ACCA Strategic Professional · Advanced Audit and Assurance (International) · Money laundering
A client, Brightwell Imports, receives a series of small cash deposits from many unrelated individuals into its bank account, each kept below the bank's reporting threshold, and the funds are then pooled into a single account. At which stage of money laundering does this activity most clearly sit?
This is placement. Breaking illicit cash into small deposits below reporting thresholds is structuring, a typical method of first introducing criminal proceeds into the financial system. Layering and integration occur later, when funds are moved to obscure their origin and then returned as apparently legitimate wealth.
- APlacement, because illicit cash is first introduced into the financial systemCorrect
- BLayering, because the funds are moved through complex transactions to obscure origin
- CIntegration, because the funds are returned to the criminal as apparently legitimate wealth
- DPredicate offence, because the deposits themselves generate the criminal proceeds
Explanation
Placement is the first stage, where illicit cash enters the financial system. Splitting cash into small deposits below reporting thresholds (structuring or smurfing) is a classic placement technique. Layering would involve subsequent transfers to disguise the trail, which has not yet occurred here.
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