Brussels, 16/07/2015 (Agence Europe) - On Thursday 16 July, the Court of Justice of the EU found that Hungary's imposition of fines of up to 60% of undeclared cash amounts above €50,000 crossing an external border of the EU is disproportionate to the infringement and is a breach of the regulation (1889/2005) on controls of cash entering and leaving the EU (case C-255/14).
The regulation in question, which aims to block the movements of illegal cash across the external borders of the EU, brings about the obligation to declare to the member state of the point of crossing an external border any sums above €10,000, indicating the provenance of the money and its intended use. It lays down “effective, proportionate and deterrent” penalties in the event of failure to declare these sums. The Administrative and Employment Court of Kecskernét (Hungary) asked the Court of Justice whether the Hungary legislation, which imposes a fine of 60% on any undeclared sum above €50,000 in the event of non-declaration, complies with the regulation.
In its judgment, the Court concludes that such a fine is disproportionate to the infringement committed. It states that the fact that the level of the penalty depends on the undeclared amount is not disproportionate in itself, but as the infringement in question consists solely of not declaring the money and not necessarily any participation in fraudulent or illegal activities, a fine equivalent to 60% of amounts greater than €50,000 is, it finds, excessive. The judges state that a sanction consisting of a lower amount together with a measure to retain the undeclared cash, in order to allow controls or verifications on its use, provenance and destination to be carried out, would be more apt to meet the aims of the regulation, whilst remaining in proportion to the offence. (Francesco Gariazzo)