The Difference Between Smurfing & Structuring – Financial Crimes

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The Difference Between Smurfing & Structuring – Financial Crimes
Close-Up Man Hand And Giving Turkish Lira. Finance And Economy.

Financial crimes/frauds are common within the money service business space, especially smurfing and structuring. They come in different shapes and sizes, be they, domestic issues, international issues, or both. Domestic crimes are bad, when these crimes involve offshore and international tax-related matters, the penalties can be outrageous.

In banking and cross-border payment violation, two of the most common types of financial crimes are Smurfing and Structuring. Both terms are often used interchangeably and somehow similar.

It’s not hard to see why they are thought to be the same thing as this post would explain. However, Smurfing slightly differs from Structuring. To see how we start by understanding the Achilles’ Hills of money launderers; Currency Transaction Report (CTR) and Suspicious Activity Report (SAR).

CTR and SAR 

Banks globally are usually required to report any single bank transaction or multiple transactions on a single business day, going through an account, exceeding a certain amount. These reports are Currency Transaction Report (CTR) and the Suspicious Activity Report (SAR).

CTR usually applies when a single transaction exceeds the statutory limit set by regulators. SAR may be filed if activity gives rise to a suspicion that the account holder is attempting to hide something or make an illegal transaction. An example of such activity is making multiple small transactions on a single business day into one account, especially if the total of these transactions exceeds the statutory limit.

In the United States, the limit is $10,000, meaning any cash deposit or withdrawal in excess of $10,000 must be subjected to CTR filing. Limits differ from country to country depending on the regulatory requirements. These are in place to curb crimes such as money laundering, terrorism financing, and more.

Now that that’s out of the way, let’s break down Structuring;

Structuring

Structuring is the act of arranging a financial transaction in an obscure way, so as to avoid detection of a large amount of money being transacted which would trigger the bank to file a CTR or SAR.

Let’s throw a person into the picture and call him Joe. Assuming Joe needs to get $100,000 into the United States financial system, he cannot deposit it all in one bank or in a single transaction since the limit per transaction is $10,000. If Joe does that, the bank would file a CTR and his transaction would come under an investigation. What Joe would likely do is arrange the money in a series of deposits below the limit.

Now Structuring does not have to be around illegally sourced money. Perpetrators could use it to evade taxes on legally acquired money or to hide how much money they generate and the sources.

Now, let’s see Smurfing;

Smurfing

Smurfing is everything Structuring is, and more. It goes deeper than and more complicated. Smurfing involves depositing illegally gained money into multiple geographically dispersed accounts, following a series of transactions and techniques so as to avoid detection. 

The multiple transactions performed are usually done using runners (called “smurfs”). These are people who make the structured transactions at different banks and at different intervals to mask linking the money back to the money launderer. 

In Smurfing, the sources of funds are concealed via complex transactions and bookkeeping tricks called “layering”. Some of the tricks used are tying the illegal money close to legal money in the books and depositing them as one. This is called “placement” and usually involves offshore bank deposits. “Integration” is the different techniques through which the money legally flows back to the launderer.

The movement of illegally acquired money, use of ‘smurfs’, and the three techniques mentioned above are what differentiate Smurfing from Structuring. Smurfing is purely illegal and attracts serious consequences.

Protecting your business

Since smurfing usually involves offshore transactions or cross-border payments, criminals may look to leverage money transfer operators to pass their money. They can do this by running a number of remittance transactions through an operator to a single beneficiary or multiple beneficiaries.

As a money service business owner, it is your duty to protect your business against smurfing and structuring activities as these could lead to severe penalties if legal investigations implicate your business. Ignorance of these illicit activities is usually a weak defense at law as the court can decide you allied with criminals.

A smart way to protect your business is integrating remittance software strong in Anti-Money Laundering (AML) protections through cutting-edge technology. This automating checks for money laundering through transactions your business processes, saving you the time to concentrate on running your business.

MTAComply®

MTAComply® is one such AML technology built into the Money Transfer Application – a leading remittance and cross-border payment software. MTAComply® works by searching your business transaction database to identify the number of transactions received by a beneficiary or transmitted by the sender over a given period of time. 

If you’re serious about protecting your money service business from the dangers of financial crimes, you need an advanced AML technology MTAComply® working within your system. Contact us to learn more about the Money Transfer Application, and how we can help secure, automate and scale your business.

18 Comments on “The Difference Between Smurfing & Structuring – Financial Crimes”

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    Understanding COSC Validation and Its Importance in Watchmaking
    COSC Certification and its Rigorous Standards
    Controle Officiel Suisse des Chronometres, or the Official Swiss Chronometer Testing Agency, is the official Swiss testing agency that certifies the precision and accuracy of wristwatches. COSC validation is a sign of excellent craftsmanship and dependability in chronometry. Not all timepiece brands pursue COSC certification, such as Hublot, which instead adheres to its proprietary strict standards with mechanisms like the UNICO, attaining similar precision.

    The Science of Exact Chronometry
    The central system of a mechanical watch involves the spring, which supplies power as it loosens. This system, however, can be prone to environmental factors that may affect its precision. COSC-accredited movements undergo strict testing—over fifteen days in various circumstances (five positions, 3 temperatures)—to ensure their resilience and dependability. The tests evaluate:

    Mean daily rate precision between -4 and +6 secs.
    Mean variation, maximum variation rates, and effects of thermal variations.
    Why COSC Certification Is Important
    For timepiece fans and connoisseurs, a COSC-accredited timepiece isn’t just a item of technology but a demonstration to enduring quality and precision. It signifies a watch that:

    Provides exceptional dependability and accuracy.
    Provides guarantee of superiority across the entire construction of the watch.
    Is probable to retain its worth more efficiently, making it a smart investment.
    Popular Timepiece Manufacturers
    Several well-known brands prioritize COSC accreditation for their watches, including Rolex, Omega, Breitling, and Longines, among others. Longines, for instance, provides collections like the Archive and Spirit, which highlight COSC-certified mechanisms equipped with advanced materials like silicone balance suspensions to improve durability and efficiency.

    Historic Background and the Evolution of Chronometers
    The idea of the timepiece originates back to the requirement for precise chronometry for navigational at sea, highlighted by John Harrison’s work in the 18th cent. Since the formal establishment of Controle Officiel Suisse des Chronometres in 1973, the validation has become a benchmark for evaluating the precision of luxury watches, sustaining a tradition of superiority in horology.

    Conclusion
    Owning a COSC-certified timepiece is more than an aesthetic selection; it’s a dedication to quality and precision. For those appreciating precision above all, the COSC validation provides tranquility of thoughts, ensuring that each certified watch will function reliably under various conditions. Whether for personal contentment or as an investment decision, COSC-accredited watches stand out in the world of horology, maintaining on a tradition of precise timekeeping.

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  16. Rolex watches
    Understanding COSC Accreditation and Its Importance in Horology
    COSC Validation and its Stringent Criteria
    Controle Officiel Suisse des Chronometres, or the Official Swiss Chronometer Testing Agency, is the official Swiss testing agency that verifies the accuracy and accuracy of timepieces. COSC certification is a mark of superior craftsmanship and dependability in timekeeping. Not all timepiece brands follow COSC accreditation, such as Hublot, which instead follows to its proprietary demanding criteria with mechanisms like the UNICO calibre, achieving equivalent precision.

    The Science of Exact Timekeeping
    The central mechanism of a mechanical watch involves the spring, which delivers energy as it unwinds. This system, however, can be susceptible to environmental elements that may affect its precision. COSC-certified mechanisms undergo strict testing—over fifteen days in various circumstances (five positions, three temperatures)—to ensure their resilience and reliability. The tests evaluate:

    Typical daily rate accuracy between -4 and +6 secs.
    Mean variation, peak variation rates, and impacts of temperature changes.
    Why COSC Accreditation Matters
    For timepiece fans and connoisseurs, a COSC-accredited watch isn’t just a item of technology but a testament to lasting quality and precision. It signifies a watch that:

    Provides exceptional reliability and accuracy.
    Offers assurance of superiority across the complete construction of the timepiece.
    Is apt to maintain its worth better, making it a wise investment.
    Popular Chronometer Brands
    Several renowned manufacturers prioritize COSC accreditation for their timepieces, including Rolex, Omega, Breitling, and Longines, among others. Longines, for instance, offers collections like the Record and Spirit, which highlight COSC-accredited movements equipped with innovative materials like silicone equilibrium springs to enhance durability and performance.

    Historical Background and the Evolution of Timepieces
    The concept of the chronometer dates back to the requirement for accurate chronometry for navigational at sea, emphasized by John Harrison’s work in the 18th century. Since the formal foundation of Controle Officiel Suisse des Chronometres in 1973, the accreditation has become a yardstick for evaluating the accuracy of luxury watches, maintaining a legacy of superiority in watchmaking.

    Conclusion
    Owning a COSC-certified timepiece is more than an visual choice; it’s a commitment to excellence and accuracy. For those valuing accuracy above all, the COSC accreditation offers peacefulness of thoughts, ensuring that each validated watch will function dependably under various circumstances. Whether for individual contentment or as an investment, COSC-accredited timepieces distinguish themselves in the world of watchmaking, bearing on a tradition of meticulous timekeeping.

    Reply

  18. Understanding COSC Accreditation and Its Importance in Watchmaking
    COSC Certification and its Rigorous Criteria
    COSC, or the Controle Officiel Suisse des Chronometres, is the official Switzerland testing agency that verifies the accuracy and precision of timepieces. COSC validation is a symbol of superior craftsmanship and reliability in timekeeping. Not all timepiece brands follow COSC validation, such as Hublot, which instead sticks to its proprietary demanding criteria with movements like the UNICO, achieving equivalent precision.

    The Science of Precision Timekeeping
    The central system of a mechanized watch involves the spring, which supplies energy as it unwinds. This system, however, can be susceptible to external elements that may affect its accuracy. COSC-validated movements undergo rigorous testing—over fifteen days in various conditions (5 positions, three temperatures)—to ensure their durability and dependability. The tests assess:

    Average daily rate precision between -4 and +6 seconds.
    Mean variation, highest variation levels, and impacts of temperature variations.
    Why COSC Certification Matters
    For timepiece aficionados and collectors, a COSC-accredited watch isn’t just a item of technology but a testament to lasting quality and precision. It represents a timepiece that:

    Offers outstanding reliability and accuracy.
    Ensures guarantee of superiority across the entire design of the timepiece.
    Is apt to hold its worth more efficiently, making it a smart choice.
    Well-known Timepiece Brands
    Several renowned manufacturers prioritize COSC certification for their watches, including Rolex, Omega, Breitling, and Longines, among others. Longines, for instance, presents collections like the Archive and Soul, which feature COSC-certified mechanisms equipped with cutting-edge materials like silicone balance springs to improve durability and efficiency.

    Historical Context and the Evolution of Timepieces
    The idea of the chronometer dates back to the need for accurate timekeeping for navigational at sea, highlighted by John Harrison’s work in the eighteenth century. Since the formal foundation of COSC in 1973, the validation has become a standard for assessing the precision of high-end watches, sustaining a tradition of excellence in watchmaking.

    Conclusion
    Owning a COSC-accredited watch is more than an aesthetic choice; it’s a dedication to quality and accuracy. For those appreciating accuracy above all, the COSC accreditation provides peace of thoughts, guaranteeing that each validated watch will function reliably under various circumstances. Whether for individual contentment or as an investment decision, COSC-validated timepieces distinguish themselves in the world of watchmaking, bearing on a tradition of careful timekeeping.

    Reply

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