Placement, Layering and Integration
Placement, layering, and integration are the three classic stages of money laundering. Placement is the initial introduction of criminal proceeds into the financial system. Layering separates the funds from their source through a series of transactions, transfers, or conversions designed to obscure the trail. Integration is the final reintroduction of the laundered funds into the legitimate economy as apparently clean assets — property, businesses, or investments.
accountants are most likely to encounter the integration stage — laundered funds re-emerging as business income, property purchases, or investments. Red flags include unexplained wealth, transaction patterns inconsistent with stated business activity, complex ownership chains, and reluctance to evidence source of funds or wealth.
Other terms that go with Placement, Layering and Integration
Money laundering is the process of disguising the proceeds of crime so they appear to come from a legitimate source. Under the Proceeds of Crime Act 2002 (POCA), the principal money laundering offences are concealing criminal property (s.327), entering into arrangements that facilitate it (s.328), and acquiring, using, or possessing criminal property (s.329). All three carry maximum penalties of 14 years' imprisonment.
A predicate offence is the underlying criminal activity that generates the proceeds laundered through a money laundering offence. Under POCA, almost any criminal offence — committed in the UK or overseas — that produces a financial benefit can be a predicate offence. Common examples include tax evasion, fraud, drug trafficking, corruption, theft, and modern slavery.
Source of funds refers to the origin of the specific money or assets used in a particular transaction or to fund a business relationship — for example, the proceeds of a property sale, a business loan, or salary income. Establishing source of funds is a key EDD step where a transaction is large, unusual, or involves a higher-risk client.
Put Placement, Layering and Integration into practice with Certivus
Knowing the term is the first step. Certivus gives you the workflows — client intake, CDD, EDD, PEP and sanctions screening, audit-ready records — to apply it across every client.
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