ICAEW SE · Chapter 8 · Question 12 of 18
Money laundering is often described in three stages: placement, layering and integration. A criminal moves illegally obtained funds through a series of transfers between bank accounts in different countries to hide their origin. Which stage does this represent?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: D) Layering
Explanation
Placement is introducing criminal cash into the financial system. Layering involves complex transactions designed to disguise the source of the funds and break the audit trail, such as multiple international transfers. Integration is when the funds re-enter the legitimate economy, for example through property purchases, appearing to be legitimate.
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