Saturday 21 July, 2018

Cash transactions in excess of $1 million are illegal

In 2007, the Jamaican parliament passed the Proceeds of Crime Act (POCA). The Act repealed and replaced the Drug Offences Forfeiture of Proceeds and Money Laundering Acts and made provisions for forfeiture through the courts of all properties and accumulated wealth that cannot be explained by legitimate activity.

POCA stipulates a $1 million limit on cash transactions with financial institutions. Therefore under POCA, it is illegal for persons to pay or receive cash in excess of One Million Dollars (J$1,000,000.00) for any cash transaction including transactions broken up into separate payments.

Example: A car is being sold for $1,100,000.00 and in an attempt to circumvent the provision, the vendor and purchaser agree to accept and pay the purchase price in multiple payments over a period of time.

POCA states that any payment over J$1 million for goods (including purchases of motor vehicles, wholesale goods, building supplies, jewelry); as well as payments for services or payments to liquidate debts or other monies owing must be conducted using non-cash means. These include payments by cheque, card or electronic transfer. Failing this, both the seller and customer may be found in breach of the law and may face imprisonment.

This means that cash transactions exceeding J$1 million should only be conducted with a bank, merchant bank, building society, cambio or other institution permitted by law.

With the implementation of the Economic Reform Programme, the Government of Jamaica introduced several reform measures aimed primarily at stemming revenue leakage, combating money laundering and terrorism financing.