Anti-Money Laundering and
Countering the Financing of Terrorism

The nature of money laundering

Money laundering involves transforming money from crime ("dirty money") into money that (a) has the appearance of coming from a legitimate source, and (b) makes the criminal origin of the money difficult to trace ("clean money").

Effective money laundering enables criminals to remove themselves from their criminal activities, making it is harder to prosecute them, and confiscate their proceeds. Laundering money also enables criminals to enjoy the benefits of their crimes including investing their profits for future criminal activity.

There are three stages to laundering money:

1. Placement: placing cash proceeds from crime into the financial system. For example, depositing the cash proceeds in a bank.
2. Layering: splitting the criminal funds into various deposit accounts to hide their origin.
3. Integration: withdrawing the layered funds and bringing them back together in one account or multiple accounts so that they appear legitimate.