The U.S. Government is requiring banks "to grill" U.S. Expats to find out the reason why they are sending money out of the country to EC via wire transfer.
This is one of the sobering items for wire-transfer candidates to think about, that the Loja Welcome Center has just shared with us. As the LWC commentary appeared originally on possibly a less-viewed thread ("Questions before we start our visit..."), I am posting aspects of it on this new thread.
Under the (U.S.) Tax Compliance Act called FATCA, your U.S. bank can withhold 30 percent of the money you're attempting to wire-transfer to Ecuador if the receiving EC bank is deemed to be non-compliant with FATCA. Then it's up to YOU to recover the 30 percent from the IRS. 
(Source: Loja Welcome Center)
The LWC article also warns against keeping large amounts of money in any account connected with a debit card; better to keep it in a savings account.
For more guidance -- and to learn about the problem with getting money OUT of Ecuador -- visit the Loja Welcome Center "money" page at: lojawelcomecenter.com(forward slash)daily-life-in-loja-ecuador.html#money
U.S. Expats Will Be "Grilled" As To Why They Are Wiring $$$ to Ecuador
One can go on the IRS Website to find which financial institutions in Ecuador are FATCA compliant. The list is updated every month. A few months ago there were about 20 institutions listed. If 30% is withheld it is treated like federal income tax withholding on a W-2 on the annual form 1040 filing, so if you normally do not owe tax you will get all the withholding returned in the form of a tax refund. You just gave the IRS an interest free loan by using a non-compliant bank..
So if wiring larger amounts of money to Ecuador is a problem, what's an alternative...
The simplest, easiest way to get money into Ecuador is to carry it in on your flight, suggests the same Loja Welcome Center (LWC) article.
Up to 10K is permitted to be brought in without filling out paperwork.
However, this presents three kinds of problems:
-- Bulk. Since $50 and $100 bills are not readily accepted in Ecuador, it can get bulky carrying in smaller bills if the total amount is substantial.
-- Theft considerations. Carrying large amounts of money in Ecuador is not advised.
-- Security. If you're wearing a money belt or have security pockets sewn into your clothing, there should be no metal parts and you should avoid full body screening. (Loja Welcome Center).
LWC suggests this: have each person carry in 2-3K on their person, and use debit cards to get more cash after EC arrival.
Not sure how banks are grilling people about $$$ being wired to other countries. I wired $1300 and two weeks later $1500 to the Philippines and nobody never asked me nothin no how.
The simple solution is to limit yourself to amounts under $10K where there are no questions asked regardless of where in the world you're taking the funds. You don't need to take cash by any means. You can take part in cash, part in the form of ATM withdrawals, a bank draft or Cashier's Check can be deposited easily in most countries. As long as the transactions are under $10K there is no paperwork involved.
You probably stand a greater chance of getting stopped and detained by some redneck cops (who've undergone Desert Snow or Black Asphalt training) on an Interstate Highway in the USA trying to violate your civil rights and search your car for money that they can confiscate.
James wrote:The simple solution is to limit yourself to amounts under $10K where there are no questions asked regardless of where in the world you're taking the funds. .
Unless you send $9,000 multiple times, then it is viewed as sending more than 10k in installments and then the "grilling" starts.
[moderated: could you please avoid duplicate post]
I went through this when I wired 30k to Ecuador. The bank simply refused to give us access to the funds until we sat down with the bank manager and showed him my tax records to prove we were not laundering money or dodging taxes. After that, we've had no problems.
James wrote:You probably stand a greater chance of getting stopped and detained by some redneck cops (who've undergone Desert Snow or Black Asphalt training) on an Interstate Highway in the USA trying to violate your civil rights and search your car for money that they can confiscate.
This is no hyperbole. This stuff happens. They can "arrest" your money, and good luck getting it back.
I didn't carry large sums in my car back in the USA days, but on more than one occasion in recent years, I got pulled over and cops lacking probable cause pressed me to allow a search of my car.
Some particularly objectionable officers in Jefferson County (metro Denver) kept asking me to let them do such a vehicle search, instead of helping me find my way (the reason I had pulled over and was looking at a map in the first place).
When each of them asked me why I was refusing the search, I didn't try to engage them in a discussion about Constitutional rights and unreasonable search-and-seizure. I just no-commented.
Eventually, they let me go. I used their business cards to call their police station and complain to the sergeant an hour later.
cccmedia
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