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ACCA Applied Knowledge · Business and Technology · Regulation and financial crime

After layering, a launderer uses funds from an offshore company as a 'loan' to buy a hotel, then reports the hotel's income as legitimate business profit. Which statement best describes this?

This is integration. Integration is the final stage, where laundered funds are reintroduced into the legitimate economy as apparently lawful assets or income, such as buying a hotel through a disguised loan and reporting its earnings as ordinary business profit.

  1. AIntegration, because the funds now appear to be legitimate wealthCorrect
  2. BPlacement, because cash is being introduced to a business
  3. CLayering, because a loan creates a complex trail
  4. DTipping off, because the business is concealing information

Explanation

Integration returns laundered money to the legitimate economy so it looks like lawful income or assets. Buying a hotel with a disguised loan and reporting its income as normal profit fits this. Placement concerns first entry of the cash, and tipping off is disclosure to a suspect.

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