EU High Court Clarifies Travel Rules for Cash

(CN) – The European Union’s Court of Justice ruled Thursday that travelers in an airport in EU territory must disclose cash above 10,000 euros, even if they’re on a layover traveling between two non-EU states.

In 2010, the Benin-based company Intercontinental SARL had Oussama El Dakkak transport American dollars by airplane from the West African nation of Benin to Lebanon, with a layover at Roissy-Charles de Gaulle airport in France, an EU member state.

Customs officials at the French airport searched El Dakkak and found more than $1.6 million and nearly 4,000 euros in cash.

He was charged with violating a regulation that requires people entering or leaving the EU to declare their possession of cash above 10,000 euros, or $10,945.

Criminal proceedings against El Dakkak were dropped for procedural reasons, and the seized cash was returned, but Intercontinental and El Dakkak brought a legal challenge in France seeking compensation for the incident.

They argued he didn’t violate the requirement to disclose the cash because the regulation doesn’t apply to passengers who are in the international transit area of an EU-member airport traveling from one non-EU country to another.

On Thursday, the EU’s Court of Justice ruled against El Dakkak and Intercontinental, finding that travelers in international transit areas of airports located in the territory of EU member states must declare cash over 10,000 euros.

The court found that no treaty provisions exclude those areas from the scope of EU law. Therefore, El Dakkak’s layover at Roissy-Charles de Gaulle airport constituted him entering the EU and being subject to its regulations, including the obligation to declare large amounts of cash.

“Where a natural person moves from a place which is not part of the geographical area covered by Article 52 TEU and Article 355 TFEU to a place which is part of that area, that person enters the European Union for the purposes of Article 3(1) of Regulation No 1889/2005,” according to the ruling, which was translated from French. “That is the case with a person who, like Mr. El Dakkak, disembarks from an aircraft coming from a third State in an airport in the territory of a Member State and waits in the international transit area of that airport before boarding another aircraft heading to another third State.”

The EU Court of Justice said its ruling is consistent with the goal of the cash-disclosure regulation, which is to stop illicit money from being introduced into the financial system and prevent the investment of laundered money.

“If that provision were to be interpreted to the effect that people in an international transit area of a European Union airport are not subject to that obligation, the effectiveness of the control system for cash entering or leaving the European Union, provided for by Regulation No 1889/2005, and consequently the attainment of its objective would, at least in part, be jeopardized,” the ruling states. “The international transit areas of the airports of Member States must not be excluded from the scope of Article 3(1) of Regulation No 1889/2005.”

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