Money Transfer Agent

Money transfer agents, including sub-agents and partner outlets, facilitate illicit tactics by:

• Directly receiving customer funds with minimal AML/CFT oversight.
• Accepting multiple small deposits structured below mandatory reporting limits.
• Introducing an additional intermediary layer, reducing the transparency of end-to-end transactions.
• Fragmenting transactional data across sub-level platforms, complicating financial institutions’ tracing efforts.

MSBs with extensive agent networks allow criminals to:

• Disperse illicit flows through multiple service points, limiting centralized oversight.
• Structurally avoid detection or suspicious thresholds by fragmenting large sums into smaller transfers.

Financial institutions face greater difficulty tracking and aggregating these dispersed transactions, impeding effective monitoring.

Money transfer agents process remittances and can be exploited when:

• Offenders split illicit funds into smaller amounts routed across multiple corridors.
• Jurisdictions with inconsistent reporting thresholds are chosen to avoid detection and layering controls.

Complicit money transfer agents facilitate cuckoo smurfing by:

• Intercepting genuine remittance instructions and redirecting those funds to alternative accounts controlled by criminals.
• Depositing illicit proceeds into the intended beneficiaries’ accounts under the guise of a routine inbound transfer.
• Concealing or falsifying sender information to mask the true source of deposits from financial institutions.

By abusing their position in remittance channels, they enable criminals to blend illicit funds with legitimate transactions.

As sub-agents for a principal payment provider, money transfer agents directly handle transactions and customer onboarding. They may:

• Operate with minimal oversight, omitting complete KYC data or ignoring irregularities.
• Facilitate high-risk transactions that appear routine under the principal provider’s license, creating gaps in AML controls for financial institutions.

Money transfer or remittance services are exploited by criminals orchestrating mule recruitment. Mules:

• Receive instructions to send funds to various recipients, often internationally.
• Conduct quick outward transactions that obscure the source and final destination of illicit proceeds.

Money transfer agents, including large brands and small community shops, are exploited by:

• Processing numerous small-value transfers under multiple sender identities, reducing scrutiny.
• Conducting only limited checks for transactions below threshold limits, enabling illicit operators to deposit and withdraw funds with minimal detection.

This exploitation undermines financial institutions’ monitoring efforts, as these remittances often remain under the radar of enhanced due diligence.

• Process recurring small remittances or wires that collectively move large illicit sums.
• Criminals distribute transactions among multiple agents and corridors to circumvent alert thresholds.
• Financial institutions find it challenging to aggregate all these movements for effective AML monitoring.