Travellers from and to any country of the European Union (EU) possessing cash of the value of €10,000 and more, have to make a declaration under a new regulation aimed at combating money laundering and terrorism financing. This preventive measure, besides a host of new criminal laws to counter illicit funnelling of the proceeds from drug-related offences and serious crime, has assumed a greater significance in the post-9/11 global scenario for free movement of capital and financial services, the bedrock of the EU’s integrated single market. A 2005 directive defines money laundering as the conversion or transfer of property derived from criminal activity, its concealment to disguise its illicit origin, and assistance to those who seek to evade justice. While the 1991 directive focussed only on drug-related offences, it was later amended to include laundering of the proceeds of serious crime and fraud. Similarly, its coverage, originally limited to the financial sector, was expanded to cover a wide variety of non-financial activities and professions. Under the new regime, in place since June 15, the onus to declare rests with the traveller, regardless of whether he is the owner of the cash (currency notes, coins, and negotiable instruments), and the enforcement of penalties is left to be determined by individual states. The possession of sums below the €10,000-threshold-value attracts confiscation if there is indication of illegal links involving the movement of cash.
The obligation to declare currency was first mooted by the world’s leading standard-setting body on money laundering — the 33-strong inter-governmental Financial Action Task Force (FATF), set up at the 1989 Paris summit of the Group of Seven countries. Although only 15 constituent states of the EU are members of the FATF, the European Commission, as an organisational member, is expected to implement the anti-money-laundering and counter-terrorism financing measures across the entire EU. This role gains importance in view of the relatively high prevalence of fraud, corruption, and hard crime in many of the eastern European states. Accession to the EU has contributed to impressive gains in relation to the consolidation of democratic rule of law, transparency of economic and political institutions, good governance, and human rights in countries of southern Europe. There is every reason to believe that the relatively new EU member-states from eastern Europe are better placed to achieve similar progress in the years to come.