Banking Category Banking: the easy, simple banking guide

International money transfer limits

Transfers of money across international borders may be payments for goods and services, remittances to family or even money laundering by crime organisations. International money transfers are regulated for many reasons.

Exchange Controls

Exchange controls are limits on how much money can be transferred internationally. This is done to prevent capital flight, the movement of money out of a country. Capital flight can cause the currency of a small nation to deflate, making it difficult for a government to continue paying its own debt.

Reporting Requirements

The amount and originator of an international money transfer may be recorded and reported to the government. According to Peter Lilley in "Dirty Dealing," the European Union requires registration of the name and bank account of anyone sending an international money transfer, as well as the amount of the transfer. The USA PATRIOT Act requires filing of a Suspicious Activity Report if international money transfer limits are exceeded in either transaction size or volume.

Official Channels

Nations may require all international money transfers to take place through the state bank. This allows the government to set the exchange rate used with other currencies to a rate favourable to itself and to monitor all transactions. Limiting international money transfers to state-approved banks is also done, in an effort to track all international profits so that they can be taxed.

About the Author

My expertise includes product data management software. I provide first and second level technical support for this class of software as well as write FAQs, user manuals and troubleshooting guides for first level staff. My personal finance expertise has been showcased repeatedly on "The Dollar Stretcher" frugal living website and magazine.

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