Declaration of cash

Author: | Published: 1 Dec 2005
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Valters Gencs

Address

Riga

Telephone

+371 7240090

Fax

+371 7240091

The Parliament of Latvia recently passed a new law: On the declaration of cash on the state border. The new law will enter into force on July 1 2006.

The general aim of the law is to prevent money laundering as required by the UN Convention Against Transnational Organized Crime and EU draft regulation on the control of cash leaving and entering the European Community.

Thresholds

A person should declare cash when crossing the border if it is equivalent to €10,000 or more. The following financial means are considered as the cash: (i) banknotes and coins, (ii) cheques, promissory notes, money orders and other negotiable instruments either in bearer form or in the form that title on the instrument passes upon delivery; and (iii) incomplete instruments (including cheques, promissory notes, money orders) signed but with the payee's name omitted.

Procedures

The government will shortly give details on specific forms of declaration. The declaration requirements include information on the origin of cash, the aim of use of the cash and the receiver of cash. The Tax Authority, which is responsible for customs affairs in Latvia, will control declarations. In border crossings without customs control points, the State Border Guard is the responsible authority.

Penalties

Draft amendments in the Administrative Violations Code and Criminal Code have also been passed. The draft amendments provide that for non-declaration or false declaration of cash that has been brought into or moved out of the custom territory of the EU by crossing the border of Latvia a person can be fined up to LVL200 ($333) by the Tax Authority. If the activities have been performed repeatedly over a year, the draft provides for criminal proceedings that might result in imprisonment of up to two years or a fine of up to 100 times minimum wages (that is, LVL8,000). If it is discovered that the illegal cash was not declared or the cash has been brought into or moved out of Latvia without declaration by an organized group, the offender can be sentenced to up to five years imprisonment or fined up to 200 minimum wages (that is, LVL16,000).

International exchange of information

The Tax Authority provides the Money Laundering Prevention Service with the information included in the declarations. The Money Laundering Prevention Service is entitled to submit the respective information to the competent surveillance authorities of EU member states and the UN Convention.

The law provides a useful tool in preventing and limiting international money laundering schemes from operating through Latvia.