International Payments, Remittances, and Foreign Currency Services for Individuals
Individual and payment items test remittance channels, the individual foreign exchange allowances, and the documentation a bank must see. Questions often turn on the annual limit and on prohibited structuring.
Payment channels and allowances
Outbound remittances run through foreign exchange banks and correspondent banks, typically by SWIFT messages; the beneficiary is identified by account, name, and bank BIC. Individuals may use a basic travel allowance for trip expenses and an annual simplified remittance ceiling for payments not requiring prior proof; the commonly applied figures are USD 10,000 per trip for travel and USD 50,000 per person per year for undocumented remittances, with supporting documents required above them. Overseas study, medical treatment, and gifts to non-residents have their own documentation rules.
Worked example
An individual remits USD 60,000 for a child's tuition. The first USD 50,000 can be processed within the annual simplified ceiling if the bank's checks are satisfied; the remaining USD 10,000 needs proof such as an admission letter and tuition invoice, and the bank records the purpose. The payment should not be split into several smaller remittances through different banks to stay under the ceiling - that is structuring and is reportable.
Traps
- Treating the annual ceiling as a per-transaction limit.
- Assuming the allowance is per bank rather than per person.
- Using another person's allowance to send funds abroad.
- Forgetting that purpose and supporting documents still apply within the limit.