Structuring is a common technique used by money launderers to avoid threshold transaction reporting. Where there is an intention to conduct a transaction involving A$10,000 or more in physical currency, the technique of ‘structuring’ is used to deliberately avoid a threshold transaction report being submitted to AUSTRAC by splitting the transaction into a number of smaller, separate transactions which fall below the $10,000 threshold.
Structuring is a criminal offence. If you suspect that a customer is structuring or attempting to structure their transactions to avoid reporting, you must submit a suspicious matter report (SMR) to AUSTRAC. An SMR is only reportable in circumstances where you suspect on reasonable grounds that the ‘sole or dominant purpose’ of splitting of the transactions is to avoid reporting requirements.
Example 1: Multiple bank deposits – SMR required
Cerise visits Cedar Bank and deposits $4,000 cash into her account. Later that same day, she returns to the bank and deposits a further $7,000 in cash. The next day, she returns to Cedar Bank and purchases a bank cheque with $6,500 cash and deposits another $9,000 cash into her account. A review of Cerise’s previous transactions and her known sources of income reveals that it is derived primarily from social security payments. Cedar Bank applies enhanced customer due diligence measures that involve collecting additional information and undertaking additional verification.
Cedar Bank suspects Cerise is structuring her transactions to avoid the TTR requirements and submits an SMR to AUSTRAC.
Example 2: Casino gaming – SMR required
Ivan attends the Universal Casino where he is a loyalty club member, and uses cash to purchase $8,000 in gaming chips at the casino cage. He then goes to a blackjack table and exchanges another $8,000 cash for gaming chips.
After a short period of playing blackjack, his total balance of gaming chips has increased to $17,500. Ivan decides to redeem a portion of these chips. He cashes in $8,500 of gaming chips at the table and then proceeds to the casino cage where he cashes the remaining $9,000 of his gaming chips.
Universal Casino’s transaction monitoring program identifies a change in Ivan’s gambling activity and seeks to reconcile the transactions with his gambling activity. A closer review of Ivan’s gambling activity indicates that he has engaged in structuring. Universal Casino submits an SMR to AUSTRAC with a description of Ivan’s behaviour and the grounds for suspicion.
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