Capital Controls Now Being Enforced At The Airport

February 16, 2011
Panama City, Panama

My business partner is just plain unlucky.

The last time he came to Panama was about a year ago– we were both attending an exclusive Atlas 400 deep sea fishing trip at a remote lodge in Panama’s Darien province. I flew in from Thailand last year, Matt came from Atlanta.

As he came down the jet bridge to board his flight, he was met by agents of US Customs and Border Protection, a division of the Department of Homeland Security. Agents were on the jetbridge randomly screening passengers… not for bombs, guns, or knives, though… or even drugs for that matter… but for money.

Matt had to empty his pockets while agents went through his suitcase inventorying every scrap of currency they could find, and, even though he was completely within the legal limit of $10,000, he had to waste time filling out some silly report for them.

Last night he arrived to Panama once again, joining me here for our Sovereign Man offshore workshop to take place later this week. This time he connected in Houston, and his experience was even more surreal than last year.

During yesterday evening’s boarding process, customs agents were once again on the jetbridge, but this time with a highly trained, currency-sniffing dog. As Matt walked by, the dog sensed the fresh $400 that he’d just pulled out of an ATM machine, and Matt was pulled aside for secondary screening once again.

The whole episode was over rather quickly– they asked him a few questions, he was able to show that he only had $400, and they let him go. I think there are several interesting points from this, though.

1) It’s incredible that, with dozens of passengers walking down the jetbridge at the same time, the dogs are so highly trained to be able to spot just a few hundred dollars folded in someone’s pockets.

If they can train dogs to find currency, they can certainly train dogs to catch firearms, bombs, and all of those other security issues that the government pretends to care so much about.

Instead, though, they line people up like cattle for hours at a time in order to send them into ridiculously expensive, marginally effective, harmfully irradiating body scanners under the auspices of security. Conversely, a single well-trained German Shepherd was able to screen about 150 passengers in just a few minutes.

2) The government is broke… and they’re proving it to everyone with these desperate attempts to catch people in the act of exporting currency. After all, they have to pay for those $400,000 body scanners somehow, and what better way than to shake people down on their way out the door?

This is really a form of capital controls– they are regulating the free flow of capital across by restricting the undocumented movement of cash. The rule has been in place for a while, but only recently have they been enforcing it in earnest… and it’s amazing to me how the priority has shifted from contraband, weapons, and drugs to cash.

3) If you’re coming to Panama for our workshop, don’t bring a lot of money. The law in the US and Canada is basically the same– monetary instruments (coin, currency, traveller’s checks, bearer securities) exceeding $10,000 in value need to be declared prior to departure, and I’m not sure it’s worth ending up on that list.

Keep large amounts of cash at home. If you open a bank account, it’s easier to wire the initial deposit.

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