The Process Of Money Laundering

This chapter focuses on the process of money laundering, which is generally seen as a three-stage process consisting of placement, layering, and integration. The placement is the initial stage of the process during which the illegitimate funds obtained in some way, needs to be placed initially into the banking system to commence the money-laundering process. The initial placement purely means moving the funds from their original cash source into some other form, which would enable the money launderer to undertake further layering and therefore disguise these amounts. The objective of the layering phase is to disguise the proceeds of crime such that the original source and the current position of the funds are unclear. In more complex schemes, the money launderer would move the funds between a number of accounts in a number of different jurisdictions and through a series of companies to ensure that the trail is as complicated as possible. Integration phase is the final stage of the money-laundering process during which illegal proceeds are re-integrated into a legitimate financial system to be assimilated with other assets in the system.