How it works
Remittance and mobile-money transfers between two countries are usually subject to per-transaction and periodic limits, reporting thresholds, and lighter checks on small values. Corridor structuring exploits these rules by sending a large sum as many small remittances, through multiple senders, recipients and providers, so that each transfer clears with little scrutiny.
It is used to launder proceeds, to evade exchange controls, to move funds for smuggling or informal trade, and in some cases to finance terrorism. Within SADC and other regional blocs, busy corridors such as those between South Africa and its neighbors carry heavy volumes of legitimate small-value remittances, which gives structured transfers plenty of cover.
The signal is in aggregation. One sender may use several providers, or many senders may fund a small number of recipients on the other side, so detection has to resolve people across names, phones and identity documents and follow both ends of the corridor instead of individual transfers.
Red flags
- Repeated transfers just below the per-transaction limit or reporting threshold in the same corridor
- Several senders, often sharing a phone, address or identity document, sending to the same recipient
- One sender using several providers, agents or wallets on the same day
- Recipients receiving from many unrelated senders and collecting the funds promptly
- Transfer volumes inconsistent with the sender's declared occupation or income
Signals the engine evaluates
- Aggregate value per sender, per recipient and per sender-recipient pair in a corridor across rolling windows
- Clustering of transfer amounts just below limits and reporting thresholds
- Senders and recipients that entity resolution merges across names, phone numbers and identity documents
- Corridor and counterparty jurisdiction risk, with sanctions and watchlist screening of both parties
Investigation and response
- 01Aggregate the activity of all resolved senders and recipients in the corridor to establish the true value moved.
- 02Review KYC and source of funds for the main senders, and the relationship between senders and recipients.
- 03Screen all parties against sanctions and watchlists, and consider exchange-control obligations where they apply.
- 04File a suspicious transaction report with the financial intelligence unit, such as the FIC in South Africa or FinCEN in the US.