Which of the following are the basic stages of money laundering?

The basic stages of money laundering are accurately identified as placement, layering, and integration.

Placement is the initial phase where illicit funds are introduced into the financial system. This often involves breaking down large amounts of cash into smaller sums to avoid detection, such as through bank deposits, currency exchanges, or purchasing assets.

Layering follows, which involves complex transactions designed to obscure the illegal origin of the funds. This may include transferring money between accounts, making extravagant purchases, or investing in financial instruments, all aimed at creating a web of transactions that makes tracing the source of the funds difficult for law enforcement.

Finally, integration is the stage where the laundered money is fully reintroduced into the economy, making it appear legitimate. This can occur through a variety of means such as businesses or investments that appear lawful, allowing the individual to use the funds without raising suspicion.

Understanding these stages is crucial for AML professionals as it helps them identify and mitigate the risk of money laundering activities within their organizations. Recognizing each stage allows for the development of targeted strategies to combat potential laundering schemes effectively.