What is the Money laundering Placement definition
In money laundering process Placement -This is the
movement of cash from its source. On occasion the source can be easily
disguised or misrepresented. This is followed by placing it into
circulation through financial institutions, casinos, shops, bureau de
change and other businesses, both local and abroad. The process of
placement can be carried out through many processes including:
- Currency Smuggling -
This is the physical illegal movement of currency and monetary
instruments out of a country.
- Bank Complicity - This
is when a financial institution, such as banks, is owned or controlled
by unscrupulous individuals suspected of conniving with drug dealers
and other organised crime groups. This makes the process easy for
launderers. The complete liberalisation of the financial sector
without adequate checks also provides leeway for laundering.
- Currency Exchanges - In
a number of transitional economies the liberalisation of foreign
exchange markets provides room for currency movements and as such
laundering schemes can benefit from such policies.
- Securities Brokers -
Brokers can facilitate the process of money laundering through
structuring large deposits of cash in a way that disguises the
original source of the funds.
- Blending of Funds - The
best place to hide cash is with a lot of other cash. Therefore,
financial institutions may be vehicles for laundering. The alternative
is to use the money from illicit activities to set up front companies.
This enables the funds from illicit activities to be obscured in legal
transactions.
- Asset Purchase - The
purchase of assets with cash is a classic money laundering method. The
major purpose is to change the form of the proceeds from conspicuous
bulk cash to some equally valuable but less conspicuous form.
How to detect and avoid placement of dirty money (aml) ?
To avoid placement you need to implement highly effective analytics method supported by dedicated IT system that will be able to:
Monitor the cash flows and money transfers between companies and natural persons
Monitor incoming and outcoming transactions to detect the flows
Identify the related transactions - connected by various of advanced analytics methods (compare origin tree, cash flow, artificial intelligence algorithms)
Monitor cash in operations performed by bank branches or other establishments that allows cash transfer
Discover the beneficiary owner (ubo) of the companies, legal forms and assets.
The next method used in ML is the layering
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