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Asian Tribune is published by E-LANKA MEDIA(PVT)Ltd. Vol. 20 No. 105

Customs: Commission welcomes approval of new cash controls to combat money laundering

By Sunil C. Perera

Colombo, 15 June 2007, (Asian The European Commission has welcomed the European Parliament's approval on 8 June under the co-decision procedure of a Regulation to introduce an EU-wide approach to controlling cash movements into and out of the EU.

The Regulation, which is based on a Commission proposal of June 2002 will require Member States to ensure that travellers entering or leaving the EU through its external borders make a declaration if they are carrying more than €10,000 (or its equivalent in other currencies or easily convertible assets). The Regulation will enter into force once the Council confirms its formal agreement to amendments proposed by the Parliament and the residents of the Council and Parliament sign the text. It will take effect 18 months after its entry into force.

"This measure will make it more difficult for terrorists to enter or leave the Community with the cash required to finance their illegal actions" said Taxation and Customs Commissioner László Kovács.

"A single uncomplicated system of this type will also be fairer to legitimate travellers who will no longer be faced with control measures that vary depending on where they enter or leave the Community" The Regulation will provide for a Community-wide approach to controlling cash movements into or out of the Community.

It will oblige travellers entering or leaving the Community and carrying more than €10,000 (or its equivalent in other currencies or easily convertible assets such as cheques drawn on a third party) to make a declaration to the customs authorities. The €10,000 threshold is high enough to save the majority of travellers and traders from disproportionate administrative formalities.

Customs authorities will be empowered under the Regulation to undertake controls on people and their baggage and detain cash that has not been declared.

Member States will be required to initiate proceedings against people who fail to declare cash over €10,000. Member States will have to ensure that the penalties resulting from such proceedings are proportionate to the offence, so as to have a deterrent effect.

Member States must record information obtained through declaration or through control and make it available to the authorities competent for money laundering.

Where there is evidence that cash is being carried for the purpose of money laundering or terrorist financing, Member States are obliged to exchange information.

The Commission must present an evaluation report to the European Parliament and the Council four years after the entry into force of the regulation.

The Council and Parliament's main change to the Commission's proposal was to reduce the declaration threshold to €10,000. The Commission had proposed a €15,000 threshold to complement that applied by the EU's Money Laundering Directive (91/308/EC) to transactions via financial institutions.

The Council and Parliament considered that €15,000 was too high a threshold, since cash can be moved across borders more easily than money transferred via financial institutions.

The Parliament also proposed that the Regulation should state that customs authorities must, when dealing with travellers carrying large amounts of cash, apply Community data protection measures appropriately. The Council has agreed to this modification and will confirm this formally at a forthcoming Council.

- Asian Tribune =

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