What is Money Laundering? By Paul Renner C6 | KYCMap

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					  What is Money
   Laundering?


The Three Stages in
Money Laundering...
            BY


        Paul Renner
  C6 Intelligence | KYCmap
Money Laundering is the process of taking ‘dirty’ funds and converting it
into ‘clean’ funds.


‘Dirty funds’ are criminally-derived proceeds which are then converted into
other assets so that they can be reintroduced into legitimate commerce in
order to conceal their true origin or ownership – ‘clean funds’


There are three stages in money laundering:



                             Placement

                             Layering

                             Integration
1. Placement

Placement is the first stage in money laundering where the cash
proceeds of criminal activity enter into the financial system.
This is most critical stage for any money launderer as the criminal can
effectively mask his ‘dirty’ funds by commingling his ‘clean’ funds and
create an aura of legitimacy.
Examples of Placement include:

            Depositing into bank accounts via tellers, ATMs, or night
deposits

             Changing currency to cashiers checks, bankers drafts or other
negotiable instruments

            Exchanging small notes/bills for large notes/bills

            Smuggling or shipping cash outside the county




2. Layering


Layering is the second stage in money laundering where attempts are
made to distance the money from its illegal source through layers of
financial transactions.
Examples of Layering include:

           Sending funds to different onshore and offshore bank
      accounts

            Creating complex financial transactions

            Loans and borrowing against financial and non-financial
      assets
            Letters of credit, Bank Guarantees, Financial instruments, etc.

            Investments and investment schemes

            Insurance products




3. Integration

Integration is the third stage of money laundering. This stage involves the
re-introduction of the illegal proceeds into legitimate commerce by
providing a legitimate-appearing explanation for the funds.
Examples of Integration include:



            Buying businesses

            Investing in luxury goods

            Buying commercial property

            Buying residential property




As you can see in the graphic above, banking institutions are required by
money launderers to conceal their illegal funds and that is why it is
important that Know-Your-Customer (KYC) checks are done on
customers. In certain cases there may be a need for Enhanced Due
Diligence (EDD) on clients.
Money laundering can’t happen without banks being involved somewhere
within the three stages. Since they are our first line of defense against
criminals, by having robust controls and access to accurate KYC data,
banks will prevent many money laundering attempts. At the same time
other KYC covered entities are required to check their clients against
warning lists issued by governments and regulators.



About Paul Renner - C6 Intelligence Information Systems Limited
Paul Renner is CEO of KYCMap.com and the Co-Founder of C6
Intelligence, a leading provider of global intelligence information on both
individuals and companies through the C6 Database and bespoke
research projects. C6 Intelligence provides Enhanced Due Diligence (EDD),
Know Your Customer (KYC), and Anti-Money Laundering (AML) checks
and solutions for companies worldwide, and has a presence in the
Americas, EMEA and APAC regions.
Paul Renner is the co-author of the 2002, ICC (International Chamber of
Commerce) publication, “Preventing Financial Instrument Fraud – The
Money Launder’s Tool.” The fraud models described within
the publication have been referenced by the UK City of London
Police and prosecution services, to support their cases and secure
convictions against fraudsters.



Source: Paul Renner C6 | KYCMap - What is Money Laundering

				
DOCUMENT INFO
Description: What is Money Laundering? The Three Stages in Money Laundering... BY Paul Renner C6 Intelligence | KYCmap Money Laundering is the process of taking ‘dirty’ funds and converting it into ‘clean’ funds. ‘Dirty funds’ are criminally-derived proceeds which are then converted into other assets so that they can be reintroduced into legitimate commerce in order to conceal their true origin or ownership – ‘clean funds’ There are three stages in money laundering: Placement Layering Integration . . About Paul Renner - C6 Intelligence Information Systems Limited Paul Renner is CEO of KYCMap.com and the Co-Founder of C6 Intelligence, a leading provider of global intelligence information on both individuals and companies through the C6 Database and bespoke research projects. C6 Intelligence provides Enhanced Due Diligence (EDD), Know Your Customer (KYC), and Anti-Money Laundering (AML) checks and solutions for companies worldwide, and has a presence in the Americas, EMEA and APAC regions. Paul Renner is the co-author of the 2002, ICC (International Chamber of Commerce) publication, “Preventing Financial Instrument Fraud – The Money Launder’s Tool.” The fraud models described within the publication have been referenced by the UK City of London Police and prosecution services, to support their cases and secure convictions against fraudsters.
About Paul Renner is the CEO of KYC Map and co-founder of C6 Intelligence Information Systems which is used daily by banks, financial institutions, insurance companies, and regulators to take a risk-based approach to managing fraud, money laundering and staff compliance risks.