Many people deal or otherwise conduct business in cash. This is more frequently the case where business dealings are carried out abroad.
People may therefore, to ease their transactions, carry cash when travelling abroad. This is not illegal, and there is no strict requirement to declare large amounts of cash when travelling within Europe.
However, it will be unsurprising that the authorities have a heightened sensitivity to the potential derivation of cash from criminality or its use to fund criminal conduct, and the risk of cash forfeiture is there.
Chapter 3 of part 5 of the Proceeds of Crime Act 2002 provides for ‘recovery of cash in summary proceedings’, by which “a customs officer, a constable or an accredited financial investigator may seize cash if he has reasonable grounds for suspecting that it is… recoverable property [derived from criminal conduct], or intended by any person for use in unlawful conduct.”
Matters which may cause or increase an officer’s ‘suspicion’ and lead to seizure of cash include concealing the cash, the amount of cash (if large), any weak reasons for not using the banking system to transfer the money, any lack of cogency of the explanation provided at the time, and most importantly what documentary evidence is carried with the cash to show its provenance and intended purpose.
Following seizure, the seized cash may be initially detained for up to 48 hours after which detention may be authorised by a Magistrates’ Court for a period of no more than 3 months while its origin is investigated or consideration is given to bringing (in the United Kingdom or elsewhere) proceedings against any person for an offence with which the cash is connected. That period can be subsequently extended by further application to the Court for no more than 3 months at a time up to a maximum of 2 years from the date of the first order. Within 2 years, any application for forfeiture must be brought.
By way of case study, in early 2016, Mr. A (a respectable businessman with no previous convictions or cautions) was on his way to Italy where his family lived and where he had legitimate business interests. Whilst in Italy, he was due to undertake some transactions related to his business. Perhaps unusually by reference to common British business dealings but not in the region of Italy he was visiting, the transactions were to be carried out in cash. Having previously had money stolen from him in an inattentive moment by (most likely) another passenger, Mr. A decided to conceal the cash he was carrying in confectionary containers. It is noteworthy that the concealment could only ever have been effective against a fellow passenger and not against the authorities as the cash would be obvious and visible to the authorities – as it was here and for which reason he was stopped. The money was seized from him. What then followed was litigation over a period of some 15 months which ultimately resulted in him having the money returned.
This case was very important to Mr. A. Obviously, he stood to lose the cash concerned. However, more significantly (and a matter often overlooked), was the reputational damage which would flow from a forfeiture order, and consequential damage to business interests.
It is important to consider the nature and consequence of the proceedings and the operative legal provisions. Cash forfeiture applications are not criminal proceedings, but nor are they pure civil proceedings in that although the civil jurisdiction of the Magistrates Court (and on appeal the Crown Court) is engaged and the Civil Evidence Act applies, the Civil Procedure Rules do not. As a consequence, the rules in the CPR relating to evidence, disclosure and – importantly – costs, do not apply.
It can easily cost as much or more than the money in question to recover the cash. Importantly, and in contrast to civil proceedings generally, costs do not follow the event. Costs may be granted by the Crown Court pursuant to Rule 12 of the Crown Court Rules 1982. In R. (on the application of Perinpanathan) v City of Westminster Magistrates' Court  1 WLR 1508, the Court held that the Court does have jurisdiction to make a costs order only where the Respondent has acted unreasonably and/or on grounds which are not sound. The starting point, is therefore that a party who successful resists a forfeiture application will not get their costs. It may cost more money to secure return the cash, than the amount of cash itself.
Most importantly are the allegations necessarily made within the applicant’s case. To succeed, the applicant must prove to the civil standard that the cash recoverable property [derived from criminal conduct], or intended by any person for use in unlawful conduct.
The ramifications of such a finding, albeit to the civil standard, is that the individual carrying the money to connected to criminality. This obviously impacts on that individual’s reputation. That individual would essentially be accused of criminality without criminal trial protections.
Further, that individual may hold an important role or may have been travelling on behalf of a company which may only trade by reason of a licence. That licence may be affected by the connection with the criminal nature of the cash – according to the finding of the Court.
Help and advice
By way of advice, we suggest first, that proper and contemporaneous business records are kept for cash transactions in a cash account and accountants kept informed of the level of cash business. Individuals should only travel with large amounts of cash where there is a real need to do so. Otherwise, use the banking system where possible. Where it is necessary to carry cash, try where possible to make arrangements at the destination before travelling so that you are expected (thereby being able to confirm what your intentions are). Do carry with you as much documentary support for the origin of the cash as you can (i.e. a bank withdrawal receipt). Consider the nature of how that money is being carried, do not conceal it from the authorities, a course which would create a high hurdle of suspicion to overcome if stopped.
If the authorities do seize cash, engage early with as much documentary support as possible. If any issue arises as to record keeping and accounting regularity, engage a forensic accountant promptly to analyze any business record and model.