Carrying Cash Across Border

Carrying Cash Across the Border: Declaration Rules and the Risk of Forfeiture

It is not a crime to travel with a large amount of cash. Failing to declare it, however, can lead to a heavy fine, imprisonment and the loss of the money itself.

Introduction

Many Malaysians carry cash when they travel. A family may bring money for a relative’s wedding overseas, a trader may carry cash to pay suppliers across the Causeway, and a returning worker may bring home years of savings. None of this is illegal. But when the amount is large, the law requires it to be declared.

These rules are found in Part IVA of the Anti-Money Laundering, Anti-Terrorism Financing and Proceeds of Unlawful Activities Act 2001 (Act 613), commonly known as AMLA or AMLATFPUAA 2001. This article explains, in plain language, what must be declared, who must declare it, what happens if you do not, and how undeclared cash can be forfeited to the Government even if no one is convicted of any offence.

Why does the law care about cash at the border?

Most money today moves electronically through banks, which are required to check their customers and report suspicious transactions. Physical cash is different. It is easy to carry, hard to trace and can be used immediately. Criminals who want to avoid the banking system may simply carry their money across the border, hide it in luggage or vehicles, use couriers known as “money mules”, or send it in parcels.

Part IVA closes this gap. It brings the physical movement of money into and out of Malaysia within the same system that watches bank transactions. The law does not ban carrying cash. Instead, it requires transparency. Large amounts must be declared, so that the authorities can check them and spot suspicious patterns.

What counts as “cash” and “bearer negotiable instruments”?

Section 28A defines the key terms. “Cash” means coins and printed money that are legal tender and commonly used as money in the country that issued them. This covers both Malaysian ringgit and foreign currencies, and it includes notes printed on polymer as well as paper.

The law also covers “bearer negotiable instruments”. These are paper documents that work almost like cash, because whoever holds them can usually obtain the money. They include traveller’s cheques, cheques payable to “bearer”, cheques signed and endorsed without any restriction, cheques made out to a fictitious person, and cheques that are signed but leave the payee’s name blank.

Where the money is in a foreign currency, it is converted at the exchange rate applicable at the relevant time to decide whether it crosses the threshold. Bank transfers, e-wallet balances and digital assets are not “cash” for the purposes of these rules, although they are monitored through other parts of AMLA.

When must you declare?

Travellers entering or leaving Malaysia

Under section 28B, anyone entering or leaving Malaysia with cash, bearer negotiable instruments or both above the prescribed value must declare the amount. It does not matter where the money is kept. Cash in your pocket, in your luggage, in your car or carried “otherwise” is all treated as money you are bringing with you.

The threshold is not written into AMLA itself. It is set by the competent authority, Bank Negara Malaysia, through an order published in the Gazette, so it can be adjusted without amending the Act. At the time of the Lee Won Kyu case discussed below, the threshold under the 2014 Gazette order was USD10,000 or its equivalent, and declarations were made in Customs Form No. 22. Because the figure can change, travellers should always check the current threshold with Bank Negara or the Royal Malaysian Customs Department before travelling.

Sending cash by post, courier or freight

Under section 28C, the same duty applies to anyone who moves cash or bearer negotiable instruments above the threshold into or out of Malaysia by post, courier, freight forwarding or any other means. The law recognises that money does not need to be carried by a person to cross the border.

Receiving cash from overseas

Section 28E adds a further duty on the person receiving the money. If you receive cash or bearer negotiable instruments above the threshold that were moved to you from outside Malaysia, you must declare the amount to Bank Negara within five business days of receiving it, and provide any other information Bank Negara requires. This catches money that slips past the border, for example in a parcel or through a friend who has just arrived. The penalty for failing to do so is higher, with a fine of up to RM5 million, imprisonment of up to five years, or both.

Exceptions for transport companies

Section 28D recognises that airlines, bus operators and courier companies cannot realistically check every passenger’s wallet or every sealed parcel. A company that carries passengers does not have to declare money that its passengers have with them. That duty stays with each passenger. A company that carries goods is not liable for money hidden in a shipment if the customer never mentioned it and the company had no idea, and no sensible reason to suspect, that money was inside. The carrier must prove these matters, so good records and sensible checks are important. A courier that ignores obvious warning signs cannot later claim ignorance.

The main obligations and penalties are summarised below.

Summary of the main declaration duties and offences under Part IVA of AMLA

Making the declaration and getting it right

Under section 28F, a declaration must be made in the form specified by Bank Negara and must contain full and accurate information. Declarations made at the border, or for goods sent by post or courier, are made through an “authorised officer”, usually a customs officer. Declarations about money received from overseas under section 28E are made directly to Bank Negara.

It is not enough simply to fill in the form. Making a declaration that is false, inaccurate or incomplete is itself an offence, carrying a fine of up to RM3 million, imprisonment of up to five years, or both. Section 28K also treats most declarations under this Part as customs declarations for the purposes of the Customs Act 1967, which brings the customs system of checks and enforcement into play.

Declarations are not just paperwork. Customs officers must pass declarations and information about suspicious cross-border movements to Bank Negara on request. This information feeds into Malaysia’s financial intelligence system and can help identify courier networks, unusual travel patterns and laundering routes.

Do not split the money

Some people try to avoid declaring by breaking a large sum into smaller amounts below the threshold. They may make several trips, ask companions to carry part of the money each, or send it in several parcels. This practice is known as “structuring” or “smurfing”.

Section 28G makes structuring a serious offence. It applies not only to the person who carries the money, but also to anyone who directs, assists or takes part in the arrangement. The penalty is a fine of up to five times the total amount involved, imprisonment of up to seven years, or both. The prosecution must show that the purpose was to avoid making a declaration, but a court may infer this from the circumstances, such as repeated trips close together, several people travelling together with similar sums, or instructions to keep each amount below a certain figure.

What can customs officers do?

Section 28H gives authorised officers wide powers. When you enter or leave Malaysia, an officer may require you to say whether you are carrying cash or bearer negotiable instruments, state the total value, confirm whether you have declared it, produce the money for inspection and answer questions about it.

Officers may also search you and your belongings, enter premises, board vehicles, vessels or aircraft, and open containers and parcels to check for undeclared money. If an officer has reason to suspect that the money may be evidence of an offence under this Part, it may be detained and removed. There is an important safeguard. A body search may only be carried out by an officer of the same gender and with strict regard to decency.

Refusing to cooperate without a reasonable excuse, or knowingly or recklessly giving a false answer on an important point, is an offence with a fine of up to RM3 million, imprisonment of up to five years, or both. If the offence continues, a further daily fine of up to RM3,000 may be imposed.

Section 28I also allows an authorised officer who is looking into an offence under this Part to arrest someone without a warrant. The officer must reasonably believe that the person has failed, or is trying to fail, to declare as required under section 28B or 28C. The usual constitutional safeguards still apply. The arrested person must be told the grounds of arrest, may consult a lawyer, and must be brought before a magistrate within 24 hours, excluding travel time.

The risk of forfeiture

Perhaps the most serious consequence for many people is not the fine or the prison term, but the loss of the money itself. Section 28L provides two routes to forfeiture.

First, where a person is prosecuted for an offence under this Part, the court must order that the money, instruments or other items be forfeited if they are shown to be connected with the offence, either as the very thing involved or as evidence of it. The court decides how much is appropriate to forfeit. Importantly, this can happen even if no one is convicted.

Second, where no one is prosecuted or convicted, the Public Prosecutor must apply to the High Court for forfeiture within eighteen months from the date the money was seized. If the judge is satisfied that the money is connected with an offence under this Part in the same way, forfeiture must be ordered. The eighteen-month period prevents the authorities from holding seized money indefinitely without bringing the matter before a judge.

Both routes are subject to section 61 of AMLA, which protects third parties who have a genuine claim to the money and acquired their interest in good faith. Such persons can come forward and object to the forfeiture.

The practical lesson is clear. Money that is perfectly legitimate can still be at risk if it is not declared. Declaring it properly is the simplest way to protect it.

Case study: Lee Won Kyu v Pendakwa Raya [2020] 7 MLJ 196

The facts

In Lee Won Kyu lwn Pendakwa Raya [2020] 7 MLJ 196, decided by the High Court in Johor Bahru on 30 December 2018, a South Korean traveller drove into Malaysia from Singapore on 28 July 2016. He stopped his car in the red lane at the Bangunan Sultan Iskandar customs complex, which is the lane where travellers are supposed to declare what they are bringing in.

As soon as he arrived, a customs officer stopped and searched the car and found RM110,000 in RM100 notes inside a bag in the boot. The officer later admitted in court that he never asked the traveller whether he had any money to declare and never offered him the declaration form, Customs Form No. 22.

The traveller was not charged under AMLA. Instead, he was charged under section 135(1)(e) of the Customs Act 1967 for knowingly transporting “uncustomed goods” with the intention of evading the Act. The Magistrate’s Court convicted him, fined him RM220,000 (or two years’ imprisonment if he could not pay), and ordered that both the cash and his car be forfeited.

What the High Court decided

The High Court allowed his appeal and acquitted him. Its reasoning can be summarised in five points.

Cash is not “goods” under the Customs Act. The Customs Act defines goods as including all kinds of movable property, but does not explain whether that covers money. Looking to the Sale of Goods Act, the court held that currency is not “goods”. The customs rules themselves also treat goods and cash separately, so the magistrate was wrong to treat the money as uncustomed goods.

The duty to declare cash came from a regulation, not from the Customs Act. At the time, the obligation to declare cash above USD10,000 in Customs Form No. 22 came from Regulation 17(1)(b) of the Customs Regulations 1977, read with a 2014 Gazette order made under section 28B(1) of AMLA. The offence he was charged with required proof that he intended to evade a provision of the Customs Act itself. Breaching a regulation is not the same thing, so the charge was defective. If there was any breach, the proper charge was under Regulation 66, which carried a maximum fine of only RM5,000.

He was never given a fair chance to declare. The traveller had stopped in the red lane, which is the very place where declarations are made. He did not try to rush through or use the green lane. Relying on an older case, the court stressed that a person who is required to declare should be given every opportunity to do so, right up to the last possible moment. Since he was stopped immediately and never given the form, it could not be said that he had failed to declare.

The customs presumption did not apply. The prosecution relied on a presumption in section 119 of the Customs Act. The court held that this presumption only concerns questions such as whether duty was paid or whether goods were lawfully imported. Neither issue arose here, so it could not help the prosecution.

Forfeiting the whole sum was excessive. The duty to declare only arose because the amount exceeded the threshold. The court treated about RM40,000 as the amount that could be carried without declaring, so the breach concerned only the excess of about RM70,000. Forfeiting the entire RM110,000 and the car was therefore disproportionate, especially for a first-time foreign traveller.

The court also doubted the officer’s evidence that the traveller had claimed to be carrying only RM11,000, since the difference from RM110,000 would have been obvious to the eye, and gave him the benefit of the doubt.

The outcome

The traveller was acquitted and his car and luggage were returned. The money, however, was not simply handed back. The court ordered that he be given the chance to complete Customs Form No. 22 and seek Bank Negara’s permission for the money he had brought in, and that the cash be returned to him once that permission was granted.

Why this case matters

The case shows that the courts will insist on fairness at the border. A traveller who comes forward at the declaration point must be given a real opportunity to declare before being treated as having failed to do so. The authorities must also charge a person under the correct law, and the harsher customs offence of smuggling “goods” cannot simply be stretched to cover cash. Finally, any penalty or forfeiture must be proportionate to the actual breach.

It is equally important not to read too much into the case. Mr Lee was acquitted because he was charged under the wrong provision and was stopped before he had a chance to declare, not because carrying undeclared cash is harmless. The case did not decide anything about the offence under section 28B of AMLA, which today carries a fine of up to RM3 million, imprisonment of up to five years, or both. Even in his case, the money was only to be returned after the proper declaration and Bank Negara approval.

One remark in the judgment also needs care. In discussing whether the forfeiture was excessive, the court observed that the traveller could have brought the same amount in over several trips, or with companions each carrying a smaller sum, without declaring. That comment was made only to show that forfeiting the entire amount was out of proportion. It should not be taken as advice. Deliberately splitting money across trips or people in order to avoid a declaration is now the separate offence of structuring under section 28G of AMLA, which carries a fine of up to five times the total amount and imprisonment of up to seven years.

Practical tips for travellers and businesses

Check the threshold before you travel. The amount is set by Gazette order and can change. Confirm the current figure with Bank Negara or the customs authorities.

When in doubt, declare. Declaring is not an admission of wrongdoing. Legitimate money that is properly declared is far less likely to be detained.

Use the red lane and ask for the declaration form. If you are carrying a large amount, go to the declaration lane and ask a customs officer for the form. At the time of the Lee Won Kyu case, this was Customs Form No. 22.

Do not split the money among family members or trips. Dividing a sum to stay below the threshold can amount to structuring, which carries heavier penalties than failing to declare.

Carry proof of where the money came from. Bank withdrawal slips, sale agreements, invoices or letters explaining the purpose of the money can help answer questions quickly.

Answer questions honestly. Giving false answers to an officer is a separate offence.

Declare money received from overseas. If someone brings or sends you cash above the threshold from abroad, declare it to Bank Negara within five business days.

Consider using the banking system. For large sums, a bank transfer is often safer and simpler than carrying cash.

Courier and logistics businesses should keep good records. Clear terms requiring customers to disclose cash, and records of checks carried out, will be important if the business ever needs to rely on the exception for carriers.

Seek legal advice early. If your money has been detained or seized, speak to a lawyer promptly, especially given the eighteen-month forfeiture timeline.

Conclusion

Carrying cash across the border is lawful, but the law expects transparency. Part IVA of AMLA requires large amounts of cash and bearer negotiable instruments to be declared, whether they are carried by a traveller, sent by post or courier, or received from overseas. Failing to declare, making a false declaration or splitting the money to avoid declaring are all serious offences.

Above all, undeclared money is at risk of forfeiture, even where no one is convicted. The Lee Won Kyu case shows that the courts will insist on a fair chance to declare, correct charges and proportionate penalties, but it is no substitute for compliance. For the ordinary traveller, a few minutes spent declaring at the counter is the best protection for both their money and their freedom.

This article is for general information only and does not constitute legal advice.

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