Commuters bearing cash,lots of ithttps://indianexpress.com/article/news-archive/web/commuters-bearing-cash-lots-of-it/

Commuters bearing cash,lots of it

The passenger,Boris Boillon,43,is a former French ambassador to Iraq and Tunisia.

There was nothing extraordinary about the casually dressed businessman waiting on a Paris train platform except,it turned out,for the envelopes he carried — stuffed with 350,000 euros in cash,and seized by French customs agents as he prepared to depart for Belgium.

The passenger,Boris Boillon,43,is a former French ambassador to Iraq and Tunisia with two degrees from prestigious universities and a Legion of Honour medal. But to customs agents,who seized the money in July,he was just one of a growing number of “cash commuters.”

At the borders of European countries in economic crisis,customs agents say they are seizing increasing amounts of undeclared cash exceeding the 10,000 euros that each traveller is allowed to carry. They find it stashed in luggage,cake boxes,potato-chip bags,cookie tins and sometimes even children’s pockets. The cash,often in bundles of 500-euro notes,is moving with political currents as some Europeans seek to hide their wealth from rising taxes,high-profile tax investigations and tightening rules at Swiss banks and other traditional havens.

The agents say they are routinely detaining business travellers who are on their way to European financial capitals,carrying minimal luggage and behaving nervously. “We see professionals and businessmen in insurance and banking,like him,every day,” said Philippe Bock,secretary general of the French solidarity trade union for customs agents,referring to Boillon. “Three hundred fifty thousand euro was nothing exceptional,” Bock said. “Every month it passes like that,and there’s more and more money because of the crisis.”

For decades,banking secrecy laws in Switzerland made banks there a refuge for foreigners hoping to keep assets away from official notice. But Switzerland signed a treaty in October providing for the automatic exchange of tax information with depositors’ home countries,and bankers have been warning clients to make tax declarations or risk having their Swiss accounts closed. That has left many would-be tax avoiders with little choice but to move their money around the old-fashioned way. “The main reason for the increase in seizures is simply the rising use of cash by fraudsters,including criminal networks and tax evaders,” said Mathieu Delahousse,a French journalist and co-author of a book about the phenomenon,Cache Cash. “People are still taking money abroad for tax evasion,but it is also moving in the other direction,because Swiss banks are closing accounts of foreign customers,and then they have to make a choice: declare these bank accounts and pay high taxes,or hide the money.”

The rule requiring travellers crossing borders within the European Union to make a written customs declaration when carrying more than 10,000 euros in cash was introduced in 2007 in the hope of deterring money laundering and tax evasion. Undeclared cash can be seized and held for six months,and fines of 25 per cent or more can be withheld. The authorities can also start broader investigations into the origins of the money in special customs courts. Customs agents are blasé about catching business people,but they were amused to see an American family of four,including two young children,in a discreet corner of a railway station near the Swiss border,dividing 600,000 euros among themselves. The money was seized when they boarded a train.

Cash seizures by French customs agents have soared over the last decade even as budget cuts have thinned the agents’ ranks by 25 per cent. The total for the first quarter of 2013 was up sixfold from a year earlier,to 103 million euros,most of it from a man who tried to drive into France from Switzerland with 86 million euros in bearer bonds,which are tantamount to cash. On an average day in 2012,French agents seized 300,000 euros,50 per cent more than the 2011 average,according to government figures. And the customs agency estimates that it catches only five per cent of the undeclared cash crossing the country’s borders.

In February,inspectors on the fast train between Zurich and Paris stopped a Spanish traveller who was carrying 1.8 million euros,made up entirely of 500-euro notes. Those bills,the largest denomination in circulation,have come to be nicknamed Bin Ladens for their association with money laundering and illicit transactions.

In Italy,cash-sniffing Labrador retrievers and German shepherds helped the financial police who prowl the country’s five main airports and its northern border to nearly triple their seizures of cash in 2012,to 124 million euros. The authorities were close to exceeding that figure this year by mid-autumn.

Advertising

Sergio Callipo,national secretary of the Italian customs agents’ union,said that much more cash slipped through. “Millions of passengers pass every week,and some officers and one or two dogs are not a real deterrent for smugglers,” he said. “We would need an army,and we are just sentinels.” Some experts believe that widespread publicity about tax investigations of well-known figures in struggling countries is driving an increase in cash smuggling. Those ensnared include Jérôme Cahuzac,the former French budget minister; Uli Hoeness,the president of the Bayern Munich soccer club in Germany; and the soccer star Lionel Messi of FC Barcelona in Spain.