If you move cash or other "monetary instruments" across a U.S. border, you may be required to tell the U.S. Treasury.
The form used for this purpose is Form 105, the "Currency and Other Monetary Instruments Report." You must use this form to report the physical transportation of monetary instruments in an aggregate amount exceeding $10,000 at one time across a U.S. border.
It sounds simple enough if you're moving cash, but what are the other "monetary instruments" the Treasury wants to know about? Turns out, the Treasury Department responsible for Form 105, the Financial Crimes Enforcement Network (FinCEN) won't tell you!
In May 2010, an individual who wanted to know whether or not FinCEN required him to file Form 105 for the transportation of an unspecified quantity of Canadian Maple Leaf silver coins. The letter asked (1) whether Canadian Silver Maple Leaf coins are reportable on the CMIR, and (2) in case they are not, whether FinCEN requires any other report to be filed on their importation into the United States.
Sounds like a straightforward question, right? Well, FinCEN refused to answer it. Instead, in its reply nearly a year later, it stated the following:
"FinCEN will not provide case-by-case confirmation on whether an individual type of coin or paper money item constitutes 'currency' under the BSA…The term 'currency' is defined in our regulation as 'the coin and paper money of the United States or of any other country that (1) is designated as legal tender, (2) circulates, and (3) is customarily used and accepted as a medium of exchange in the country of issuance.' Coins or paper money must satisfy all three conditions to be considered ‘currency’; a failure to satisfy one prong means that the payment instrument is not ‘currency’ for CMIR purposes…When a person finds itself in the circumstances described by 31 CFR § 103.23(a) or (b) such person must use all public information at its disposal and apply the test described above to determine whether a certain payment instrument satisfies the three parts of the test and therefore constitutes 'currency' under our regulation, and is covered by the reporting requirements of the CMIR."
This is a word-for-word quote, albeit slightly rearranged. I couldn't make this up. In other words, you're supposed to figure out for yourself whether an item is reportable or not. And if you get it wrong, you can suffer:
"Civil and criminal penalties, including under certain circumstances a fine of not more than $500,000 and Imprisonment of not more than ten years, are provided for failure to file a report, filing a report containing a material omission or misstatement, or filing a false or fraudulent report. In addition, the currency or monetary instrument may be subject to seizure and forfeiture. See 31 U.S.C.5321 and 31 CFR 103.57; 31 U.S.C. 5322 and 31 CFR 103.59; 31 U.S.C. 5317 and 31 CFR 103.58, and U.S.C. 5332."
So, let's create a hypothetical scenario. You arrive at the airport with your monetary instruments, whatever they may be. Before you arrive, you contact FinCEN for assistance. They refuse to tell you whether the items are reportable or not. So you don't file Form 105. Or you file it, but you complete it improperly.
Guess what? The Feds can seize your monetary instruments, fine you, and then prosecute you criminally. Granted, this outcome probably isn't likely, but it's certainly possible.
Now, FinCEN's "test" does provide the letter-writer a likely answer in this particular situation: the coins aren't reportable as "currency." Canadian silver Maple Leaves are designated as "legal tender." But, they don't circulate and they're not customarily used and accepted as a medium of exchange in Canada. That may change once hyperinflation hits the global economy and ordinary citizens ditch fiat currencies for gold and silver, but that hasn't happened yet.
FinCEN could have, but didn't, mention that if you're exporting a "commodity" such as silver out of the United States, you need to complete another form if their value exceeds $2,500. That form is Census Bureau Form 7525-V, “Shipper’s Export Declaration.” Naturally, if you fail to complete this form, or complete it improperly, you also face fines, imprisonment, and confiscation of your "commodities." To complete this form properly, you must consult the Census Bureau’s Statistical Classification of Domestic and Foreign Commodities Exported from the United States. I'm sure you have that sitting on your bookshelf!
Of course, FinCEN's refusal to provide a straight answer to questions about Form 105 is quite deliberate. The hoped-for result is a feeling of powerlessness among anyone otherwise disposed to move currency or monetary instruments in or out of the United States. You're supposed to feel helpless, and give up any notion of diversifying your investments internationally. If you persist, and you make a mistake, welcome to "Club Fed."
Have you moved silver coins or other "monetary instruments" across a U.S. border with a value exceeding $10,000? What were your experiences? Please comment below.
Copyright (c) 2011 by Mark Nestmann
Update: Export shipments that previously required a paper Shippers Export Declaration (SED) must now be filed electronically to the Automated Export System. For more information, see http://www.aesdirect.gov/.
