Legal eagle : There is a limit to cash transactions

August 15, 2016

"Gosh! Those were the days," uttered an old man as he reflects on the days when he could have saved his money under his mattress to buy anything he wanted at any price.

That was, indeed, the life of many rural folks and some 'townies', too. Many did not have the luxury of living near to a bank or some other financial institution, and some simply did not trust anyone to save their money for them. Thus, they developed a habit of saving their money to buy what they needed with cash. Those were the days when cash in hand was king.

By 2007, governments worldwide had to deal with money-laundering issues and so had to find ways to deal with the movement of cash, which, by then, had started to pose an increasing problem for law enforcement. One way was for the countries concerned to promulgate legislation to limit the free flow of cash through their ports of entry and exit. In Jamaica, for instance, Section 101 of the Proceeds of Crime Act, 2007 [POCA] made specific provisions that persons transporting cash into or out of the island exceeding the sum of US$10,000 or its equivalent must make a report of that movement of cash to the designated authority.

The provisions of POCA, when it was first promulgated in Jamaica, were not sufficient to counter the fast-turning money trade and so the government responded in 2013 with the Proceeds of Crime (Amendment) Act, 2013 (the POCA Amendment Act). A critical amendment was the insertion of section 101A, which provides that:

 

PRESCRIBED AMOUNT

 

"A person shall not pay or receive cash in excess of the prescribed amount [J$1,000,000 or its equivalent at the date of the transaction in any other currency] in a transaction for the purchase of any goods or services or for the payment or reduction of any indebtedness, accounts payable or other financial obligations; or artificially separate a single activity or course of activities into a set of transactions so that each transactions involves a payment and receipt of cash that is less than the prescribed amount but which activity or course of activities in the aggregate involves payment and receipt of cash that exceeds the prescribed amount."

Payments made to exempted persons or permitted persons, such as banks, deposit-taking institutions or any other institution licensed under the Bank of Jamaica Act, are exempted from this section.

A person who is in breach of Section 101A of the POCA Amendment Act, if summarily convicted before a parish court, is liable to be fined up to $3 million or to a term of imprisonment not exceeding three years or to both fine and imprisonment. Alternatively, if the matter is tried on an indictment in the Circuit Court, a person, if convicted, could be fined or imprisoned up to 10 years or sentenced to both fine and imprisonment.

 

LICENSED INSTITUTIONS

 

Out of an abundance of caution, and to avoid any breach of the law, it may be wise for persons to save their cash at any of the many institutions licensed under the Bank of Jamaica Act or regulated by any other legislation. From these institutions, one can get a cheque or RTGS money [bank-to-bank transfer] to an account at any other financial institution to cover transaction costs without breaching the POCA Amendment Act.

It is abundantly clear that it is not business as usual. The old ways of doing business by opening up a briefcase full of cash should only now be seen in the movies. Cash in hand has been dethroned. It is not king anymore.

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