FINANCE LAW UPDATE: CURBING MONEY LAUNDERING IN TANZANIA: A QUICK LOOK INTO THE ANTI-MONEY LAUNDERING (CROSS-BORDER DECLARATION OF CURRENCY AND BEARING NEGOTIABLE INSTRUMENTS) REGULATIONS, 2016

1.0  Introduction

It is very normal for someone traveling in or out of the country to carry some form of money with them for their use. But did you know that there is a law, which governs threshold of money (be it currency or bearing negotiable instrument) one must declare when  entering or departing from the borders of the United Republic of Tanzania?

The Anti-Money Laundering (Cross-Border Declaration of Currency and Bearing Negotiable Instruments) Regulations of 2016, G.N. No 286 (herein referred to as the AML Regulation, 2016), provides a guideline on how much currency and/or bearing negotiable instruments (herein referred as BNI) one ought to declare before departing or entering the borders of Tanzania. This law also provides for the process involved when declaring the said currency or BNI as well the consequences of failing to declare or falsely declaring any amount.

Our Finance and Regulatory Compliance Department based on recent events on multiple arrests on traversing of this Regulation, deemed it necessary to summarise the key contents of the AML Regulations, 2016 that has been made under the Anti-Money Laundering Act, CAP 423.

2.0 What amounts to currency and bearing negotiable instruments

As defined under Regulation 3 of the AML Regulations, 2016 “currency” means a coin or printed money; local or foreign that is designated as legal tender and circulates as, and is customarily used and accepted as, a medium of exchange in the country of issue.

Furthermore, the said provision also defines the “bearing negotiable instruments” as instruments in bearer form the delivery of which, with or without endorsement and includes:-

1. Passes title
2. Bank drafts
3. Promissory notes
4. Cheques
5. Money orders
6. Traveler’s cheques
7. Bearer ponds
8. Postal orders
9. Prepaid cards

3.0 How much currency and/or BNI should a person declare at the customs

The law does not limit how much currency or BNI one may carry across the Tanzanian borders. However, Regulation 5 (1) AML Regulations of 2016 provides that a person shall not enter or depart the territory of the United Republic of Tanzania while in possession of currency or BNI amounting to Ten Thousand US Dollars (USD 10,000) as provided under Regulation 4 (1) without declaring to the customs authority.

Furthermore, Regulation 4 (2) emphasizes that a person carrying both the currency and bearer negotiable instruments, should be aware that, the prescribed amount for declaration should be the aggregate of such currency and instrument. Thus, if the said aggregate amounts to USD 10,000 or more, that person is also required to declare the currency and BNI at the customs.

Moreover, in circumstances where the currency or BNI shall be in Tanzanian shillings or any other foreign currency (aside from the USD), the customs authority will convert the said amount based on the official conversion rate of the Bank of Tanzania of which, the same will still be required to be declared if upon conversion, it amounts to USD 10,000 or more.

In circumstances where there is no official conversion rate of the Bank of Tanzania in respect of a particular currency, the exchange rate of the Central Bank or Monetary Authority that issued the currency will be used.

4.0 How to declare

Regulation 5 (2) of the AML Regulations 2016 stipulates that when entering or departing the borders of Tanzania while in possession of currency and/or BNI that totals to USD 10,000 or more, one must do the following:-

1. Filling in declaration form.
   This form is known as the Form for Declaration of Currency and Bearing Negotiable Instruments by Travelling Cross Borders; Form I.  It can be obtained at any point of entry/exit from Tanzania. One must ensure that the form is filled in to its entirety; and is also filled in with correct and accurate information.
2. Presenting the filled in form to the Customs Authority for inspection.
   After accurately filling in the form to its entirety, one must submit it to the Customs Authority Officer for inspection. When satisfied with the inspection, the Customs Authority Officer will retain the original declaration form and handover a duplicate copy of the declaration form to the person who made the declaration.

5.0 Consequences of failing to declare the currency and BNI at the customs

Any person who contravenes with Reg. 4 and 5 of the AML Regulations, 2016 by failing to declare the currency or BNI or declaring false or inaccurate information, commits an offence.  Regulation 6 (1) of the AML Regulations, 2016 empowers the customs officer, at any time, to exercise his discretion by compounding the offence and order the person to pay a fine which shall not exceed the amount of fine prescribed by law.

 Furthermore, Regulation 6 (2) provides that, for the Customs Officer to exercise this discretion as laid out in Regulation. 6 (1) cited above, he must satisfy himself that the offence meets the following conditions.

1. The undeclared or falsely declared currency or BNI are not related to financing of terrorism, money laundering or any predicate offence.
2. The undeclared or falsely declared currency or BNI does not exceed USD 300,000 or any other foreign currency equivalent thereto, or
3. The person concerned admits in writing that he has committed the said offences and agrees to pay the imposed penalty.

Upon satisfaction, the Customs Officer will record in writing, specifying the offence committed and order the person to pay a penalty of ten percent of the undeclared or falsely declared amount. This imposed penalty may be paid in either Tanzanian Shillings, United States Dollars or Euros.

In the above circumstances where the Customs Officer has compounded an offence, Regulation 6 (4) provides that, that person concerned will not be liable to pay any further penalty or charges in respect of that offence and also, the compounding decision shall be final and not subject to any appeal.

Regulation 8 vests powers to the Customs Officer to search a person and his belongings if he suspects, on reasonable grounds, that a person has not declared the said currency or BNI,

If the committed offence fails to meet the conditions stipulated in Regulation 6 (2) as cited above, the Customs Officer is mandated to seize the whole amount of the undeclared or falsely declared currency or BNI and issue a seizure notice to the said person as it has been provided in Regulation 10 (1). This notice is issued in a form titled Form for Seizing Undeclared of Falsely Declared Currency and BNI by travelers; Form III.

Upon cessation, the Customs Officer is obliged to deposit the seized currency or BNI to the special account provided by the Financial Intelligence Unit (FIU) as prescribed in Regulation 10 (2). Thereafter, the Customs Officer shall investigate the matter and submit the case file to the Director of Public Prosecutions for institutions of criminal proceedings.

Upon conviction, the Court may issue an order for forfeiture or confiscation of the seized currency or BNI in connection with the offence. Subsequently, Regulation 10 (2) mandates the Commissioner of FIU to arrange for the payment to the Treasure Registrar on the amount specified in the forfeiture order.

On the other hand, the Commissioner of FIU may return the currency or BNI to the person to whom it was seized on the following grounds:-

1. It was decided after investigation, that there is no need to prosecute the matter
2. There is an order from the court to that effect.

6.0 Conclusion

As the Latin phrase goes by saying, ignorantia juris non excusat, meaning ignorance of the law excuses no one, we, Breakthrough Attorneys urges everyone intending to depart or enter the borders of United Republic of Tanzania to abide with this Regulation in order to avoid any legal sanctions as a result of failing to declare, or declaring inaccurate currency or BNI amounting to USD 10,000 or more.

 

Important Notice:

This publication has been prepared for information purposes only, and it does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty (express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, Breakthrough Attorneys, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it.