Article summary
Before you wire money overseas from the US to another country, or receive money via an international wire transfer, it’s handy to know the rules and regulations. You wouldn’t want to disappoint friends or family if something went wrong or face a fee you hadn’t expected.
In this article, we’ll cover everything you need to know. From the legal documents you need to wire money overseas, to what rights you have under international wire regulations.
Sending money abroad is a great way to show loved ones you care. After reading this article, you’ll be able to do so smoothly.
In this article
- What legal documents are needed to wire money overseas?
- Is there an international wire transfer limit?
- What are the international wire transfer reporting requirements?
- What rights do I have under the international wire regulations?
- Are there penalties if I don’t follow the rules?
- FAQs and guides
What legal documents are needed to wire money overseas?
International wire transfers involve the electronic transfer of funds between two people in different countries. This is done through a network administered by banks and agencies around the world.
To make an overseas wire transfer, you need to be aware that there are a number of security checks, documents, and potential limits on how much you can send to factor into sending funds abroad.
Banks and providers of money transfer services are required by law to comply with strict rules designed to stop criminal activity, such as:
- Fraud
- Money laundering
- Funding illegal activities.
For high-value money transfers, you may be required to show:
- Proof of funding source
- Documentation, e.g. receipts
- A reason for the money transfer.
You may need some of the following too:
- A government-issued ID – e.g. your driver’s license or passport
- Proof of address – e.g. a recent bank statement or utility bill
- A valid Social Security Number (SSN).
The exact information you need to provide varies depending on the amount of money you want to send and which country the funds will go to.
Is there an international wire transfer limit?
There isn’t an official international wire transfer limit when you send money from the US overseas.
Instead, banks and money transfer services decide their own limits, and these vary depending on the nature of each wire transfer and the receiving method. Some may limit you to a set amount per day, for example.
In the US, the monitoring of international payments and protecting consumer rights when sending money overseas is done by the Financial Crimes Enforcement Network (FINCEN). This organization enforces the Bank Secrecy Act, which obliges money transfer businesses and banks to retain and report certain international payment information.
FINCEN doesn’t limit the amount that can be sent overseas, but it requires banks to collect information on payments from $3,000 upwards.
What are the international wire transfer reporting requirements?
International wire transfer reporting requirements differ when dealing with large amounts of money.
If you travel abroad with more than the equivalent of $10,000 in cash or the equivalent in travelers’ checks, you normally need to make a declaration.
Banks and other money transfer providers must also report cash-in and cash-out to the value of more than $10,000 per day, so checks can be made on wire transfers for suspicious activity such as money laundering. This comes under the Bank Secrecy Act – also known as the Currency and Foreign Transactions Reporting Act.
This law requires US financial institutions to assist the government with the detection and prevention of money laundering.
If you want to wire money internationally, the money transfer service or bank you choose is normally responsible for making legally required reports or retaining any transfer information.
If you are receiving a payment to an account in the US or overseas, you may have some reporting responsibilities, however. For example, declaring money in an overseas account in your name is required if you have the equivalent of $10,000 in it at any point in a calendar year. This involves filing a Report of Foreign Bank and Financial Accounts (FBAR) with the IRS.
What rights do I have under the international wire regulations?
The rules are not just there to prevent criminal activity – they’re to protect consumers too.
After the financial crisis of 2008, the government passed a reform program to decrease risk in the finance system. The Dodd-Frank Wall Street Reform and Consumer Protection Act was passed in 2010 and covers a wide array of activities and agencies, including Wall Street trading regulations and basic protection for consumers.
The Consumer Financial Protection Bureau (CFPB) was created in the wake of this Act, with the aim of delivering transparency and fairness to help protect consumers. Among its tasks is the overseeing of all international money transfers over $15.
According to the CFPB, consumers have the right to see any costs involved before using a bank or money transmitter, including:
- Amount of money transferred
- Exchange rate to be used (however, banks and money transfer providers aren’t required to reveal any profit they make from rates)
- Some transfer fees
- Taxes that the provider collects
The sum total expected to be sent overseas (but there is no requirement to include fees or taxes deducted at the receiver’s end).
Are there penalties if I don’t follow the rules?
Failure to follow the rules for international wire transfers can lead to a number of penalties. Your wire transfers may be cancelled to begin with.
Non-disclosure of accounts overseas may result in an investigation by the IRS, an audit of tax returns or even a criminal investigation. Non-disclosure of financial assets can result in fines of up to $10,000, with additional $10,000 fines every 30 days after that.
Civil or criminal repercussions can also include:
- Fines
- Restitution orders
- Incarceration.
To avoid penalties, make sure you comply with all necessary laws at each stage of the wire transfer process.
FAQs and guides
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