The United States continues to be rated Partially Compliant with Recommendation 16 of the Financial Action Task Force (FATF), which governs the transparency and traceability of wire transfers. This recommendation requires financial institutions to include accurate originator and beneficiary information with all wire transfers and to take appropriate action if such data is missing. Although the U.S. has a mature financial regulatory system, longstanding gaps persist that prevent full alignment with FATF’s standards.

Main Shortcomings

The core deficiencies highlighted by the FATF relate to threshold-based application and limited verification requirements. The United States only applies Recommendation 16 requirements to wire transfers of $3,000 or more, meaning lower-value transactions are not automatically subject to the same level of scrutiny. Additionally, there is no explicit requirement to verify originator and beneficiary information below this threshold in cases where there is suspicion of money laundering or terrorist financing, which is a key FATF expectation.

The FATF also noted the absence of obligations for intermediary and beneficiary financial institutions to detect and take action when information is missing. Without such requirements, these institutions may unknowingly facilitate non-transparent transactions. Furthermore, money service businesses (MSBs), which play a significant role in U.S. cross-border transactions, are not explicitly required to use both ordering and beneficiary data to detect and report suspicious transfers.

Another issue is the lack of a clear mandate to include full originator and beneficiary details in the transmittal order, which undermines the travel rule’s effectiveness. This omission, coupled with threshold exemptions and fragmented implementation across institutions, continues to present risks.

Conclusion

Despite the United States' comprehensive regulatory infrastructure and its global financial influence, significant gaps remain in its approach to wire transfer transparency under Recommendation 16. The continued use of a $3,000 threshold, coupled with the absence of full verification duties and limited requirements for intermediary institutions, means the U.S. framework still falls short of FATF’s global standards. These gaps have resulted in the FATF maintaining a Partially Compliant rating, signalling the need for legislative and regulatory updates to bring the wire transfer regime into full compliance.