Can you explain AML stages?

3 stages are PLACEMENT, LAYERING & INTEGRATION

PLACEMENT is the initial entry of the dirty money in the financial system like changing currencies, gambling, repaying something.

LAYERING would be moving there money to different financial system, They would deposit there moneys to different accounts, send to different people, invest in stock markets, buy some bonds etc

INTEGRATION is the final stage where there dirty money comes back to them clean and they would now invest it buy properties, cars etc.

There are three stages to the Anti-Money Laundering Process:

Placement, Layering and Integration:

Placement is the most critical stage of the laundering process, as attempts are made to place the illicit funds into the financial system,  the individual will go to a financial institution and make attempts to deposit the funds, if they are successful, the other stages become easier.  Smurfs/structuring can also be used to place the funds into the financial system, a robust onboarding procedure plus strong KYC principles will prevent or provide alerts to any illicit placement of funds.

Layering: Layering takes place when attempts are made to mix up the source of the illicit funds by conducting multiple transactions, this will confuse the initial source of the funds and make it difficult to retrace the steps if investigated.

Integration: This stage is where the funds are integrated into the society, purchasing luxury items, opening a new business, at this stage the funds appear to be legitimate .

The stages of money laundering includes: , Layering & Integration

Placement

The placement stage represents the initial entry of the "dirty" cash or proceeds of crime into the financial system. Generally, this stage serves two purposes: (a) it relieves the criminal of holding and guarding large amounts of bulky of cash; and (b) it places the money into the legitimate financial system. It is during the placement stage that money launderers are the most vulnerable to being caught. This is due to the fact that placing large amounts of money (cash) into the legitimate financial system may raise suspicions of officials.

 Layering Stage

After placement comes the layering stage (sometimes referred to as structuring). The layering stage is the most complex and often entails the international movement of the funds. The primary purpose of this stage is to separate the illicit money from its source. This is done by the sophisticated layering of financial transactions that obscure the audit trail and sever the link with the original crime.

During this stage, for example, the money launderers may begin by moving funds electronically from one country to another, then divide them into investments placed in advanced financial options or overseas markets; constantly moving them to elude detection; each time, exploiting loopholes.

Integration Stage

The final stage of the money laundering process is termed the integration stage. It is at the integration stage where the money is returned to the criminal from what seem to be legitimate sources. Having been placed initially as cash and layered through a number of financial transactions, the criminal proceeds are now fully integrated into the financial system and can be used for any purpose.

There are many different ways in which the laundered money can be integrated back with the criminal; however, the major objective at this stage is to reunite the money with the criminal in a manner that does not draw attention and appears to result from a legitimate source. For example, the purchases of property, art work, jewellery, or high-end automobiles are common ways for the launderer to enjoy their illegal profits without necessarily drawing attention to themselves.

3 STAGES OF AML : 1) Placement - It includes Currency Smuggling,Bank Complicity, Currency Exchanges, Blending of Funds,Asset Purchase. 2) Layering - It includes Cash converted into Monetary Instruments & Material assets bought with cash then sold. 3) Integration  - It includes Property Dealing, Front Companies and False Loans, Foreign Bank Complicity & False Import/Export Invoices .

Placement layering and integration

There are three stages in AML - 1. Placement 2. Layering 3. Integration.

• Placement  - Disposal of cash in the financial system or by any other form
• Layering – Separating the illicit funds by creating complex layers in order to cover up the source of ownership of the funds
• Integration – placing back the laundered proceeds back into the legitimate source  

There are 3 stages in Anti Money Laundry (AML) are PLACEMENT, LAYERING & INTEGRATION

PLACEMENT is the initial entry of the dirty money in the financial system like changing currencies, gambling, repaying something.

PLACEMENT LAYERING AND INTEGRATION ARE THE THREE STAGES OF AML