The financial industry has a widespread problem and that is money laundering. Due to the scale of the issue, businesses are legally required to have robust anti money laundering processes in place. Businesses must work to prevent the proceeds of crime entering their system or they risk huge fines and penalties. So, how do they recognise money laundering methods?
Property – The property market can be a target for money laundering. Criminals will use vast sums of money to purchase property, which they quickly sell on. The proceeds of the sale are then deposited into a legitimate account. The property might also be bought using a shell company or a third party which makes tracing the money harder. Find out more about AML IDENTITY VERIFICATION by visiting w2globaldata.com/regulatory-compliance-solutions-and-software/aml-id-checks/
Trade – Trade based laundering happens when businesses hide the proceeds of crime through trade transactions to make the money legitimate. This can be achieved by over or under invoicing for the cost of products or services, creating multiple invoices or misreporting the quantity and cost of imports, for example.
Structuring – This is the process of dividing large sums into smaller chunks to be deposited into a variety of different accounts. The effect of this is to make it almost impossible to trace the funds back. Making multiple deposits into one bank could raise suspicions so criminals use a number of different institutions in order to avoid suspicion.
Layering – To distance the money from its origins by putting it through multiple transactions is the goal of money laundering. This is known as layering. The cash can be converted into gold, then used to buy a business or property and then turned into chips in a casino, for example.