EXCLUSIVE: Customs hands back nearly $302,000 to member of foreign delegation but details of the case remain secret as Chief Ombudsman rules disclosure would harm New Zealand's relationship with another country.

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 when a sniffer dog found the cash in his luggage on arrival at the airport.

The money was confiscated. Anyone arriving in the country with $10,000 or more must declare the cash under anti-money laundering laws. Anyone failing to do so could face three months in prison.

The Opposition says the