Gov’t Restricts Cross-border Movement of Cash

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Bundles of US Dollars (left) and Mr. Cuffy and Mrs. Tamba.jpg

The Liberia Revenue Authority (LRA) and the Financial Intelligence Unit of Liberia (FIU), with a mandate from the government of Liberia, have disclosed that the amount of physical cash allowed in or out of Liberia by air, land, sea or other means of transport must not exceed the equivalent of US$10,000.

The measure, according to LRA and FIU officials, is in compliance with international best practice in the midst of threats of money laundering and terrorist financing.

Making the disclosure in Monrovia on April 20, 2016, the Commissioner General of the Liberia Revenue Authority, Madam Elfrieda S. Tamba, said “The regulation is in line with best international practice and is done in neighboring countries including Ivory Coast and Ghana, and it will have benefit to the economy of Liberia.”

She said although the measure exists around the world and is known to Liberia, its implementation here has not been effectively carried out, thus exposing Liberia to money laundering and tax evasion.

The LRA Commissioner General then said, “This measure is coming with sanction. The amount government has agreed to be transported to and from Liberia is US$10,000, and our customs officers will be out there to inspect those traveling in and out. You must declare the amount of money you have on you, and if it exceeds the mentioned amount, or you fail to declare what you have, we will seize all.”

Liberia uses two currencies to transact business; the Liberian dollar and the United States dollar.

Madam Tamba said the limit is set in US Dollars because it is easy to regulate the policy in one currency, usually a stronger one.

“The use of one currency as it is with the US dollar under this regulation is important because it makes it easy for implementers of the regulation to do their work. Also another significant benefit of the currency control is that it will prevent tax evasion and money laundering that can influence terrorist activities,” she added.

She said the LRA’s role in the regulation is to get its staff to enforce it to the letter, and to make the necessary reports as required by the West Africa anti-money laundry group, the Inter-Governmental Action Group Against Money Laundering (GIABA), and extended stakeholders.

In this regard, Mrs. Tamba indicated that her staff and those of collaborating institutions, including the security sector, are undergoing training to prepare them for the task, noting that they will install scanners and CCTVs at strategic entry points to ensure the implementation of the regulation.

Speaking on behalf of the Financial Intelligence Unit (FIU), its Director and Chief Executive Officer, Alex Cuffy, said the new regulation is about working with other partners to tackle money laundering and terrorist financing.

Mr. Cuffy said although the regulation has existed in Liberia and is global, not much was known about it. According to him, the modified version is detailed and contains sanctions for which violators would be panelized.

He added that in a weak country like Liberia, where the illicit flow of money, including “capital flight” is prevalent, the regulation will act as deterrence, noting that those in government who desire to travel with money to other countries are treated under what he termed as “politically exposed persons.”

Under this condition, Mr. Cuffy said, “while a politically exposed person may be in top government position and should be given some level of due diligence, it does not mean he/she can just go ahead to take US$20,000 and transfer it through the bank or take it with him/her abroad.

There are ways we ask and treat the person to establish a clear piece of information about that person.”

Mr. Cuffy did not say much about surrounding countries’ approach to this global regulation; however, he clarified that the rule is applicable to them, adding, “when Liberians travel out they encounter it.”

Meanwhile, a document on the regulation indicated: “The regulation aims to, among others, detect the physical cross-border transportation of currency that are and bearer negotiable instruments; stop or restrain currency and bearer negotiable instruments that are suspected to be related to terrorist financing or money laundering; stop or restrain currency or bearer negotiable instruments that are falsely declared or disclosed; apply appropriate sanctions for making a false declaration or disclosure, and enable confiscation of currency or bearer negotiable instruments that are related to terrorist financing or money laundering.”

According to the document, the mandate authorizing the LRA and FIU to enforce the regulation was given by President Sirleaf, consistent with the Financial Action Task Force’s (FATF) Recommendation 32.

The revised regulation named, “Regulation Dealing with Cross-Border Transportation of Currency and Bearer Negotiable Instruments,” states amongst other things that its purpose is to implement Liberian laws and international obligations pertaining to Anti-Money Laundering/Combating Financing of Terrorism (AML/CFT), and to mitigate risks of cross-border transportation of proceeds of crime in the form of physical currencies and bearer negotiable instruments.

Section 1.3.1 to 1.3.3 of the regulation also states, “All persons entering or exiting Liberia by land, sea or air; all persons, businesses, corporations or other entities mailing or causing to be mailed such instruments into or out of Liberia, whether such persons are acting in their individual capacity, on behalf of corporations, other legal entities, other natural persons or as agents for commercial couriers, unless otherwise established, all persons acting on behalf of commercial couriers or other legal persons must know the content of parcels and cargoes in their legal custody and are accordingly required to make such disclosures as required under this regulation.”

In addition to seizure of undeclared amounts mentioned earlier by the LRA Commissioner General, the regulation also notes that “Bearer (s) of currency or instruments who fail to declare, for any reason whatsoever, shall be subject to a fine of one-third (or 33.3%) of the full amount of the undeclared currency or instruments to be imposed and collected by LRA Officers.”

It also states in 3.2.2 that “bearer (s) of instruments who are subject to a fine may be refunded the balance two-third (or 66.7%) of the undeclared currency or instruments provided the person(s) sufficiently demonstrates to LRA Officers that such undeclared currency or instruments were obtained through legitimate means. Proof of legitimacy may include, but not be limited to, bank account and documentary sources of funds in the bank. Also, specifically to the transaction, proof of employment or ownership of or shareholdings in a registered business enterprise and the disposable funds arising therefrom, documentary evidence of sources derived from legitimate entrepreneurial activities or any other legitimate source,” are required.

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