International Money Transfer Laws

by lilycarter01 on August 25, 2012

People working overseas need to be able to send their earnings back home to their loved ones. Banks and money transfer companies allow citizens to transfer money between states and countries. Strict regulations are required especially for international money transfers as sensitive information and huge amounts of cash are involved. Transfers need to be monitored to prevent illegal transfer of funds and money laundering. To prevent transfer of laundered money to offshore untraceable accounts, countries have placed stringent transfer rules.

Money transfer companies and banks also have strict laws to protect all parties involved in transferring money internationally. Recent terrorist attacks and scandals that saw famous banks transferring funds to terrorist organizations have led to the laws becoming more stringent. America passed the Patriot Act that allows the government to track money more carefully in response to the 9/11 terrorist attack. People wanting to transfer money need to keep in mind the following requirements and international transfer laws to prevent delays and cancellations.

Identity Proof

The law requires people to show proof of identification while transferring money through banks or money transfer services. Unlike domestic money transfer, photo identification is needed for international money transfers. The documents usually required to establish identity are valid driver’s license, passport, etc. along with proof of address. Sometimes banks and money transfer services will forego this procedure if the person already has an account with the institution as proof of identification was given when the account was opened. Online money transfer rules are stricter. Money transferring organizations will require additional documents and will also conduct a phone verification if money is transferred over the internet.

Rules for Online Transfer

Although online money transfer is convenient and quick, it is also vulnerable to security lapses. Most money laundering scams are accomplished online and hence money transfer services and banks have become stricter when it comes to online transfers. Firstly, one has to set up an account and only after that account has been verified can he/she transfer money online. Most importantly, the recipient must collect the money in person. Money transfer services and banks will not transfer it to the recipient’s account. Recipients are required to collect money in person for legal and verification purposes. Individuals sending and receiving money are recorder and tracked by their transfer control numbers.

Storing User Data

By law, banking institutions and other money transfer services must record all relevant information about each wire transfer. Information such as the sender’s name and address, transaction amount, receiver’s name and address,bank details, transfer number and transaction instructions. This allows money transferring organizations to keep a track of all the transfers.

Transfer Amount Limit

Financial institutions, which allow people to transfer money internationally, have set maximum limits to the amount of money that can be transferred. This is done to prevent money laundering. Online transfer limits are much lower as it is more unsafe and harder to regulate. The amount that can be transferred through actual locations is much higher. People can make multiple transfers if needed. Most institutions questions transfers of more than $1000. Such transfers are allowed only after the reason for the transaction has been verified. Few institutions allow money transfers up to $3000. As an additional safety measure, most banks do not accept cash as a method of payment for money transfers. Also, money transfer agencies and banks are required by law to charge a fee for transferring the money. People can transfer money only if they have paid this fee.

Lily is an expert associated with Money Transfer, a leading company offering reliable solutions to individuals seeking to transfer money to Australia, India, Canada, etc. Their website offers up-to-date exchange rates and currency comparisons.



Lily Carter is a writer who represents Toronto divorce lawyers and family lawyers, Shulman Law Firm.

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