What is structuring in the context of BSA compliance?

Structuring, also known as smurfing, refers specifically to the practice of breaking up a large transaction into smaller amounts in order to evade the mandatory reporting requirements imposed by the Bank Secrecy Act (BSA). Financial institutions are required to report transactions exceeding a certain threshold, typically $10,000. By intentionally splitting funds into smaller amounts that fall below this reporting limit, individuals seek to avoid detection and scrutiny by regulatory agencies.

This tactic is often employed by individuals engaged in illicit activities to launder money or avoid regulatory oversight. It is a deliberate attempt to circumvent compliance obligations and can lead to serious legal repercussions for both the individual conducting these transactions and the financial institutions that may unknowingly facilitate them.

While making large deposits at multiple locations or using different financial institutions for each transaction can still raise red flags, these actions alone do not fully capture the strategic intent behind structuring. Transferring money overseas, while it can be part of broader attempts to launder money, does not specifically define the act of structuring within the BSA context.