Q: I found a lost item on which I can presume yei’ush. Civil law requires turning it in to the police. Should I do so?
A: We have mentioned that according to most authorities dina d’malchusa does not apply to monetary laws between individuals.
Nonetheless, Rema rules that if the king decreed the return of lost items from a shipwreck, despite the inherent yei’ush involved, you must hand over your found item. Similarly, he writes that the practice is to return stolen items that you purchased even after yei’ush of the owner, in accordance with dina d’malchusa (Rema, C.M. 259:7; 356:7). Shach (356:10) objects to applying dina d’malchusa here, but explains that the Rema’s ruling is due to the common practice that evolved and was subsequently enacted by Jewish communities.
Ketzos (259:3), however, indicates that dina d’malchusa is applied here, since halachah also instructs returning lost and stolen items after yei’ush, lifnim mishuras hadin.
Therefore, you should turn the item in, especially in a place that is mostly Jewish. Some say, however, that if you can publicize and return the lost item properly, whereas the police may not, you should not hand it over to them (Pischei Choshen, Aveidah 2:; Hashavas Aveidah K’halachah 3:4).