What is the Money laundering Layering definition
What is the Layering term in the Money laundering subject ?
Layering - The purpose of
this stage is to make it more difficult to detect and uncover a
laundering activity. It is meant to make the trailing of illegal
proceeds difficult for the law enforcement agencies. The known methods
are:
- Cash converted into Monetary Instruments
- Once the placement is successful within the financial system by
way of a bank or financial institution, the proceeds can then be
converted into monetary instruments. This involves the use of banker's
drafts and money orders.
- Material assets bought with cash then sold
- Assets that are bought through illicit funds can be resold locally
or abroad and in such a case the assets become more difficult to trace
and thus seize.
How to detect and avoid layering (aml) ?
To avoid layering financial institution the regulatory institution need to implement highly effective analytics method supported by dedicated IT system that will be able to:
Track and analyze complex owner structure of the offshore companies to find the true owner of the property
Monitor the cash flows and money transfers between those companies
Track and monitor the assets ownership (like vessels, expensive cars and airplanes, real estates)
Discover the beneficiary owner (ubo) of the companies, legal forms and assets.
The next method used in ML is the integration
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