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Indicators of the Misuse of Informal Value Transfer Systems in Terrorist Financings

While the majority of IVTS activity is legitimate in purpose,12 some of these systems have been used to facilitate the financing of terrorism. The very features that make the systems attractive to legitimate customers ? efficiency, convenience, trust, speed, anonymity, and the lack of a paper trail ? also appeal to terrorists and terrorist organizations. Also, criminals use the networks to launder dirty money, make illicit payments, and commit other offenses such as tax evasions and customs violations.

The following activity may be suspicious and indicate misuse of IVTS.

Transactions divergent from the normal activity (or expected low income) of a business entity or customer including:

  • sudden influxes of activity and/or unexplained funds deposits; high volumes of financial transactions in comparison with those of other same scale businesses located and operating in the area (e.g.,
  • grocery stores; travel agencies; boutiques; import/export businesses; shipping and trading companies; restaurants; jewelry stores or businesses; textile stores or businesses); or
  • large and/or mixed deposits of cash and monetary instruments, inconsistent with the expected type of transactions for the business.


Unusually high levels of cash shipments detected in conjunction with a small business operation;
Transactions involving unusual business trade connections (e.g., small scale auto parts dealer sending aggregate wire transfers to a precious metal dealer or agricultural importer);
Separate (or lack of) records kept for certain clients and/or large transactions;
Account activity involving only deposits and one-way wire transfers;
Varying methods of funds delivery and/or collection;
Unusually high volume or patterns of incoming express/priority mail.
Many uncertainties and complex issues are associated with this segment of the financial industry, and additional indicators of suspicious activity may be identified in the future. The Treasury Department will, therefore, work closely with law enforcement, regulators, and the financial community to gain a complete understanding of these informal networks and how they interact with the more formal financial industry.

Excerpted from SAR Activity Review Issue 5, page 18

First published on 02/01/2003

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