Structuring

Structuring, also known as ‘smurfing’ refers to a specific money laundering technique used by criminals to avoid detection by authorities. This stage usually follows the ‘placement’ phase in the money laundering process.

Structuring involves breaking down large amounts of illicit funds into smaller, less suspicious transactions. The idea is to avoid triggering financial reporting thresholds and maintain a lower profile. Criminals using this method may make multiple deposits or financial transactions in amounts just below the reporting threshold required by financial institutions or regulatory authorities. By doing this, they aim to avoid raising red flags and making it more difficult for AML controls to detect their activities.

To combat structuring AML measures can be put in place. These involve close monitoring of transactions, the reporting of suspicious activities and adherence to AML regulations, which mandate that financial institutes report certain types of transactions to authorities, even if they are conducted in smaller amounts. Detecting and preventing structuring is essential to disrupt the money laundering process.