Key terms in AML/CFT, sanctions and compliance.
A collective framework of measures, procedures and controls through which states and obliged entities prevent, detect and report attempts at money laundering and the financing of terrorist activities.
Three stages of money laundering:
1. Placement – The first stage, in which the offender attempts to introduce illegally obtained funds into the financial system.
2. Layering – The second stage, in which complex transactions are used to obscure the trail back to the origin of the funds.
3. Integration – The third stage, in which the cleaned funds re-enter the legitimate financial system as apparently lawful assets.