Suspected criminal proceeds or undeclared money seized from Chinese travelers has more than doubled in Canada since 2013, as the rate of capital flight from China continues its unprecedented pace.
According to recent numbers from the Canada Border Services Agency, airport officials confiscated $11.5 million CAD in non-reported currency and "monetary instruments" in 2015, up from $5.5 million two years earlier.
The number in 2016 could be even higher if the amount discovered thus far — $6.5 million — is any indication.
The Chinese currency represents nearly 30 percent of all undeclared money seized by Canadian authorities — a significantly higher chunk than in the US where, according to Reuters, it makes up about 10 percent of the total.
It's part of a larger problem of capital flight from China, which is struggling with a faltering economy.
Despite stricter currency controls imposed by the government, $1 trillion US left the country last year. The yuan has lost more than 3 percent of its value against the US dollar this year, and China has attempted to bolster it by burning through assets it holds in other foreign currencies. The country's foreign exchange reserves, which can be used when a domestic currency is rapidly devalued, have fallen to $3.2 trillion from $3.21 trillion this month alone.
Chinese residents can legally convert up to $50,000 US per year into foreign currencies.
Some of that capital has found its way into Canada's housing markets, with officials blaming skyrocketing housing prices in Toronto and Vancouver on an influx of Chinese money. A new foreign buyer tax of 15 per cent was imposed on Aug. 2 by the British Columbia government in an effort to address low vacancy rates and high real estate prices in the Metro Vancouver area, where $885 million of foreign money flowed into the residential real estate market from June to July this year.
"We have taken note of the relevant press reports," Mr. Yang Yundong, a spokesperson for the Chinese embassy in Canada, told VICE News in an email. "As a matter of fact, the relevant departments of the Chinese government always request and urge Chinese citizens outbound for Canada to learn in detail and comply with Canadian customs rules and regulations."
"The Chinese law enforcement departments tolerate no offenses of illegally carrying foreign exchange abroad or money laundering," he said.
Canadian border officers have the authority to search for and seize non-reported currency and "monetary instruments" that add up to $10,000 or more, spokesperson Esme Bailey told VICE News in an email. To detect it, they use databases, as well as X-ray and gamma-ray equipment.
"It is important to note that the CBSA [Canada Border Services Agency] does not take enforcement action based on an individual's nationality," wrote Bailey.
In its tracking, the CBSA doesn't distinguish between undeclared amounts and suspected criminal proceeds, but Bailey notes that unreported money can be returned upon the payment of a fine of $250 to $5,000, but suspected criminal proceeds are never released.
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