The check is in the mail, international travel with cash or checks…
Many countries have enacted legislation to combat money laundering which is used to avoid lawful payment of taxes or disguise illegal operations. Many countries have based their laws off of or copied the US provisions that regulate crossing borders with money or negotiable instruments.
Comments from US Customs and Border patrol state:
“When entering the U.S. in-transit to a foreign destination, you will be required to clear U.S. Customs Border Protection (CBP) and Immigration and Customs Enforcement. If you have “negotiable monetary instruments” (i.e. currency, personal checks (endorsed), travelers checks, gold coins, securities or stocks in bearer form) valued at $10,000 or more in your possession a “Report of International Transportation of Currency or Monetary Instruments” form FinCEN 105 must be submitted to a CBP Officer upon your entry into the United States. Forms can be requested from a CBP Officer is required.
Monetary instruments that are made payable to a named person but are not endorsed or which bear restrictive endorsements are not subject to reporting requirements.”
While it makes sense to restrict people with suitcases full of cash, many people are innocently being caught when buying properties in Mexico. Many send checks through Fedex or other overnight courier services that are made out to the seller of a property and therefore do not violate US laws.
Mexico, however, copied the US law but did not differentiate between checks made out to a party and endorsed checks. Any check over $10,000 dollars must be declared.
This has had the result of customs in Mexico seizing checks sent for the purchase of properties even when made out to the seller and fining the sender or receiver for failure to declare the check causing delays and extra costs.
Each year the laws become stricter with fewer people and places accepting US or foreign checks and Customs in Mexico is being streamlined and checking almost all packages entering the country which means the chance of being caught has skyrocketed.
An example is when I request certified copies of judgments from the LA County Superior Court and they are archived due to being older and the court wants a check but doesn’t know the amount so I fill in the payee but leave the amount blank but also put “Not to exceed $40.00” and Aduana will not send my checks arguing there is no amount listed even though it is true except it will never exceed $40.00 and never $10,000 obviously.
Another serious danger people find themselves in is when there is a rollover of their IRA and their trustee sends them the rollover check to their address and they list an address in Mexico or one of the Laredo mailing services which then forwards the letters to Mexico, this also can be dangerous as if the rollover check is seized then you will likely blow the 60 day limit and pay US taxes and penalties on top of those to the Mexican government.
The best practice is to use electronic transfers for payment of large items. Far too many people are erroneously assuming that the law of their home country is the same in Mexico causing them innocently to break the law due to it being poorly drafted in the first place. Europe, the US and Canada all have the same policy on checks and only consider traveler`s checks, endorsed checks or bank checks as cash, not unendorsed personal checks made out to a party. Remember these laws apply to money entering and leaving countries.