Newly affluent Chinese nationals are bringing big wads of cash into North America the old-fashioned way -- tucked into wallets, purses and suitcases at airports -- and it appears a chunk of it winds up in Canada's housing market.
Between April 2011 and early June 2012, money brought by Chinese citizens comprised 59 per cent of all monies seized in Vancouver and Toronto airports, the country's busiest, according to a Wall Street Journal news report.
Nearly $13 million in cash was seized during that period, the newspaper reported, citing Canada Border Services Agency data obtained under the country's access to information legislation. Most of the money was returned.
In one case at Vancouver's airport, a Chinese man was found with $177,500 in the lining of his suitcase and stuffed into his wallet and pockets. He was fined.
The financial penalty was roughly $2,500, a relatively small price to pay for evading strict foreign-capital controls imposed by Beijing. China restricts private citizens from taking out more than $50,000 per individual per year, the paper notes.
According to the report published last week, transporting large amounts of cash isn't necessarily illegal. Travelers must declare cash over $10,000 when they land in Canada or the U.S. Most undeclared cash is temporarily seized and subject to fines.
If customs agents believe the cash comes from illegal activities, however, the onus is on the traveler to prove otherwise before it is returned.
The average cash seizure amounts at Vancouver's airport, which makes up the lion's share of cash seizures in Canada, is roughly $16,000, according to the border agency documents.
Some of the cash is ending up in Canada’s real estate markets, particularly the Toronto and Vancouver condo markets, which has possibly driven up prices.
The newspaper said the Chinese embassies in Ottawa and Washington didn't respond to requests for comment on Chinese nationals bringing cash to Canada. China's State Administration of Foreign Exchange also didn't immediately respond. As well, U.S. customs agencies didn't comment directly on cash seizures from Chinese individuals.”