Regulation on controls of cash entering or leaving the community

The Regulation 2005/1889/EC of 26 October 2005 on controls of cash entering or leaving the Community (hereinafter the “Regulation”) was adopted in order to supplement Directive 91/308/EEC on prevention of the use of the financial system for the purpose of money laundering. It is a system that controls cash entering or leaving the Community, while Directive 91/308/EEC should prevent money laundering by monitoring transactions through credit and financial institutions and certain types of professions.

According to this Regulation cash means (i) bearer-negotiable instruments including monetary instruments in bearer form such as travellers cheques, negotiable instruments (including cheques, promissory notes and money orders) that are either in bearer form, endorsed without restriction, made out to a fictitious payee, or otherwise in such form that the title thereto passes upon delivery and incomplete instruments (including cheques, promissory notes and money orders) that have been signed but with the payee’s name omitted; and (ii) currency (banknotes and coins that are in circulation as a medium of exchange).

Cash in the amount of EUR 10,000 or more carried by any natural person entering and leaving the Community must be declared to the competent authorities of the Member State through which the natural person is entering or leaving the Community, regardless of whether or not that person is the owner of the cash. If the declaration is incorrect or incomplete, it shall be deemed that the obligation to declare has not been fulfilled. The Member State will determine whether the declaration shall be submitted in writing, orally or electronically. The declarant is entitled to submit the declaration in writing.

If the obligation to declare cash is not fulfilled, the cash may be detained by an administrative decision. For this purposes, officials of the competent authorities are empowered to carry out inspections on natural persons, their baggage and their means of transport under national legislation. Each Member State shall introduce penalties to apply in the event of failure to comply with the obligation to declare cash.

The Regulation entered into force on 15 December 2005 and shall apply from 15 June 2007.