Structuring
Structuring is deliberately splitting transactions into smaller amounts so that each one falls below a reporting threshold and no report is triggered. In the United States it is a federal offense in its own right, committed whether or not the money being moved is criminal in origin.
Also called: smurfing
A bank or money services business has to report certain transactions automatically once they pass a set size — in the United States the currency transaction report is the familiar example. Structuring is the act of arranging payments so that no single one passes that line: a cash deposit split across several days, the same deposit spread across branches, or the same sum broken up between several people. Where a group is used to do it, the conduct is often called smurfing.
In the United States what makes it an offense is the purpose, not the amounts. Each individual deposit may be entirely ordinary, and often is. Federal law prohibits structuring a transaction, or assisting in structuring one, for the purpose of evading the reporting requirement, and says nothing about where the money came from — which is why a customer can commit it with clean money, why it carries up to five years in prison and ten in aggravated cases, and why a member of staff who explains how to stay under the line can be exposed personally.
That is a United States position, and it does not travel unchanged. The offense presupposes a country that operates threshold-based transaction reporting in the first place. The United Kingdom has no cash transaction reporting threshold of that kind and prosecutes this conduct under its proceeds of crime legislation, whose principal offenses require criminal property — so there the source of the funds is precisely what has to be proved.
For a firm, recognizing structuring is not a reason to decline the transaction and move on. Suspicion of structuring is itself reportable, and a suspicious activity report is the usual outcome.
Not the same as deal structuring
In commercial and advisory work, “structuring” means arranging the terms of a transaction — who contracts with whom, where funds sit, how a deal is financed. That is ordinary professional work and has nothing to do with the offense described here. The two meanings share a word and nothing else.
In practice
In the United States, structuring is an offense in its own right, committed whether or not the underlying money is criminal — the wrongdoing is the evasion of the reporting requirement, not the source of the funds. Do not carry that across a border. The offense depends on a country having threshold-based transaction reporting, and in the United Kingdom, which does not, the equivalent conduct is prosecuted under proceeds of crime law, where criminal property is exactly what must be proved. It is unrelated to “deal structuring”, the commercial term used elsewhere on this site.
Example
A US bank customer wants to deposit cash that would trigger an automatic report. Instead they bring in smaller amounts on four consecutive days, then use a second branch the following week. No single deposit crosses the line and every one of them looks unremarkable. The pattern is the offense — and if a teller suggested the schedule, the teller committed it too.
Commonly confused with
| Term | How it differs |
|---|---|
| Deal structuring | Deal structuring is the lawful arrangement of a transaction’s commercial and legal terms; structuring in the AML sense is the evasion of a reporting requirement. |
| Currency Transaction Report | A CTR is the report a threshold triggers; structuring is the deliberate act of keeping transactions below it so the report never happens. |
See also
- Currency Transaction ReportA Currency Transaction Report, or CTR, is a report a United States financial institution files with FinCEN when currency transactions by or on behalf of one person exceed USD 10,000 in a single business day. It is triggered by an amount of cash, not by anything suspicious.
- Suspicious Activity ReportA suspicious activity report is a confidential filing made to FinCEN when a US financial institution knows, suspects, or has reason to suspect that a transaction above a set dollar floor involves illicit funds, has no apparent lawful purpose, or is designed to evade reporting rules. It is filed without telling the customer.
- Bank Secrecy ActThe Bank Secrecy Act is the 1970 United States statute, heavily amended since, that requires banks, money services businesses and other financial institutions to keep records, register where applicable, report large cash transactions and suspicious activity, and maintain an anti-money-laundering program.
- Anti-Money LaunderingAnti-money laundering, usually shortened to AML, is the body of law, regulation and internal controls requiring financial firms to detect, prevent and report attempts to disguise the origin of criminal proceeds. It is an obligation placed on the firm, not a product the firm can buy.