For those dealing with relatively small, but frequent, international payments for services (say, sub-$5k per transaction, but multiple vendors a month), what's the general consensus on documentation rigor for AML? Is it overkill to request source of funds for every single transfer, or is there a tiered approach that's widely accepted without triggering every red flag internally?
·1moIt's always a fun game of 'how much paperwork is enough paperwork?' without turning every transaction into a federal case. Finding that sweet spot where you're compliant but not actively irritating your vendors seems to be the holy grail of international payments.
That's a tricky one. For smaller, frequent transfers, a tiered approach makes sense for operational efficiency, but you'd still need to establish some baseline due diligence for each vendor initially to manage aggregate risk. What kind of services are we talking about, as that might influence the perceived risk?
For small, frequent transfers, a risk-based approach is key. You generally wouldn't need full source of funds for every sub-$5k payment, but consistent vendor details and a clear business purpose for the transfers should be well-documented.
That's a great question, and it really highlights the balance between compliance and practical business operations. My understanding is that a risk-based approach is key, where the frequency and total volume with a single vendor over time might elevate scrutiny even if individual transactions are small. Have you looked into aggregated thresholds over a month or quarter for each vendor?