Docket: T-559-13
Citation:
2014 FC 539
[UNREVISED
ENGLISH CERTIFIED TRANSLATION]
Ottawa, Ontario, June 4, 2014
PRESENT: The Honourable Mr. Justice de Montigny
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BETWEEN:
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MUSTAFA AMARI
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Applicant
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and
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THE MINISTER OF PUBLIC SAFETY AND EMERGENCY PREPAREDNESS
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Respondent
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JUDGMENT AND REASONS
[1]
This application for judicial review concerns a
decision by the Minister of Public Safety and Emergency Preparedness (Minister)
dated March 4, 2013, confirming the decision by a customs officer to confiscate
a sum of $78,523.55 in US currency because the applicant had not reported the
amount when he entered Canada.
[2]
For the reasons that follow, I have concluded
that the Minister's decision must be maintained.
I.
Facts
[3]
The applicant, a Canadian citizen, arrived at
the Pierre Elliott Trudeau International Airport on March 22, 2012, from Libya.
On his customs declaration card, given to the customs officer, he answered
"no" to the question asking if he was bringing an amount equal to or greater
than CAN$10,000.00 to Canada.
[4]
When the customs officer at the primary
inspection line specifically asked him how much money he was bringing back, the
applicant answered US$5,000.00, while refusing to say where this amount came
from. The officer noted this information on the applicant's customs declaration
card and directed him to the secondary inspection line.
[5]
The officer at the secondary inspection line
asked the applicant to show him the US$5,000.00 he had declared. The applicant
showed him the money, composed of US$100 bills. The officer then proceeded to
examine the applicant's baggage and found another US$5,000 that was not reported.
The applicant informed the officer that this amount was for a friend.
[6]
The customs officer found another US$10,000.00
in US$100 bills between two jackets in a bag. Confronted by the customs
officer, the applicant admitted that this US$10,000.00 was also his friend's,
someone called El Hadi Ashwin. When questioned by the officer, the applicant
clarified that the total amount of US$15,000.00 was from his friend's brother,
so his Canadian brother could buy furniture and send it to Libya.
[7]
After examining each piece of luggage, an
officer asked the applicant if he was in possession of other currency, and the
applicant always answered no. The examination of the applicant's baggage continued
and led to the discovery of the following non-reported amounts:
▪
US$10,000.00 in a briefcase;
▪
US$10,000.00 in a Winners brand bag;
▪
US$18,500.00 in a laptop computer bag;
▪
US$40,000.00 in a small black suitcase;
▪
226 Libyan dinars and 25 Tunisian dinars in the
applicant's pants pockets.
[8]
When asked about the origin of this money, the
applicant vaguely stated that it was from Libyans to purchase cars in Canada
and then to re-export them to Libya. The applicant refused to identify who was
to receive these cars. The applicant also declared a sum of US$30,000.00 from
his brother, and he refused to provide any other information about the origin
of the other currency.
[9]
The customs officer therefore decided to seize as
forfeit the above-listed currency in the applicant's possession, pursuant to
subsection 18(1) of the Proceeds of Crime (Money Laundering) and Terrorist
Financing Act, SC 2000, c 17 (the Act), on the ground that this
currency had not been reported in accordance with section 12 of the Act.
[10]
The officer did not grant the applicant a
release under subsection 18(2) of the Act because he had reasonable grounds to
believe that the seized currency was proceeds of crime. To reach this
conclusion, the customs officer took a number of factors into consideration,
including: (a) many acts of laundering proceeds of crime and terrorists funding
occur in Libya; (b) the applicant is an employment insurance recipient and
therefore has limited income; (c) the applicant hid money in various places in
his baggage; and (d) the applicant was unable to explain where the money in his
possession came from and lied a number of times.
[11]
On or around April 30, 2012, the applicant filed
an application for review with the Minister pursuant to section 25 of the Act.
In this application, the applicant identified the alleged owners of the amounts
seized, and what they were to be used for. He also submitted bank documents in
support of his claims that show bank withdrawals and currency exchange and sale
of foreign currency operations.
[12]
On July 5, 2012, an adjudicator provided the
applicant with the notice of the circumstances of the seizure. The adjudicator
first revealed that after an initial review of the file, it seemed that the seizure
was valid since the amounts seized were not reported as required under
subsection 12(1) of the Act. The adjudicator also specifically asked the
applicant to submit documentation or evidence that clearly show the legitimate
origin of the seized currency and evidence that the currency in his possession
at the time of the seizure was from third parties. On August 2, 2012, September
7, 2012, and January 22, 2013, the applicant sent the adjudicator additional
written submissions in support of his application.
[13]
On April 5, 2013, the applicant filed his
application for judicial review of the decisions rendered by the Minister that
he contravened the Act with regard to the currency seized and that it should be
held as forfeit. It is important to note that the applicant did not file an
action under section 30 of the Act to challenge the Minister's decision
rendered under section 27 according to which there was indeed a violation of
the Act (non-report) with regard to the currency seized as forfeit.
II.
The impugned decision
[14]
The Minister's delegate rendered a decision
based on the "case synopsis and reasons for decision"
drafted by the adjudicator. First, the delegate concluded that there was a
violation of subsection 12(1) of the Act because the evidence shows the
applicant neglected to declare the amounts seized during his return to Canada on
March 23, 2012. As a result, the seizure of these amounts was authorized and
valid considering subsection 18(1) of the Act.
[15]
The delegate then reviewed the grounds that led
the officer to confiscate the amounts seized, and concluded that the reasons
were sufficient to justify this measure. Although the applicant invoked his
ignorance of the obligation to declare the currency seized, it seems that the
applicant had reported in writing that he was not bringing back an amount equal
to or greater than CAN$10,000.
[16]
The delegate also made note of the explanations
the applicant provided regarding the origin of the funds and the evidence
submitted to this effect, but nonetheless concluded that this evidence did not
establish the legitimate origin of the funds seized:
However, the evidence provided does not
establish the legitimate origins of the currency. Specifically, you submitted
that the majority of the seized funds had been entrusted to you by your
immediate and extended family members. You indicated that $30,000.00 USD had
been given to you by one of your brothers, $8,500.00 USD from another brother
and $10,000.00 USD from your brother-in-law’s son. You supplied banking
records, proof of currency exchange and confirmations of employment to support
this contention. However, the documentation submitted does not show a source of
revenue or income that would account for this currency. The documentation
supplied also does not show how the funds you were entrusted with were
deposited in your family members’ banking accounts. Therefore, as no
documentation was supplied show how their revenue or income sources were
deposited into their respective banking accounts, a documentary gap is present
that generates additional suspicion as to the legitimacy of the seized funds
because it creats [sic] an undocumented void between a potential legitimate
origin and the seized funds.
You suggested that the remainder of the seized
funds originated from your own personal assets and your family’s assets in
Libya. However, the documentation submitted does not show a source of revenue
or income that would account for this currency. As the documentation supplied
does not identify the legitimate origins of the aforementioned amounts of
currency, the suspicion regarding the legitimate origin of these particular
seized funds remains as the Agency was not able to definitively ascertain their
origin.
[17]
Considering the gaps in the evidence the
applicant submitted, the delegate therefore refused to exercise the discretion conferred
on him under section 29 of the Act to return the seized currency and confirmed
the forfeiture.
III.
Issue
[18]
The only issue in this case is to determine
whether the decision by the Minister's delegate is reasonable considering all
the evidence on file.
IV.
Analysis
[19]
The Act aims to establish a mandatory reporting
regime for suspicious financial transactions and cross-border movements of
currency and monetary instruments. To achieve these objectives, Part 2 of the
Act provides for a system of currency reporting under which importers and
exporters must report to a customs officer any importation or exportation of currency
of a value that is equal to or greater than an amount prescribed by regulation.
[20]
The currency reporting requirement is set out in
subsections 12(1) and 12(3) of the Act and sections 2, 3 and 11 of the Cross-Border
Movements of Currency and Monetary Instruments Regulations, SOR/2002-412 (the
Regulations). These provisions require anyone importing or exporting currency
or monetary instruments worth CAN$10,000.00 or more to declare such importation
or exportation to a customs officer forthwith. This declaration must be made in
writing.
[21]
If a person fails to comply with this reporting
requirement, the unreported currency will then be subject to seizure as forfeit
by an officer pursuant to subsection 18(1) of the Act, if the latter believes
on reasonable grounds that subsection 12(1) of the Act has been contravened.
[22]
Under subsection 18(2) of the Act, the officer
must then decide whether he suspects on reasonable grounds that the unreported
currency is the proceeds of crime or funds used to finance terrorist
activities. If the officer concludes that he has such suspicions, the seized
currency cannot be returned. Otherwise, the officer returns the currency seized
as forfeit, subject to a penalty in accordance with section 18 of the
Regulations.
[23]
Under section 24 of the Act, the forfeiture of
currency seized under Part 2 of the Act is final and not subject to review, or
to be set aside or otherwise dealt with except to the extent and manner
provided by sections 25 to 30 of the Act. Section 25 allows for a request to
the Minister to decide whether subsection 12(1) was contravened, by providing
written notice to the officer within 90 days after the date of the seizure. If
the Minister decides that subsection 12(1) was contravened, he may either
return the currency or monetary instruments seized or an amount equal to their
value, upon reception of the regulatory penalty or without a penalty, or return
all or part of the penalty paid under subsection 18(2), or confirm the
forfeiture of the currency or monetary instruments to Her Majesty in right of Canada
(see section 29 of the Act).
[24]
Under section 30 of the Act, a person who makes
a request under section 25 may, in the 90 days after being notified of the
Minister's decision, appeal the decision by way of an action before the Federal
Court. In such a proceeding, the Court can only determine whether section 12 of
the Act was contravened. A person who wishes to challenge the Minister's
decision made under section 29 of the Act must proceed by an application for
judicial review in accordance with section 18.1 of the Federal Courts Act,
RSC (1985), c F-7: Tourki v Canada (Minister of Public Safety and Emergency
Preparedness), 2007 FCA 186.
[25]
It is not in dispute in this case that the
standard of review that applies to a decision made under section 29 of the Act
is reasonableness: Dag v Canada (Minister of Public Safety and Emergency
Preparedness), 2008 FCA 255, at para 4; Sellathurai v Canada (Minister
of Public Safety and Emergency Preparedness), 2008 FCA 255, at para 25 [Sellathurai];
Yang v Canada (Minister of Public Safety and Emergency Preparedness),
2008 FCA 281, at paras 9-13. In Dunsmuir v New Brunswick, 2008 SCC 9 at
para 47, the Supreme Court of Canada noted that reasonableness "is
concerned mostly with the existence of justification, transparency and
intelligibility within the decision-making process. But it is also concerned
with whether the decision falls within a range of possible acceptable outcomes
which are defensible in respect of the facts and law."
[26]
The applicant argues that he provided ample
evidence showing the source and legitimate nature of the money forfeited. This
evidence includes bank statements, currency conversion or sale of foreign
currency operations, declarations by family members and letters confirming the
employment of these people. The applicant alleges that this evidence clearly
shows the source of the forfeited amount and argues that the Minister erred by
not considering this evidence and finding that the forfeited currency was
proceeds of crime.
[27]
It has been clearly established in the case law
of this Court that bank statements are not sufficient to establish a legitimate
source for the funds. As my colleague Justice Gleason stated in Tran v
Canada (Minister of Public Safety and Emergency Preparedness), 2013 FC 600
(at para 26), "[i]t is possible that proceeds of crime
can be funnelled through and withdrawn from a bank account." Although the
applicant was asked to submit documentation or evidence that clearly shows the
legitimate source of the forfeited funds, he was unable to show how these
amounts had been generated. The statement that the applicant was from a wealthy
family and had a large bank account is not sufficient to prove in a
satisfactory manner that the funds were from a legitimate source.
[28]
Additionally, it must be taken into
consideration that the applicant lied repeatedly and contradicted himself. He
did not report in his customs declaration card that he was bringing to Canada
an amount equal to or greater than CAN$10,000.00, he lied at the primary
inspection line by stating he was only bringing in US$5,000, and he lied again
by indicating that the sum of US$5,000.00 was for his friend El Hadi Ashwin,
then he stated that another unreported amount of US$10,000.00 also belonged to
this same friend, and again lied to the customs officers by repeating after the
discovery of each new bundle of unreported bills that he had no other currency
in his baggage. He then contradicted himself later in the statements he made to
the Minister.
[29]
Moreover, the applicant's financial and
professional situation cannot be overlooked. The evidence on file does not show
any known income source other than employment insurance. As for his business,
ATS, he apparently did not know its address or phone number at the time of the
seizure, and this allegedly new vehicle import-export business, registered in 2005,
did not seem to have any activity at the time of the seizure. The applicant was
unable to explain how he could have generated savings of US$15,000.00 in a bank
account in Libya.
[30]
As for the claim that a sum of US$5,000.00 was
allegedly destined for his friend El Hadi Ashwin to purchase furniture and re-export
it to Libya, it is also not credible. This friend did not provide any evidence
confirming the applicant's version or explaining how his brother in Libya was
able to legitimately obtain such an amount nor what type of arrangement the two
brothers, one in Canada and the other in Libya, had agreed to for the alleged
purchase of furniture and their re-exportation.
[31]
Lastly, the applicant's transporting such an
amount of money in cash seems suspicious. Considering the risks of proceeding
in such a manner, it is clearly insufficient for the applicant to state that
members of his family do not trust banks and especially do not rely on them for
international transactions.
[32]
In short, I feel that the Minister's delegate
could reasonably conclude that there was a lack of credible evidence showing
the legitimate source of the seized funds. As noted in Sellathurai at
para 50, it is the applicant's responsibility to show, with reliable and
credible evidence, the legitimate source of the money seized:
The issue is not whether the Minister can show
reasonable grounds to suspect that the seized funds are proceeds of crime. The
only issue is whether the applicant can persuade the Minister to exercise his
discretion to grant relief from forfeiture by satisfying him that the seized
funds are not proceeds of crime. Without precluding the possibility that the
Minister can be satisfied on this issue in other ways, the obvious approach is
to show that the funds come from a legitimate source.
[33]
In these circumstances, the Minister's delegate
was entitled to confirm the forfeiture of the seized currency, as authorized
under paragraph 29(1)(c) of the Act. As a result, the application for
judicial review is dismissed, with costs.
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