International business affairs often involve financial transactions with banks outside of the U.S. Several banks have either financial relationships or partnerships with foreign banks. Whether you are an investor with an interest in a foreign venture or a U.S. citizen with family members overseas, you may need to send money frequently to banks outside of the U.S. Largely in an effort to prevent criminal activity, however, the U.S. has created several regulations for sending money to overseas banking accounts.
U.S. Patriot Act
In 2001, the U.S. federal government created the "2001 Strategy" as a measure to combat the increasing money laundering activities across the globe. These activities allowed individuals to create fictitious or unsubstantiated businesses in an attempt to send and circulate money to foreign banks. Section 311 of the U.S. Patriot Act regulates individuals with banking accounts that are connected to foreign banking accounts. Section 313 prevents the establishment of shell banks, or banks that have no physical existence. As such, sending money to "shell accounts" is considered illegal.
Annunzio-Wylie Anti-Money Laundering Act of 1992
Wiring money to international bank accounts is another way of sending money to a foreign bank account. The Annunzio-Wylie Anti-Money Laundering Act of 1992 was created to monitor the wiring of money to international banking accounts. The law requires U.S. banks to keep accurate records on wire transfers to international (and domestic) banks of more than $3,000. Financial institutions that suspect money laundering or criminal activity are asked to file a "Suspicious Activity Report." As an incentive, the secretary of the U.S. Department of the Treasury grants immunity to cooperating banks.
Office of Federal Asset Control Laws
According to the U.S. Department of the Treasury's website, Office of Federal Asset Control laws prevent groups such as terrorists and drug cartels from accessing their assets and conducting trades. These laws date back to the War of 1812, when economic sanctions were placed on Great Britain. Under OFAC laws, individuals and groups may be placed on the "Specially Designated Nationals" list. As such, they are blocked ofrom retrieving their assets and U.S. citizens are not permitted to send money to them or have any relationship with them. U.S. financial instituions are also not permitted to engage in transactions with persons on this list. Before sending money to individuals in another country, it is adviseable to check the OFAC website (see Resources) to ascertain that they are not precluded from receiving money. Violations of these laws can result in fines between $10,000 and $50,000 and imprisonment up to 30 years for deliberate infractions.
