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BORDER SERVICES OFFICERS - Powers and duties - Seizure and forfeiture of currency - Legislation - Proceeds of Crime (Money Laundering) and Terrorist Financing Act

Wednesday, January 31, 2018 @ 6:07 AM  


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Appeal by Williams from the dismissal of his summary judgment motion in his action for the return of United States (US) currency seized from him by a border services officer. In July 2015, Williams travelled eastbound from the US to Canada on the Blue Water Bridge. At the Canada Border Services Agency reporting station, Williams told the border services officer (officer) that he made a wrong turn and did not intend to enter Canada. The officer then asked Williams standard questions, including whether or not he was in possession of currency or monetary instruments equal to or greater than $10,000.00 CAD. Williams replied, falsely, that he was not. The officer then referred Williams to secondary inspection where he acknowledged carrying approximately $6,000.00. When he was asked to produce the currency for inspection, Williams admitted that he could be in possession of more than $10,000.00, as he was holding $2,500.00 for one of his passengers. He was ultimately found to be carrying $10,758.00 USD, which was equivalent to $13,518.50 CAD at that time. When asked why he had not reported the currency, Williams stated that "he was confused when initially questioned because he had not intended to come to Canada and that he had actually forgotten that he had it in his pocket". William’s currency was seized as forfeit, purportedly under the authority of s. 18(1) of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act (Act). The Minister of Public Safety and Emergency Preparedness (Minister) later decided that $2,020.00 USD should be returned to Williams because it was proven to be legitimate in origin. Williams subsequently brought an action in the Federal Court seeking the return of the remaining $8,738.00 USD. Before the Federal Court, Williams submitted that he was not obligated to report that he was importing more than $10,000 CAD under s. 12(1) of the Act because he had already expressed his decision not to import the currency by his statement to the officer that he was accidently in Canada. He submitted that this was an expression of a decision not to enter Canada and, thus, not to import anything into Canada. He argued that s. 13 of the Act allowed him to announce this "at any time" before the currency was retained or forfeited, including before a report was made under subsection 12(1) of the Act. It followed that since he did not intend to import the money, he was not required to report it and the seizure was unlawful. In other words, the trigger for making a report under s. 12(1) of the Act, namely the importation of currency over $10,000 CAD, was not present. The Federal Court held that the obligation to report to the officer the importation of currency over $10,000 CAD in s. 12(1) of the Act was the first step in the importation of currency. The Court determined that the decision not to proceed further with importing or exporting the currency under s. 13 of the Act could only be taken after the report under s. 12(1) had been made. It was only after the report was made that a person could choose to opt out of the importation pursuant to s. 13. Accordingly, the fact that Williams did not intend to enter Canada was irrelevant to his obligation to report and to answer truthfully the questions asked by the officer under subsection 12(1) of the Act. The main issue in the appeal was whether the seizure and forfeiture of Williams’ currency was authorized by law.

HELD: Appeal allowed. The officer had no legal power under the Act to seize any of the currency and the Minister had not pointed to any other legal authority to justify the seizure. Accordingly, Williams was entitled to the return of all his currency. The appellant’s stated intention not to be in Canada triggered s. 13 of the Act. He did thus not need to make a report under s. 12(1) of the Act and did not offend s. 12(1) of the Act. The prerequisite for s. 18 of the Act, which authorized seizure only when there was a reasonable belief that a report was required and not made, was not present. The appellant’s statement that he did not intend to enter Canada was in substance a statement that he did not intend to import anything on his person into Canada. He triggered s. 13 immediately upon arrival in Canada and did not have to make a report under s. 12(1) of the Act. Accordingly, the order of the Federal Court was set aside and Williams’ motion for summary judgment was allowed.

Williams v. Canada (Minister of Public Safety and Emergency Preparedness), [2017] F.C.J. No. 1267, Federal Court of Appeal, M. Nadon, D.W. Stratas and W.W. Webb JJ.A., December 28, 2017. Digest No. TLD-January292018006