What does "structuring" refer to in BSA compliance?

"Structuring," in the context of BSA (Bank Secrecy Act) compliance, refers to the practice of breaking up large cash amounts into smaller transactions to avoid detection and reporting requirements. Financial institutions are required to file Currency Transaction Reports (CTRs) for any cash transactions over a certain threshold (currently $10,000). By structuring transactions in smaller amounts, an individual or entity attempts to evade this reporting requirement, thereby avoiding triggering suspicions that could lead to further investigation into the source of the funds. This practice is often associated with money laundering and other illicit financial activities, making it critical for financial institutions to be vigilant in identifying and reporting such behavior in compliance with the BSA.

This understanding of "structuring" is essential for institutions to fulfill their anti-money laundering (AML) obligations effectively, as it helps them identify potentially suspicious activities that could indicate illegal operations. Monitoring for structured transactions is a key aspect of a comprehensive BSA compliance program.