Table of Contents
What is structuring and why is it illegal?
Structuring is illegal regardless of whether the funds are derived from legal or illegal activity. The law specifically prohibits conducting a currency transaction with a financial institution in a way to circumvent the currency transaction reporting requirements.
How is money laundering done?
Money can be laundered by carrying small sums of cash abroad below the customs declaration threshold. Then this cash is paid into foreign bank accounts before sending it back home. The money is transferred to a lawyer or accountant to hold until a proposed transaction is completed.
What is cash structuring?
Structuring is a strategy used by businesses that are attempting to evade taxes by hiding large amounts of cash. With structuring, companies deposit smaller amounts of cash to avoid automatic reporting by the bank to the government. For example, you might run a small retail shop that has daily cash deposits.
Is structuring only cash?
Structuring (also known as “smurfing”) is often related to money laundering activities. But structuring isn’t limited to cash deposits; it captures cash withdrawals as well.
What are examples of structuring?
An example of structuring would be a business with cash of $17,000 to deposit, breaking it into two deposits, one of $9,000 and the other of $8,000, with specific intent to evade the bank’s currency transaction reporting requirement.
What is structuring in AML?
STRUCTURING is the act of altering a financial transaction to avoid a reporting requirement. In the United States, any cash deposit or withdrawal in excess of $10,000 (on a single business day) is subject to a currency transaction report (CTR for short).
What is smurfing in money laundering?
Structuring appears in federal indictments related to money laundering, fraud, and other financial crimes. The term smurfing is derived from the image of the comic book characters, the Smurfs, having a large group of many small entities.
What is risk based approach in money laundering?
The risk-based approach to anti-money laundering. The risk-based approach means a focus on outputs. Firms that apply a risk-based approach to anti-money laundering ( AML ) will focus AML resources where they will have the biggest impact. Firms must have in place policies and procedures in relation to customer due diligence and monitoring,…
Is structuring illegal?
The premise behind the IRS seizures is a concept called structuring. It is illegal to knowingly and willfully make cash transactions (deposits into bank accounts in particular) under the US$10,000 reporting requirement in order to avoid the reporting requirement.