A “funnel account” is an individual or business account in one geographic area that receives multiple cash deposits, often in amounts below the cash reporting threshold, and from which the funds are withdrawn in a different geographic area with little time elapsing between the deposits and withdrawals.
There are, of course, similar legitimate financial activities. So, no one activity by itself is a clear indication of trade-based money laundering. Financial institutions are encouraged to use previous FinCEN advisories as a reference when evaluating potential red flags.
If your financial institution has suspicion, filing of a Suspicious Activity Report (SAR) may be required. While the transactional activity that U.S. financial institutions may experience as a result of the Mexican restrictions may not be indicative of criminal activity, U.S. financial institutions should consider this activity in conjunction with other information, including transaction volumes and source(s) of funds, when determining whether to file a SAR.
Financial institutions should continue to be alert to the variety of methods that may be used to move funds linked to the laundering of criminal proceeds and to report that information as appropriate. Be alert to a possible connection between the suspicious activity being reported and the enacted U.S. currency restrictions on Mexican financial institutions.
The Advisory is available at: http://www.fincen.gov/statutes_regs/guidance/pdf/FIN-2014-A005.pdf
Keeping your financial institution up to date on regulatory issues and your employees educated can be a daunting task. TRC can help. To learn more, contact us at email@example.com or (800) 222-9909.