FinCEN Urges Money Services to Be Extra Vigilant in Cross-Border Remittances

The Treasury Department’s Financial Crimes Enforcement Network (FinCEN) issued an alert Friday (Nov. 28) reminding money services businesses (MSBs) that they should be vigilant in reporting suspicious activity around cross-border transfers from people without legal status in the United States.

The alert said that while the “vast majority” of remittances from people in the U.S. to foreign residents are legitimate, fraudsters have used low-dollar cross-border funds transfers to facilitate or commit illicit activity.

It also said that MSBs are required to file a suspicious activity report (SAR) for any transaction that involves at least $2,000 and that the MSBs have reason to suspect is relevant to a possible violation of law or regulation.

The alert added that “this includes the cross-border transfer of funds derived from unlawful employment or otherwise derived from funds the MSB knows, suspects, or has reason to suspect were illicitly obtained in the United States by illegal aliens.”

The U.S. has had a “significant volume of cross-border funds transfers” in recent years and has taken steps this year to highlight the risks, FinCEN said in a Friday press release.

“Money services businesses should be vigilant in identifying suspicious financial activity involving illegal aliens who present significant threats to national security and public safety,” Under Secretary for Terrorism and Financial Intelligence John K. Hurley said in the release. “At Treasury, we will continue to protect the American people by faithfully upholding the laws of the United States.”

FinCEN issued a warning in August saying that Chinese money laundering networks are shifting money across borders and fueling operations of Mexico’s drug cartels.

These networks are now among the most significant threats to the U.S. financial system, the regulator said in an advisory.

In September, FinCEN Director Andrea Gacki said anti-money laundering (AML) and countering the financing of terrorism (CFT) need streamlining and modernizing as financial institutions face new threats from cyber criminals and illicit financial networks.

Appearing before the House Subcommittee on Financial Services Subcommittee on National Security, Illicit Finance and International Financial Institutions, Gacki said there is an “urgent need to modernize” the AML and CFT regime to focus on higher-risk customers and activities.