The head of Customs has handed back $302,000 seized from a mysterious foreign diplomat after he failed to declare the vast sum of cash in his luggage.

The experienced traveller, part of an official delegation invited to New Zealand, was let off with a warning instead of being prosecuted. They had claimed that they had forgotten they had the money in the bag. 

The identity of the individual involved is not known, nor the country they were representing or when the cash was sized. 

The money was confiscated, but has since been returned following a review.

Anyone arriving in the country with $10,000 or more must declare the cash under anti-money laundering laws, or face three months in prison.

Money laundering expert Dr Ron Pol told the Weekend Collective he questions whether a New Zealander would be treated the same.

"If it was just an ordinary New Zealander in the situation, if we had made an honest mistake, we'd love to have our money back as well."

He says that the element of secrecy may be less now that the case is over, we may learn more about it in the future. 

Customs Minister Jenny Salesa said she was satisfied Customs had acted appropriately and "without pressure or influence".

However, National's spokesperson for foreign affairs Gerry Brownlee told The Weekend Collective that there is something very odd about this.

He says that it is hypocritical, as if a New Zealander had ordered something online and the seller did not fill the form out properly, the goods are seized and the New Zealander is forced to pay a fee. 

"A little bit of consistency here from Customs, and certainly an explanation that is well and truly overdue."