Transferring Funds Internationally

Transfering Funds Internationally


U.S. Treasury Regulation through OFAC

International transfers involving the United States are subject to monitoring by the Office of Foreign Assets Control (OFAC), which monitors information provided in the text of the wire and then decides whether, according to the US Government's federal regulations and political positions, money is being transferred to terrorist groups, or countries or entities under sanction by the United States government. If a financial institution suspects that funds are being sent from or to one of these entities, it must block the transfer and freeze the funds.

OFAC regulates transfers to sanctioned countries, and specifically identified individuals. Money not involved with a sanctioned country or individual is not restricted, although transfers of $10,000 or more must be documented and reported. The bank or provider must keep such records for a period of 5 years. 31 CFR §501.601

Neither Jordan nor UAE are on the US sanctions list, thus any amount of money may be transferred from these countries to the U.S.


Carrying Funds Physically


There is no limit on the amount of money that can be taken out of or brought into the United States. However, if a person or persons traveling together and filing a joint declaration (CBP Form 6059-B) have $10,000 or more in currency or negotiable monetary instruments, they must fill out a "Report of International Transportation of Currency and Monetary Instruments" FinCEN 105 (former CF 4790).

If assistance is required, a Customs and Border Protection (CBP) Officer can help with filling out the form.

Please be aware, if persons/family members traveling together have $10,000 or more, they cannot divide the currency between each other to avoid declaring the currency.

For example, if one person is carrying $5,000 and the other has $6,000, they have a total of $11, 000 in their possession and must report it on a FinCEN 105. If a person or family fails to declare their monetary instruments in amounts of over $10,000, their monetary instrument(s) may be subject to forfeiture and could result to civil and criminal penalties.

The FinCEN 105 can be obtained prior to traveling or when going through CBP.

http://www.fincen.gov/forms/files/fin105_cmir.pdf

Source: USCBP 
https://help.cbp.gov/app/answers/detail/a_id/195/related/1/session/L2F2LzEvdGltZS8xNDI3MTU5MTQ5L3NpZC96RWlzVjNpbQ%3D%3D/~/what-must-be-declared-when-entering-the-u.s.


No Duty On Funds

Customs and Border Protection (CBP) does not collect duty on currency. However, travelers leaving or entering the U.S. are required to report negotiable monetary instruments (i.e. currency or endorsed checks) valued at $10,000 or more on a "Report of International Transportation of Currency or Monetary Instruments" form FinCEN 105.

You can obtain the form in advance and download it from here FinCEN 105, or a CBP Officer can give it to you upon your departure or return to the U.S.

Failure to declare currency in amounts of over $10,000 can result in its seizure.

Information on the FinCEN 105 is provided to the Internal Revenue Service (IRS), and they determine whether or not the importation of monies constitutes income subject to taxation.

The requirement to report currency on a FinCEN 105 does not apply to imports of gold bullion.


Electronic Transfers

Basics

Fed Wire

Domestic wire transfers are carried out by the Federal Reserve Wire Network, commonly known as Fed Wire, and is a part of the Federal Reserve Bank System. Banks that are a member of the Federal Reserve (not all banks are Federal Reserve members) use Fed Wire to make domestic funds transfers for their customers. Funds transfers through Fed Wire are immediate, and are guaranteed as final payment as soon as the receiving institution is notified that the funds have been credited to its reserve account at a Federal Reserve Bank. Notification usually happens almost simultaneously with the funds transfer.

Fed Wire funds transfers are governed by Federal Reserve Regulation J.

CHIPS

Think of the Clearing House Interbank Payments System (“CHIPS”) as basically the international version of Fed Wire. However, the two systems are not related. CHIPS is operated by the New York Clearing House Association, and balances are settled at the end of each business day by net adjusting entries to each bank’s account at the Federal Reserve Bank of New York.

CHIPS funds transfers are not governed by Regulation J but rather are governed by the CHIPS Operating Rules.

SWIFT

Most international transfers are executed through SWIFT. The Society for Worldwide Interbank Financial Telecommunications (“SWIFT”) is a non-profit member-owned cooperative association of over 9,000 banks worldwide. SWIFT is not a funds transfer system but rather an interbank communications system that was developed in 1973 for the purpose of providing a standardized, quicker and more efficient means of sharing financial information between financial institutions around the world. A SWIFT message is an advice or an instruction for a bank to transfer funds from one account to another; so for example, a funds transfer might start out as a SWIFT message for a certain bank to transfer a certain amount of funds from one account to another account, and then the bank receiving the SWIFT message would use Fed Wire or CHIPS to make the transfer.

Banks in the United States use SWIFT to send messages to notify banks in other countries that a payment has been made. Banks use the CHIPS or Fedwire system to actually effect the payment.

SWIFT communications and payment orders are governed by the SWIFT Operating Rules.

ACH

The Automated Clearing House (“ACH”) system is an electronic funds transfer clearing and settlement system. ACH payments often are used as substitutes for check payments such as mortgage payments, government benefits payments, employee retiree benefits payments, and other business-to-business and business-to-individual payments. Net settlement adjustments for ACH payments are made against reserve accounts at Federal Reserve Banks.

ACH transfers are governed by the National Automated Clearing House Association (“NACHA”) Rules.

Electronic Funds Transfers

Electronic Funds Transfers (EFTs) by consumers (not businesses) are governed by the Electronic Funds Transfer Act that was passed in 1978 to comply with Federal Reserve Regulation E, and covers several different funds transfer means:

Cardholder-initiated transactions, where a cardholder makes use of a payment card, such as at an ATM or a point of sale device (such as swiping a credit card).

Payments or transfers that are originated by or through a telephone or computer (online bill payment), electronic terminal, or magnetic tape.

Direct-deposit payroll payments for a business to its employees, including payments by a payroll services company.

Direct-debit payments, also known as electronic checks, that debit a consumer's bank account to pay for goods or services.

Electronic online bill payment which may be by EFT or by check.

Stored value card transactions.

Electronic Benefits Transfers.

EFTs and Reg E do not include wire transfers such as through Fed Wire or CHIPS.

EFTs are not regulated by the Uniform Commercial Code which covers consumer payments made by negotiable instruments such as checks and drafts.


Primary Methods for International Transfer of Funds

1. Cashier's Check drawn on bank with international offices

Go to bank that has offices overseas and in the U.S. Purchases a cashier's check in the overseas bank, bring it to the U.S. and cash the check in a U.S. bank location.

2. Bank Wire Transfer

Go to the overseas bank where you have your money. Request a bank wire transfer to a U.S. bank account. Provide the U.S. bank information: bank name, routing number, account number, and amount to transfer. Most banks charge a fee for this service.

Banks such as Barclay's, Royal Canadian, and Lloyd's offer these types of services.

3. Money Wire

Similar to a Bank Wire Transfer, but not done through a bank. 

One of the largest companies that offer wire transfer is Western Union, which allows transfer of money without an account with Western Union or any financial institution.

There are other companies in Wire Market: RIA Financial Services, MoneyGram and VFX Financial PLC and LCC Money Transfer (both based in Europe) as well as Azimo, Dwolla, TransferGo and TransferWise.

4. On-line Payment Provider

Open an account with an on-line provider, such as PayPal. Transfer funds into the Provider account (much like a virtual bank), then have the provider transfer funds to another account in the U.S.


NOTICE

This article is based on the legal authorities currently available and known US Dept. of Treasury practices. Laws depend on implementation and policies of various governing agencies. Agencies may change policies and practices at anytime. This article is provided for information purposes only, may not be construed as legal advice for a particular situation, and does not establish an attorney-client relationship.

last update February 2015


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