Money laundering converts illegal money into legal money. Money laundering is one of the most common forms of converting illegal into legal money. The illegal money is the one that does not come under the tax payment, and Steuerberatung Wien advises their client to pay the tax properly. Three distinct money laundering stages are followed for the illegal money to be reintegrated into the legal, and these are the benefits of the financial system. To ensure you understand the stages of money laundering, it is classified into three stages. The first process is the placement and the second one is the layering is a significantly complex element of the money laundering process. Its purpose is to generate numerous financial transactions to conceal the real source and ownership of the illegal funds. The third of the stages of money laundering is integration, and then here you can see about the stages of money laundering:

What is Money Laundering?

You need to understand the common reasons behind the strategies used in laundered money, and it is important to have a clear definition of money laundering. Money Laundering is cleaning illegal money, so they change it into legal by doing some process stages. If you leave unchecked money laundering, it potentially deprives economic, security and social consequences. It also deliver fuels to drug dealers, terrorists, illegal arms dealers, corrupt public officials, and others to operate and expand their criminal enterprises.

The Three Stages of Money Laundering

Money laundering schemes vary in their difficulty and methods, but there are three common phrases for successful laundering they are 

  • Placement, 
  • Layering 
  • Integration 

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Here you can look at the individual stages.

1. Placement

  • The first stage of money laundering is the Placement, and it happens when the launderer presents their illegal profits into the financial system. In the placement stage of money laundering, a common way is proficient, done through scaling. The criminal entities will take large amounts of money and divide them into less noticeable and tougher trial sums.
  • In this process of placement, it allows criminals to deposit the money directly into bank accounts or otherwise buy other legal, financial instruments such as money orders and cheques, these are then moved elsewhere to be deposited at various locations. 
  • Then moving the money away from the dirty source to the clean or appropriate accounts. It can also mean placing money in various places at the same time in an attempt to confuse investigators searching for laundering.
  • By placing the money in accounts or other financial instruments, the criminal’s thought that the course of their criminal activity would be hidden from the others and distancing it from the crime.
  • Another popular tactic used in the stages of money laundering is offshoring. Criminals may choose to move their money to various foreign countries to change the illegal money into legal. They thought keeping the money far away from them would be safe, and by laundering the funds abroad, it moves the cash away from the source and puts some distance between the criminals and the cash. However, the money will be in the aboard, but still, the criminal entity has control over the funds.
  • Later, the money transfers through FIs, business houses and other businesses. The most likely organizations are those known as cash-intensive industries, such as casinos, different ATMs, bars, strip clubs, car washes, mom and pop type comfort stores and so forth.
  • With the placement process, funds may be deposited in a bank, added to the accounts of an existing business or disguised as a transaction, like the products that are never provided, but show the document as they provided and save their illegal money as the legal money.
  • Placement is frequently attained through a series of regular small transactions. But some criminals make the mistake of depositing large amounts of unaccountable cash, that’s why they are often quickly caught.
  • There are some people who have no experience in the attempt of money laundering schemes and do not know what behaviours are likely to be identified, but organized crime associations are unlikely to make it very easily.

2. Layering

  • In layering, money laundering is the second stage, and it is performed to make money as rigid to spot as possible, and further moving it away from the illegal source. The layering can be the often most complex stage of the laundering process.
  • The layering set of money laundering is where illegal money is combined with legitimate money or positioned in constant motion from one account to another. Layering often involves making many different transactions so that the cash vanishes and becomes laundered.
  • Methods of layering include using the illegally obtained money to gamble in a casino briefly, it is the game where buying and cashing out chips, by this process can help to make the funds appear more genuine or by placing cash in the stock market and moving it around through various financial products or foreign currency exchanges.
  • Layering can work in diverse ways depending on the schemes, which can frequently be intense.
  • The funds might be supported through a series of accounts at various banks worldwide and across borders. Using widely distributed accounts for laundering is common in those jurisdictions that do not co-operate in anti-money laundering investigations. In some cases, the launderer might cover the transfers as payments for goods or services, thus giving them a legitimate appearance.
  • No matter what method is utilised, the sense of layering is to fling up with adequate hurdles. In this event, the most skilled Steuerberatung Wien has trouble differentiating money from legal transactions to illegal cash placed to be laundered.
  • Layering is generally one of the safer stages of money laundering, compared to placement, because the placement provides various opportunities for criminals to make mistakes by doubling daily transactions or other major withdrawals from usual activities.

3. Integration

  • After successfully processing criminal profits through the first two phases, money launderers then move their funds to the third stage, integration. In this process, the cash re-enters into the real economy. This final stage of money laundering successfully cleaned the money then sent it back into the economy.
  • After the money is moved from legal businesses or acquisitions, or the trail has become too difficult to follow, the money can be placed into major investments. Integrated money laundered cash can be spent on luxury assets, real estate holdings, long-term investment vehicles, or new business ventures. Integrated cash can also buy assets that can be used to facilitate future money laundering.
  • It is dangerous for all businesses to safeguard they fulfill with anti-money laundering regulations and report any activities that are illegal or suggest widespread illegal activity. For these regulators have levied heavy fines recently against banks and institutions that failed to prevent money laundering.

Bottom line

Finally, the above-given process is the three different types of process that has been used in money laundering. Here they use these processes to change the illegal money into legal money. 

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