Structuring below the funds-transfer recordkeeping line
Which scenario catches transfers kept just under the funds-transfer recordkeeping figure, not only cash kept under the reporting line?
A scenario that places here
example"Structured wires just below the funds-transfer recordkeeping threshold"
Channels it applies to
4 of the 20 in the dictionaryMIN WDM WIN REM
Monetary instruments, domestic wires, international wires and remittance and money transfer: one sector each on the coverage chart, hatched where no scenario reaches it.
Obligations
4 regimes| Regime | Obligation |
|---|---|
| Bank Secrecy Act and its regulations (31 CFR Chapter X) | BSA BSA-AML-15 Transaction Monitoring · BSA BSA-REC-1 Funds Transfer Recordkeeping (Travel Rule) |
| FATF 40 Recommendations | FATF R.10 Customer due diligence |
| FATF Recommendation 16, payment transparency, by paragraph | FATF R.16 INR16.8 Cross-border transfers below the de minimis threshold |
| Anti-Money Laundering and Counter-Terrorism Financing Act (Australia) | AUSTRAC AMLCTF-PartA-TxnMon Transaction Monitoring |
The obligations, quoted
BSA BSA-AML-15 Transaction MonitoringAutomated and manual transaction monitoring shall identify unusual or suspicious activity using risk-based scenarios and thresholds.
Where programmes usually fall short: No model validation; Scenarios not aligned to risk assessment
Source: Bank Secrecy Act and its regulations (31 CFR Chapter X)
BSA BSA-REC-1 Funds Transfer Recordkeeping (Travel Rule)Banks must collect, retain, and transmit certain information relating to funds transfers of $3,000 or more, including originator name, address, account number, and amount (31 CFR 1010.410(e)).
Where programmes usually fall short: No transfer impact assessment performed; SCCs not updated to current versions
Source: Bank Secrecy Act and its regulations (31 CFR Chapter X)
FATF R.10 Customer due diligenceFinancial institutions may not keep anonymous accounts or accounts in obviously fictitious names and must, by a principle set out in law, undertake customer due diligence when establishing a business relationship, carrying out an occasional transaction above USD or EUR 15,000 or a payment or value transfer covered by INR.16, when money laundering or terrorist financing is suspected, or when they doubt previously obtained identification data: identify and verify the customer from reliable independent sources; identify the beneficial owner and take reasonable measures to verify that identity, understanding the ownership and control structure of legal persons and arrangements; understand and where appropriate obtain information on the purpose and intended nature of the relationship; and conduct ongoing due diligence and transaction scrutiny consistent with the customer's profile including, where necessary, the source of funds. The extent of each measure follows a risk-based approach; verification takes place before or during establishment of the relationship, or as soon as reasonably practicable after it where risks are managed and business would otherwise be interrupted; an institution that cannot complete CDD does not open the account or perform the transaction, or terminates the relationship, and considers a suspicious transaction report; the requirements apply to new customers and, on materiality and risk, to existing ones. The Interpretive Note sets the risk-based approach, enhanced and simplified measures, the specific measures for legal persons, arrangements and beneficiaries of life insurance, reliance on prior verification and the timing rules.
Where programmes usually fall short: Beneficial owner identified but never verified; Ownership and control structure of corporate customers not understood
Source: FATF 40 Recommendations
FATF R.16 INR16.8 Cross-border transfers below the de minimis thresholdWhere a country adopts a de minimis threshold for cross-border transfers other than cash withdrawals, set no higher than USD or EUR 1,000, transfers below it carry the names of originator and beneficiary and the account number of each where an account is used (or a unique transaction reference number that permits tracing), and where the funds come from another institution its name and the account number; the information need not be verified unless money laundering or terrorist financing is suspected, in which case the institution verifies its own customer's information.
Where programmes usually fall short: Threshold applied above the USD/EUR 1,000 cap; Reference number absent where no account is used
Source: FATF Recommendation 16, payment transparency, by paragraph
AUSTRAC AMLCTF-PartA-TxnMon Transaction MonitoringSystems and controls for monitoring customer transactions for unusual or suspicious activity.
Where programmes usually fall short: No transaction monitoring
Source: Anti-Money Laundering and Counter-Terrorism Financing Act (Australia)