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money separately and above the $10,000 limit. In response to this situation,a clearinghouse company, Enforcement Compliance Officer, based in NewJersey, was created to share information from nearly thirty businesses aboutdaily transactions and to spot suspicious activities. This clearinghouseoperates independently from each company’s compliance system.The regulatory environment in Latin America is minimal. In somecountries, money transfer institutions and their distributor counterpartare required to hold a license. They are also required to report transfersabove $10,000. However, because most transactions are below $300, littlereporting occurs. Moreover, in some countries companies do not reportany kind of information about their business, nor are they required to doso. This situation not only adds to uncertainty about the amounts receivedand recorded by the Central Bank, but also raises risks of potential illicitactivities. A positive aspect in money transfers in Latin America andthe Caribbean is that outbound transfers are allowed and thus facilitateintraregional flows through licensed businesses.The regulatory system, particularly in the United States, has increasedmonitoring but also has increased costs for companies that provide trainingfor and implement oversight programs. Businesses are concerned not onlyabout increased operating costs but are also worried that the stringentidentification requirements for both senders and recipients will lead togreater utilization of informal services by individuals who would ratheruse an unlicensed business than provide extensive information.4. Sending Patterns in Latin America and the Caribbean308From the perspective of volume, remittances have experienced anoutstanding increase. The volume of these flows rose from less than $3billion in 1980 to $45 billion in 2004 (see Figure 2). The increase is owed toa number of factors that include reactions to economic downturns in LatinAmerica and the Caribbean, strengthened ties between the United States andLatin America, improved competition in money transfers, increased contactamong members in transnational families, and improved accounting of themoney received. For example, in 1980 only seventeen countries reportedflows on remittances; by 2004 the number was thirty. Even these figuresreported by Central Banks are considered to be conservative estimates.Remittance flows have had an economic impact in several of theseeconomies. The most important corridor from which remittances flow isthe United States, channeling over seventy percent of the money moving tothis region. However, in the past few years an increasing volume of money