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The use of cash couriers is now recognised as a major method for terrorists to
move funds. To address this issue, the Financial Action Task Force (FATF)
issued Special Recommendation IX and its Interpretative Note which were
developed with the objective of preventing terrorists and other criminals from
using cash couriers to finance their activities or launder their funds.
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While the Interpretative Note is intended to further explain the obligations
set out in Special Recommendation IX, this Best Practices Paper is intended to
give additional details and guidance for jurisdictions on how to detect cash
couriers and how to implement effective measures to prevent the use of cash
couriers by terrorists and other criminals.
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Reporting by intelligence and law enforcement indicates that cash smuggling is
one of the major methods used by terrorist financiers, money launderers and
organised crime figures to move money in support of their activities. Over many
years, FATF typologies exercises have repeatedly highlighted the key role that
cash couriers often play in money laundering operations. However, in recent
years, evidence has emerged that cash couriers also play a significant role in
the international financing of terrorism.
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Cash couriers use a variety of methods to smuggle cash; however, a preferred
method is the use of commercial airlines for the following reasons: (1) the
passenger (courier) can stay close to his money during transport, (2) many
foreign destinations can be quickly reached; and (3) little preplanning is
required. Land border crossings also offer advantages to the cash courier,
including the ability to conceal the currency in the courier's vehicle. Another
leading method of cash smuggling is through the mail.
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For the purposes of Special Recommendation IX and this Best Practices Paper,
the definitions set out in the Interpretative Note to Special Recommendation IX
apply.
Thresholds in the declaration system
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In a declaration system, the obligation to make a written declaration is
triggered if the person istransporting currency or bearer negotiable
instruments of a value exceeding the pre-set threshold. While the
Interpretative Note to Special Recommendation IX prescribes a maximum threshold
of EUR/USD 15,000, it is acknowledged that many countries have decided to adopt
thresholds below this limit.
Technical capabilities
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Countries are also encouraged to develop specific technical expertise to
increase their capacity to detect cash at the borders. For example,
jurisdictions should consider developing mechanisms to detect cash within
baggage or shipments through the use of canine units that are specially trained
to sniff out currency, X-ray technology, scanners and other sophisticated
equipment. All mechanisms employed should be utilised on a risk and
intelligence led basis given the volume of cross-border movement. In line with
this, jurisdictions need to ensure that their cross-border currency reporting
systems are adequately resourced and funded.
Large Denomination Bank Notes
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Countries should give consideration to the elimination of large denomination
bank notes. These notes can be used by cash smugglers to substantially reduce
the physical size of cash shipments being transported across borders and, by
doing so, significantly complicate detection exercises.
Other forms of cash
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Countries should apply Special Recommendation IX and its Interpretative Note to
the crossborder transportation of currency and bearer negotiable instruments.
Additionally, countries are encouraged to consider applying these measures to
other forms of cash and bearer negotiable instruments that may keep the
anonymity of the bearer, payer or payee.
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In developing measures to detect the physical cross-border transportation of
currency and bearer negotiable instruments for terrorist financing or money
laundering purposes, it is critical that countries conduct interdiction
operations to disrupt this criminal activity. Countries should develop
effective and feasible procedures to detect, stop or restrain, and where
appropriate, confiscate such currency and bearer negotiable instruments.
Countries are encouraged to coordinate these operations with all relevant law
enforcement authorities1 and, when appropriate, commercial air/sea carriers.
Law enforcement authorities should contact airline personnel to discuss their
co-operation and assistance prior to commencing currency interdiction
operations. For example, airline agents should be asked to report suspicious
behaviour of passengers noted at check-in, and when necessary, be able to
co-operate with law enforcement regarding the investigation of cash courier
cases.
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Countries are encouraged to base targeting efforts upon intelligence and
analysis together with risk and threat assessments. Authorities must first
identify travel routes, flights, ships and concealment methods that are
considered high-risk because of known or possible links to terrorist financing
or other illicit finance movement. High-risk passengers should then be
identified. The use of "profiling" or targeting passengers for examination on
the basis of race, religion or ethnicity should be strictly prohibited.
Detection methods should be focused on key transit, destination and source
countries, and the authorities in these countries should co-ordinate
activities, intelligence and information on targeted carriers or individuals.
When targeting individuals, names should be checked against the various
jurisdictional and UN terrorist watch lists, as well as other law enforcement
databases according to domestic data protection laws. Access to intelligence
reports, seizure analysis and historical data, both domestically and
internationally, is essential in identifying trends used by cash couriers. This
information should be shared in a timely manner between countries.
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Countries are encouraged to establish passenger screening systems to analyse
the behaviour, appearance and communications (verbal and non-verbal) of
potential cash couriers. Authorities should take note of behaviour anomalies.
An integral part of the screening process is the conducting of interviews on
passengers who merit further examination. Authorities should develop a baseline
of questions before interviewing the subject. A list of red flag indicators to
aid in the detection of cash couriers is available to the appropriate
authorities through FATF channels. 1 In many countries, customs departments are
not considered law enforcement agencies and thus do not have the background,
training or authority to conduct enforcement operations.
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Most inspections, detections and seizures result from an initial "document
review" process. When conducting interviews, it is best practice to ensure that
an analysis of identification and travel documentation includes the following:
passport, visa, airline/cruise ticket, and declaration or suspicious disclosure
documentation.
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When targeting cash from cargo examinations, it is best practice to ensure that
some or all of the following shipping documents are made available for review:
manifest, airway bill, shipper's export declaration and invoice/packing list.
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When a false declaration or false disclosure occurs, or when there are
reasonable grounds for suspicion of money laundering or terrorist financing,
countries are encouraged to consider imposing a reverse burden of proof on the
person carrying currency or bearer negotiable instruments across borders on the
question of the legitimacy of such currency and bearer negotiable instruments.
Therefore if, under these circumstances, a person is unable to demonstrate the
legitimate origin and destination of the currency or bearer negotiable
instruments, those funds may be stopped or restrained.Countries may consider
confiscation of currency or bearer negotiable instruments without criminal
conviction in a manner consistent with FATF Recommendation
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Countries should consider establishing procedures to conduct thorough
inspections of passengers, vehicles, cargo, etc. when it is suspected that
currency and bearer negotiable instruments may be falsely declared or
undisclosed or that it may be related to terrorist financing or money
laundering. If possible, inspections should be conducted by a minimum of two
individuals. As stated earlier, the use of X-ray equipment, scanners and canine
units that are specially trained to sniff out currency should also be used to
the maximum extent possible. When suspicious currency and bearer negotiable
instruments are discovered, the baggage/cargo should be kept intact with the
currency and negotiable instruments so that photographs can be taken to
preserve evidence. Authorities should have in place appropriate systems for the
handling, storage, security and accounting for seizures of cash and bearer
negotiable instruments.
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When inspecting for currency which may be falsely declared or undisclosed, or
which may be related to terrorist financing or money laundering, it is best
practice to give particular attention to the potential use of counterfeit
currencies. The unique forensic characteristics of counterfeit currency can be
quite valuable to investigators attempting to disrupt terrorist or other
criminal networks. In some cases, counterfeiters employ either their own
smugglers or other already established smuggling networks to accomplish this
cross-border activity. Some countries have established mechanisms to detect
counterfeit currency. For example, when encountering questionable or suspicious
U.S currency, authorities should check these notes using the U.S. Secret
Service Counterfeit Note Search Website (www.usdollars.usss.gov) or the
European Central Bank website (www.eur.ecb.int/en/section/recog.html) in the
case of euro notes.
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Likewise, it is best practice to examine currency closely to determine if "chop
marks" or other external markings that could tie the currency to particular
individuals or currency traders is present. Such information also should be
shared among domestic law enforcement and with the international community, as
appropriate
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Customs authorities and other enforcement agencies are encouraged to work with
prosecutorial or judicial authorities to establish guidelines for the stopping
or restraining of currency and bearer negotiable instruments, and the arrest
and prosecution of individuals in cases involving falsely declared or disclosed
currency and bearer negotiable instruments, or where there are suspicions that
the currency or bearer negotiable instruments are related to terrorist
financing or money laundering.These guidelines should also address individuals
who fail to truthfully answer questions posed by customs officers or fail to
co-operate with the authorities in the inspection process.
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Countries are encouraged to have co-operation arrangements with other countries
which would allow for bilateral customs information exchanges between customs
and other relevant agencies on cross-border reports, the stopping or
restraining of cash and bearer negotiable instrument, and red flag indicators.
This co-operation could also extend to operations involving controlled
deliveries and other investigative techniques when unaccompanied cash and
bearer negotiable instruments are detected at the border. Countries are also
encouraged to enhance customs and border capabilities, information sharing and
passenger targeting. Increased information between domestic customs authorities
and police forces, and international police forces (such as Interpol and
Europol) is also encouraged. In cases where countries have a disclosure
obligation, systems should be in place to record information collected from
suspicious or false oral statements for international cooperation purposes.
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Countries are also encouraged to enhance domestic law enforcement co-operation
between customs, immigration and the police to respond to detections of
currency and bearer negotiable instruments, and to develop intelligence. FIUs
also have a useful role to play in the dissemination of this type of
information domestically. For instance, jurisdictions are encouraged to ensure
that false declarations / disclosures are reported or otherwise made available
by the designated competent authorities to the financial intelligence unit.
Airport security officials at an x-ray security point discovered a large amount
of currency hidden in a false-bottom briefcase. The security officials then
notified customs authorities who responded by performing a search of passengers
who were boarding the same international flight. An announcement was made prior
to the passengers boarding the flight notifying them of the requirement (in the
departure country) to declare cash. One suspect then declared cash in the
amount under the reporting requirement. While boarding the aircraft, the
suspect was stopped in the jet way and advised of the reporting requirement and
was afforded the opportunity to amend his previous declaration. After he chose
not to avail himself of that option, an inspection disclosed that the suspect
was carrying significantly more currency than he had declared. This currency
was immediately seized.
As a result of a lookout at a land border port, Country B intercepted a total
of $165,000 USD in suspected proceeds of crime. The subject of the lookout was
returning from Country A. Upon inspecting the pick up truck, officers noticed
that the airbag cover in the passenger side was loose. Officers removed the
plastic cover revealing a false compartment, which was found to be concealing
the bundles of currency. In addition, the passenger of the vehicle was carrying
a large quantity of currency on her person.
Law enforcement authorities in Country C initiated an investigation based on
two bulk currency seizures over USD 200,000 discovered in express outbound
courier shipments intended for a particular business in Country X. This
currency was destined for a country of concern. The business and its owner
located in Country X were ultimately identified as members of a known and
designated Middle Eastern terrorist organisation.
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