SPANISH PENALTIES FOR INFRINGEMENT OF AML CASH CONTROLS ARE NOT PROPORTIONATE, SAYS THE ECJ

On 28th June, Garrigues published an article which says that Spanish law requires individuals to report the cash they take out of the country across the border. The penalties for failure to do so can be up to twice the unreported amount. According to the European Court (CJEU), the penalty is disproportionate.  The Court said that the penalties go beyond what is necessary to ensure compliance with the obligation to declare.  The article also argues that the same could apply to the penalty regime on compliance with the obligation to report assets abroad, which levies penalties up to 150% of the tax liability.  See ECJ Case C-190/17: Zheng.  In 2014, 2014, Mr Zheng, a Chinese national, checked in his luggage at the Grand Canary airport for a flight to Hong Kong, with stopovers in Madrid and Amsterdam.  A check in Madrid revealed that his luggage contained the €92,900 in cash which he had failed to declare.  All but €1,000 was seized.  An administrative fine of €91,900 on Mr Zheng after finding as aggravating circumstances the significant amount of the undeclared sum, the failure to provide proof of the lawful origin of the cash, the inconsistency of the interested party’s statements concerning his professional activity and the fact that the cash was found in a place which showed a deliberate intention to conceal it.

http://www.garrigues.com/en_GB/new/spanish-penalties-infringement-anti-money-laundering-are-not-proportionate

http://curia.europa.eu/juris/document/document.jsf?text=&docid=202406&pageIndex=0&doclang=EN&mode=lst&dir=&occ=first&part=1&cid=603117

Author: raytodd2017

Chartered Legal Executive and former senior manager with Isle of Man Customs and Excise, where I was (amongst other things) Sanctions Officer (for UN/EU sanctions), Export Licensing Officer and Manager of the Legal-Library & Collectorate Support Section

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