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Alternative remittance services and underground banking

Techniques reported:

Use of Providers of Designated Remittance Services (PoDRS) to transfer proceeds of crime abroad. Source of funds was imported drugs. Even though vast sums were detected and the businesses closed down, remittances quickly recovered through other means to levels higher than before intervention. (Australia)

ü       Small groups of peoples on short term visas laundering bulk amounts of cash offshore via PoDRS. Rather than structuring funds under reportable limits, bulk quantities were preferred in the hope of remitting as much as possible offshore before detection. False identities were used as risk mitigation by the offenders. (Australia)

ü       Groups of individuals attending an agency of a registered PoDRS at the same time, providing minimal identification and sending funds to various beneficiaries offshore. (Australia)

ü       PoDRS failing to report transactions and/or providing falsified information to the FIU. (Australia)

ü       Poorly trained proprietors of a sub-agency being exploited by a group utilizing their services near closing time and providing false names. Reporting compliance obligations were poorly understood. The super-agents encouraged a relaxed attitude towards sub-agents reporting compliance due to commissions earned on the business. Use of super-agents clearing accounts clouded the identity of transactions processed by sub-agents. (Australia)

ü       In response to enhanced AML/CTF regime, practice by PoDRS of seeking new ways to avoid reporting – such as encouraging structuring and use of multiple fictitious names in the ‘Ordering Customer details’. (Australia)

ü       Existence of registered PoDRS infact providing other types of sophisticated Financial Services (eg foreign exchange contracts). (Australia)

ü       Use of company names to open multiple accounts in various domestic banks to facilitate underground remittance business. Flyers advertised the business and customers could use the company accounts to avoid government agencies tracing the real remittance originators. (Chinese Taipei)

ü       Structured outwards transactions through a Western Union Branch revealed by an STR. (Cook Islands)

ü       Third parties invited via internet to cash counterfeit travellers cheques (which were undetected by the banks and foreign exchange dealers), deduct a commission, and remit balance through Western Union. (Fiji)

ü       Use of multiple accounts in a child’s name to receive deposits of cash and cheques, and conduct inter-bank transfers to try and conceal ownership of the monies. (Macau, China)

ü       Alleged terrorist sending remittances from off-shore to Pakistan. (Pakistan)

ü       Terrorist receiving money remitted from offshore – and via physical cash couriers, netting off arrangements, under/over invoicing and smuggling of currency/commodities. (Sri Lanka)

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