International wire transfer regulations: Rules you should know


 

If you need to make or receive an international payment, you’ll want to know the laws on sending money abroad and how they may impact you. This guide to international wire transfer regulations covers common questions like: 

  • Is there a limit on international wire transfers?
  • Do I need to report high value international wires to the IRS or other agencies?
  • What are my rights when sending money overseas?

We’ll also cover how to make low cost, safe international payments with TransferWise. Let’s get started.


What documents do I need to send money abroad?

Finance is a highly regulated area. Banks, money service providers and other organizations are required to comply with a complex set of rules and legislation, which is designed to stop fraud, money laundering and funding of illegal activities. 

One of the key duties of banks and payment providers is to check on the identity of people making payments, including wire transfers. Although different institutions might implement the rules in slightly different ways, this usually means you’ll need to provide the following when you send money abroad:

  • A government issued form of identification
  • Proof of address
  • Your social security number (SSN)

For high value international payments - or to comply with the law in the country you’re sending a wire to - you may also need to show proof of the source of funds, provide documentation such as receipts if relevant, and give a reason for the transfer.

International wire transfer limit

Monitoring international payments - and protecting the rights of consumers sending money overseas - is the responsibility of the US Financial Crimes Reporting Network (FINCEN). FINCEN enforces the Bank Secrecy Act, which requires banks and money service businesses to retain and report information about international wire payments. 

FINCEN doesn’t actually put a limit on the amount individuals or businesses can send overseas. Instead, there are reporting requirements for the bank or transfer service provider, which mean that information needs to be collected about payments from USD3,000 and upwards.

All that said, you’ll likely find your own bank or chosen money transfer provider has limits on the amount you can send overseas. These limits can be per transaction, per day, or per month for example - and may vary depending on where you’re sending to.

Rules for making an international wire transfer over 10000 USD

The rules governing some types of payments are different when dealing with values of USD10,000 or above. For example, you usually need to make a declaration if you travel abroad with more than the equivalent of USD10,000 in cash or other things which could easily be converted to cash like travelers checks. Service providers must also report activities including cash-in or cash-out to a value of over USD10,000 per day so that this can be checked for money laundering or other suspicious activity.

If you’re making a larger international wire payment, your service provider may ask for more information about where the money has come from and where it is going to. This is to help them fulfil their legal requirements and to check that no payments are being made for illegal purposes.

Most of the reporting duty falls on the bank or transfer service provider. However, if you’re sending or receiving large international payments, it’s worth checking out your own responsibilities too. We’ll cover this in general terms in a moment - but you may need to take professional advice if you’re unsure about what your obligations are.

International wire transfer reporting requirements

Your bank or chosen service provider will be able to guide you through the process of making an international wire transfer. Ask a service agent if you have any specific questions about limits or reporting requirements for your payment, as these will vary according to the exact type and value of payment you’re making.

For sending money 

If you’re sending money internationally, your bank or the money transfer service you choose will normally be responsible for making any legally required reports, or retaining information about your transfer. 

For receiving money

If you’re receiving a payment to an account in the US or abroad, you may have some reporting responsibilities depending on the exact situation. For example, if you’re receiving money to an account in your name held overseas, you may need to file a report with the IRS, known as FBAR. This is required if you hold the equivalent of USD10,000 in a foreign bank account at any point in the calendar year.

It’s important to understand your own obligations when it comes to reporting foreign payments or funds held in overseas accounts. Take legal advice if you need it, to make sure you’re clear on your duties.

Save money on international payments with TransferWise 

Before you arrange your international payment, take some time to find the service which best suits your needs. Sending money overseas with your bank might seem like the natural choice, but can actually work out more expensive than using a specialist service like TransferWise.

TransferWise uses the mid-market exchange rate for all payments, with no markup and no hidden fees. This makes it easy to see exactly how much you’re paying for your transfer, and how much your recipient will get in the end. You’ll be able to arrange your international transfer online and have it delivered to your recipient’s account directly for convenience - it couldn’t be simpler.

What are your rights as a consumer sending money overseas? 

The Consumer Finance Protection Bureau is in charge of making sure customers are protected when sending money overseas. There are rules in place to make sure you know the fees and exchange rates which will be applied to your transfer before you go ahead, and a protocol to follow in case of a problem.

Under these rules, you should be told a few things in advance of making your payment:

  • The exchange rate which will be applied
  • The fees - although there are a few costs which can not always be confirmed before the payment it processed
  • The amount your payment is costing overall, and the amount your recipient will receive

If you make a payment in error, you should have up to 30 minutes to cancel it - as long as it has not already been collected by the recipient. And if there’s a problem and you want to make a complaint, you can do so within 180 days of the payment being arranged.

Sending money overseas can seem complicated - especially if it’s a large value transfer. However, it shouldn’t be difficult to set up your payment, and the bank or service provider will usually take care of most of the reporting required to stay in line with the law.

To make sending money overseas easy, and save on fees, check out TransferWise.