Section 12 of the Proceeds of Crime (Money Laundering) and Terrorist Financing Act, S.C. 2000, c. 17 (the PCMLTFA) requires an individual to report currency in excess of $10,000 being brought into or taken out of Canada. If the officer feels that there are reasonable grounds to suspect that the funds were proceeds of crime or to be used in the funding of terrorism, the funds can be seized as forfeit (pursuant to s.18(1) of the PCMLTFA).
In my client's case, he was returning to Canada accompanied by a relative and had currency in an amount in excess of $10,000. Some of these funds were in the possession of the relative. The other amounts were placed in the lining of luggage that apparently contained mixed contents of the client and his relative. The client and his relative lived in one residence and filled out one declaration card. When the currency was found after secondary examination at the Calgary International Airport, the client gave a conflicting and somewhat implausible account - that he had taken the funds with him when he had left Canada, and the funds. The officers pressed him for additional details, and not being satisfied with the (legitimate) origin of the funds, seized the curency as forfeit. In other words, the officer felt that there were reasonable grounds to suspect that the funds were proceeds of crime or funds for the use of financing terrorist activities.
The client was provided with a Notice of Seizure (which was incorrect and necessitated a second Notice of Seizure to be prepared and sent).
Had the officer felt satisfied as to the legitimate source of the funds, the officer could have returned the funds upon payment of a fine (ranging from $250 to $5000).
Pursuant to section 25 of the PCMLTFA, the client exercised his right to a Ministerial review of the officers decision. At this point, the client (through counsel) attempted to satisfy the Minister's delegate's concerns (which centred around the source and legitimacy of the funds). At this point, the client attempted to satisfy the Minister's delegate as to the source of funds, now pointing to two relatives that loaned him the funds.
Despite the client's efforts, the Minister's delegate found that there was a contravention (failure to report/s.12) pursuant to s.27.
After finding that there was a contravention, the Minister's delegate then declined to exercise his discretion to grant relief pursuant to section 29.
Notably, these two decisions are separate and entail different review mechanisms.
In my client's case, we sought judicial review of the decision under section 29. We attacked the decision which didn't reference the fact that the client and his mother travelled together and filled out one declaration card; nor did it mention that the luggage had mixed contents.
If the client's argument was accepted (that he was travelling with his mother) then the currency could be "shared" and below the reporting requirements. Further, the Minister's delegate had to issue an amended decision because the original decision had referenced an incorrect amount of the currency in question.
Section 29 reads as follows:
29. (1) If the Minister decides that subsection 12(1) was contravened, the Minister shall, subject to the terms and conditions that the Minister may determine,
(a) decide that the currency or monetary instruments or, subject to subsection (2), an amount of money equal to their value on the day the Minister of Public Works and Government Services is informed of the decision, be returned, on payment of a penalty in the prescribed amount or without penalty;
(b) decide that any penalty or portion of any penalty that was paid under subsection 18(2) be remitted; or
(c) subject to any order made under section 33 or 34, confirm that the currency or monetary instruments are forfeited to Her Majesty in right of Canada.
The Federal Court of Appeal decision in Sellathurai is instructive:
[53] The nature of the discretion to be exercised by the Minister under section 29 is whether to relieve an applicant, whose breach of section 12 he has just confirmed, from the consequences of that breach. The Minister's discretion must be exercised within the framework of the Act and the objectives which Parliament sought to achieve by that legislation. Within that framework, there may be various approaches to the exercise of the Minister's discretion but so long as the discretion is exercised reasonably, the courts will not interfere. In this case, the Minister proceeded by asking Mr. Sellathurai to demonstrate that the funds which were seized came from a legitimate source. The Minister concluded that the evidence provided by Mr. Sellathurai did not satisfy him that the funds came from a legitimate source. It was not unreasonable of the Minister, in those circumstances, to decline to exercise his discretion so as to grant relief from forfeiture.
The arguments we put before Justice Mosley, both in the written materials and in our oral argument, detailed the deficiencies and unreasonableness of the Minister's delegate's decision. Dunsmuir provides that unreasonableness is concerned with intelligibility, transparency, justification -- and of course, whether the whether the decision falls within a range of possible, acceptable outcomes which are defensible in respect of the facts and law.
In this case, there were a number of mistakes and errors -- conceded today even by counsel for the Respondent. Justice Mosley reserved his decision.
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