What is anti–money laundering?

Money laundering is the process by which you take dirty money (money obtained from illegal / undeclared means) and launder it through the financial system to make it look/appear clean when the cycle is finished.

Anti-Money laundering are all the tools, know-how, processes, hacks, tips, formulas, checks and balances, limits, thresholds, correlation of data, etc. to detect & mitigate money laundering.

There are three essential steps in money laundering:


Money that needs to laundered, i.e. dirty-money is first collected and aggregated.

Placement occurs when this cash is broken down into smaller denominations (amounts) and then loaded on to say anonymous or semi-anonymous prepaid card schemes.

Layering is when these cards are shipped to various contact points across the border and these individuals are then instructed to cash out from the ATMs using these prepaid cards. The funds cashed out then deposited in various bank accounts and are transferred between banks. Mixing the money so to speak.

Integration is taking this laundered money (which usually snakes its way to a single or dual bank account) and is used to buy expensive things like property, boats, cars, etc.

AML is designed to detect money-laundering acts, to stop them and report them.