Anti Money Laundering

 Meaning:

Anti-Money Laundering includes policies, laws, and regulations to prevent criminals financial crimes and illegal activity. Global and local regulators are established worldwide to prevent financial crimes, and these regulators build policies. Money Laundering is converting dirty (Illegal) money into clean (Legal) money. Having controls in place to prevent Money Laundering activities. HSBC was fined 1.9 million USD in 2012 and again fined 43 millions. Bank of New York laundered USD 7/9 Billions 

Stages of Money Laundering: 

✓ Placement 

      * Structuring 

      *  Smurfing 

✓ Layering

✓ Integration 

Placement:

The first stage of money laundering is known as “placement”. Whereby ‘dirty’ money is placed into the legal financial systems. After getting hold of illegal acquired funds through theft. Briefly and corruption. Financial criminals money is ‘wasted’ and disguised by being palced into a legal mate financial system, such as in off share accounts.

Structuring: 

Depositing money under the threshold like 49000 because it you deposit 50000 banks will ask your PAN details 

Smurfing:

It is money laundering tactic by which individual break up large sums of money into smaller, less noticeable amounts. These smaller amounts are then laundered separately with the intention of avoiding detection. The term smurfing is thought to have originated from illegal drug manufacturing and, in this context, refers to a junior money laundering or runner. Deposit the money through other peoples account 

 Layering:

Eliminate the source of the income/ Hide the source if the money. Its purpose is to create multiple financial transactions to conceal the original source and ownership of the illegal funds. Layering the money is the process wherein a money laundering operation passes their illicit money through enough transactions that the paper trail leading back to both the origin of identities become as difficult to trace as possible. 

Integration: 

Successfully convert the black money to white money. 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.

  

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