and expenses.
- Various countries have put strict regulations about carrying more cash with yourself. For example, some set a limit on the amount of cash that can be carried by an individual, while others have made it applicable only if your income is below a certain price point.
Limits of Cash Deposits and Civil ForfeitureEvery country has its limits on how much cash one can deposit. Some of these limits are seriously high, and some are very less. The United States, Canada, Philippines, and Germany, to name a few countries, have set very high limits over what is needed to be included as cash deposits. If you are not following the limits of cash deposits, then there are high chances that the authorities will confiscate your assets. This means it's never easy to run a business in the US that handles large amounts of cash.
In addition, banks in the US are bound to report if any person is making frequent large deposits either near or over the $10,000 mark. However, suppose you find yourself stuck in such a situation. In that case, it is always a good idea to consult about the regulations followed by your country and also help yourself by getting in touch with the relevant law enforcement agency. In simple terms, if a bank account is used for money laundering purposes, then a government official will seize the remaining funds at any time after logging into the account.
How to Avoid Forfeiture?Firstly, you need to understand civil forfeiture. Civil forfeiture is a government procedure where government authorities can seize assets based on seizure warrants issued by a judge, and no trial is required in most cases. These warrants are issued when the assets have allegedly been involved in criminal activity like drug trafficking, money laundering, or terrorist financing (etc.). The seizure procedures in these cases are quite complex and not easy to figure out.
A lot of legal jargon is used to explain how it works and the procedures a judge follows. First, many court cases are filed against individuals and companies to challenge the process. Secondly, your bank must report any suspicious activities if your country has signed an agreement with any other country on mutual assistance or information sharing. Finally, the banks are bound by rules and regulations the government sets.
Banks have already reported that people have large amounts of cash with themselves and are suspected of money laundering or terrorist financing activities. In such a situation, your assets could be seized or frozen at any time from the date of the filing in court till you clear the charges and prove your innocence.
Frequently Asked Questions• What can be done to avoid the seizure of my assets by the government?
It's best to let the relevant authorities know about your plans beforehand and also tell them why you are carrying so much cash with you. In some countries, you can also apply for advance clearance if you have planned to carry large amounts of cash.
• How much gold can you carry in or out of the United States?
If you are carrying gold while traveling in or out of the United States, you must also mention them in FinCEN 105 form. All in all, the value of the gold you are carrying must not exceed $10,000 in value. If a person carries gold bullion or coins in any form, it will be counted as money and taxed accordingly.
• What happens if I am caught with too much cash?
Initially, authorities will question you about your background, business, and where you got all that money from. Next, the authorities will verify if you are using someone else's cheques and for what purpose. If your word about the source of the money does not match with what bank statements show, you could face serious consequences.
• What happens if I deposit money in a foreign bank?
Some countries have been known to levy tax on deposits made by people from other countries in their banks for a certain period. Foreign currency reserves held by banks need to be reported to government authorities. Such things could be subject to tax even though it is outside their jurisdiction, and they don't have the right to earn interest on these assets.