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I have an uncle in China who is trying to make some investments in Canada. As you may know, there are foreign exchange controls in China, but everybody goes around them. One easy to do it is to match up money coming into China with money going out of China.

I'm trying to help him move the money out (+$1 million USD). It seems the transaction would need to go through my Hong Kong bank account. I would then need to wire it back to the US into my US account. Then to the project.

Would helping him this way violate any US laws?

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    You already note that this violates Chinese law, so are you only asking here about U.S. laws it may violate? – feetwet Nov 2 '16 at 14:06
  • That is a lot of money. Why are you seeking the advice of random strangers on the internet instead of just hiring an expert? – mikeazo Nov 2 '16 at 14:20
  • too little money to hire an expert... if I was moving $100 mm i probably need a lawyer... and @feetwet ... please find me any body that actually follows chinese law (especially government officials) and I will do the same... i can find plenty of people that abide by US law... therefore i follow them... – jason Nov 2 '16 at 14:38
  • @ feetwet ... and I'm not sure if it is actually violating Chinese laws, because money can come out, it's just it comes out every year at an increment of $50k USD a year for personal use. There are other ways Chinese people go around the law so they are not "violating" them... by structuring investments differently and going through other channels... but it's just all cost of doing business. It doesn't matter, the money will come out, the question is cost. All I want to know is am I violating any US laws. – jason Nov 2 '16 at 14:54
  • If US $1.000.000 is "too little money", the cost of the expert will be like the lint in your pocket... Specially, if you compare it with the possible consequences of doing it wrong – SJuan76 Jan 1 '17 at 18:39
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As long as you don't lie in the course of these transactions, and you comply with U.S. tax rules, you will not be breaking any U.S. laws.

If you do something like this in your personal accounts you will have personal reporting liabilities to the IRS. (Though if you have a Hong Kong bank account you already have that obligation.) The IRS may demand more information, and you may have a tax liability depending on how you explain the source of the funds. An accountant could detail all of the IRS and tax implications.

When you tell your U.S. bank that you want to wire in a large sum from an off-shore personal account they will alert you to whatever "anti-money-laundering" requirements would apply. (AFAIK those are just reporting requirements on their end.)

  • Yes, over 10k will cause a transaction report to be sent to the US Treasury FinCER. If they feel like something is off, or if you cancel the transaction, they must mark the report as suspicious. – aidanh010 Dec 20 '16 at 20:52

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