The movement of assets between one nation and another is natural in the context of the interaction of the subjects, whether they are individuals or legal entities. The motives may arise from various reasons: international commercial operations, investments, movement of company dividends, vacations, seeking to protect against legal uncertainties in a given scenario and even tax benefits offered by other States. All these situations expose a money traffic that can generate administrative and even criminal conflicts in the face of possible disputes before the Central Bank of the Argentine Republic and the Customs itself.
The State and its power of control
It is important to identify the State agencies involved in the control of international trafficking, both of people, goods and money itself, and to what extent their authority extends in each case.
So, Immigration controls the entry and exit of people; the Central Bank does the same regarding currencies; and the Customs maintains authority over the entry and exit of merchandise.
At first glance it seems easy to see the differences that exist, but there may be disputes between the Central Bank and the Customs regarding money.
The money
Since Customs controls the international traffic of goods, will it have power over money? To do so, it will be necessary to analyze whether it meets the character of merchandise in terms of article 10 of the Customs Code. (1) and in accordance with this it may be possible to import or export.
By majority, the Fourth Chamber of the Federal Court of Criminal Cassation considered that “National or foreign legal tender banknotes (in this case, US dollars) are an object that can be imported or exported.” sentencing that “Consequently, it is merchandise in the terms of article 10 of the CA.” (2)
Notwithstanding this, there is a doctrinal division in considering money as merchandise. From our point of view, starting from the fact that it is an object that can leave or enter the national territory, and customs has the power to control the international traffic of merchandise. (3) Even when the Central Bank has functions in the control of exchanges and consequently of the international movement of currencies, certainly if the money enters or leaves the territory under some customs regime that enables it, the customs may not only exercise due control over these items, but if there is an irregular situation it could report them under the terms of Law 22.415 - Customs Code - Consequently, the money will be considered merchandise, capable of being imported or exported depending on the way its extraction or entry occurs. Not so when this is executed through the bank transfer system, where the money will be affected by the control treatment of the Central Bank and its particular regulatory framework..
Violation or smuggling
There is currently a ban on the withdrawal of 10.000 dollars (or equivalent currency) or more (4). Therefore, the only possibility of withdrawing these values from the territory will be by bank transfer, which will be the responsibility of the Central Bank. This restriction only applies to the exit and not to the entry, apart from the requirement of the corresponding declaration that must be made.
Now, if a person wants to leave with a larger amount than allowed, given this limitation, does customs have the power to control it? And if so, what consequences does the eventual irregularity that this produces generate?
The departure of a person from the national territory would show the status of a trip that may be made for different reasons and the goods transported will be subject to the treatment of the luggage or cargo regime. (5). In line with this, if you have money in your possession that exceeds the permitted amount, it would be a violation of such regimes. (6) but it could also externalize the criminal offense of article 863 of the Customs Code - smuggling -
The infringement of the baggage and parcel regime, in our opinion, is a typical blank penal norm, where they must be integrated or complemented with others. Having clarified this, we can note that there would be an infringement in the terms of the Customs Code, when the customs service presumes that the merchandise being entered or exited has a commercial purpose, as well as in the case that an attempt is made to enter merchandise not admitted by the regime.
Therefore, if the removal of an amount of 10.000 dollars or more is subject to a ban, the traveler or crew member will be violating the baggage or luggage regime by attempting to remove an object that is prohibited by that means of removal. However, this conduct could be charged with smuggling in the presence of certain elements.
Without going into detail about smuggling, it is necessary to bear in mind that this crime covers any act or omission involving trickery or deceit, provided that it is intended to hinder, prevent or deceive customs control.
This definition is made up of different objective elements of the type that each require a much more in-depth analysis, but, in short, it must be kept in mind that the crime of smuggling can be a crime of danger, without the need to actually deceive Customs. It is enough only to hinder customs control. It is also required that this act or omission occurs with trick or deceit and fraud -subjective factor- and in turn, that said conduct is suitable and has the potential to produce a difficulty or deception to the supervisory body.
In order to clarify the difference between the state of infraction or crime of smuggling with respect to money, we will give an example:
In the first case, when leaving the country, an individual is found with more than $10.000 in his fanny pack, Could this conduct be considered a crime of smuggling?
For such a crime to be established, there must be an action or omission that has the potential to hinder or deceive customs control, through trickery and fraud. In the case given here, there would be concealment, but it must be taken into account that money, due to its very nature of value, is not usually carried in plain sight, much less amounts of this magnitude. Thus, there will always be a degree of concealment, and for this reason, the assumption of concealment must have a greater depth of analysis when determining the criminal type - infraction or crime.
Jurisprudence has held that for the crime of smuggling to be committed, the money must be trafficked through unusual places, and that it must be carried in a fanny pack. -as an example- such a crime would not be configured, but yes, it could be the presence of an infraction.
Consequently, carrying such amount in a suitcase or in a place that would not constitute concealment for the criminal offense of smuggling; especially when it would not meet the requirement of suitability of the scheme.
However, if the same individual had hidden the money inside some other item, such as inside a teddy bear or hidden inside a false bottom in a suitcase, there would be a case of concealment that shows the presumption of the existence of the ideal ruse to deceive customs.
Money income
Currently, travelers of any category and crew members who bring into Argentine territory, as luggage or small items, cash and/or monetary instruments, in foreign or national currency of legal tender, for a value equal to or greater than the equivalent of ten thousand US dollars, must declare them to the customs service, upon entering the country. (7).
This obligation arises from General Resolution 2704 of 2009, which stipulates in its fifth article, “When non-compliance with the obligations established in this general resolution is verified, the responsible party will be subject to the sanctions and precautionary measures provided for by the Customs Code and complementary regulations…”.
Regarding this situation of money entry, the simple lack of declaration would not necessarily lead to being faced with a crime - smuggling - in terms of the Customs Code, as resolved by Chamber II of the Federal Criminal Cassation Court, ""It is not necessary that sophisticated mechanisms of simulation and concealment be involved, but the conduct must be effective enough to hinder or prevent customs control. Therefore, a simple failure to declare or a mere lie is not enough to establish the criminal offense..."(8).
Conclusion
From the above, we can deduce that money can be the object of international traffic, being covered by regulations of both the Central Bank and the Federal Administration of Public Revenue. In this sense, the BCRA will have the power to control it. However, in certain circumstances the money may be subject to customs control, cases such as that of a subject who travels, and it will then be the customs that must exercise control, deriving the eventual situations of infractions or penalties that may correspond in terms of the Customs Code. In these cases, the character of merchandise susceptible to being subjected to import or export, even that part of the money that is attempted to be entered or exited in violation of the use of these customs regimes, will be considered.
Felipe Coronel de la Torre is a lawyer. Member of the Guifecor Law Firm – Lawyers
- Article 10 of the Customs Code “For the purposes of this code, merchandise is any object that is capable of being imported or exported…”
- Federal Court of Appeals – Chamber IV –“currency export smuggling” against Miguel Angel Ikei –
- Article 112 of the Customs Code “The customs service shall exercise control over persons and merchandise, including merchandise that constitutes a means of transport, insofar as they are related to the international traffic of merchandise”
- Cash withdrawal limit: AFIP No. 2705/09 – Article 1º — The withdrawal of cash and traveler's checks in foreign currency and precious metal coins from Argentine territory, through the baggage and small items regimes, may only be carried out when their value is less than TEN THOUSAND UNITED STATES DOLLARS (US$ 10.000) or its equivalent in other currencies.
- Article 488 of the Customs Code – Baggage Regime – Article 517 of the Customs Code – Pacotilla Regime.
- Article 977/978 of the Customs Code – Violation of the baggage, parcel and diplomatic franchise regimes.
- AFIP General Resolution No. 2704 – Article 1
- Federal Criminal Cassation Court – Chamber II – case CPE 571/2013, dated August 3, 2017.
The author is a lawyer, Master in Tax Law and Specialist in Customs Law.
