Man has undeclared $10,000 seized at border after exchange rate pushes him over limit to take from country Review

Nationalpost.com: 04/02/2013

IM4.03 - Demonstrate an understanding of how changes in the value of the Canadian dollar can affect business opportunities.

Summary

A man from British Columbia knew that any amount of cash exceeding $10,000 had to be declared when crossing the border. Robert Docherty counted $9,880 U.S. dollars and $335 Canadian dollars with the currency’s exchange rate in mind in order to keep the amount within the legal limit. At the time of his flight to Costa Rica from the Pearson airport a few days later, the American dollar value had already increased sending Docherty past the limit of $10,000. Once a currency detector dog found the cash and the Canada Border Services Agents checked the Bank of Canada’s exchange rate, the cash was seized and Docherty has not retrieved any of it after discussing with two court levels. He argued he was not hiding it but making an effort to stay within it and the money was from an inheritance for himself and his daughter’s wild mushroom business to purchase property abroad. The government argued that cash being smuggled across international borders is often a sign of criminal profits though. Docherty had little proof of his business records, making it difficult to believe that it was the reason why he carried the cash. Due to his unverifiable explanation, the court dismissed his appeal and he will unlikely retrieve any of it.

Connection

Customs at the Toronto Pearson Airport,
Source: Ottawareness.wordpress.com

Currency exchange rates are constantly changing whether there are major or just minor differences in the values and they can have a significant impact on business opportunities. In Docherty’s situation, he was using the cash he claimed to inherit for start-up costs of his business. It was supposedly going towards the property that he and his daughter needed for their wild mushroom business which they were seeking to purchase in Costa Rica. But, within those few days between when he exchanged the cash and when their flight was, the American currency managed to reach an even higher value, pushing the amount out of bounds. The same issue can happen with any other currency which adds increased risk to conducting business activity outside of the home country. The risk is there when the other currency’s value increases because it suddenly makes everything more expensive for foreigners who are either travelling or new residents. On the contrary, if that foreign currency lowers in value then it can definitely have a positive effect on business opportunities which is why many companies take the chance on foreign investments. This was likely the reason why Docherty was purchasing land in Costa Rica in the first place because the cost of any decent properties in North America is far beyond the $10,000 in Canadian or American dollars that he was carrying on him.