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

Which of the following best describes the 'layering' stage of money laundering?

Layering is the stage where launderers move funds through many transactions, accounts or entities to disguise their illegal origin and obscure the audit trail. Placement is the initial entry of cash into the system, and integration is the return of apparently clean money to the criminal.

  1. AIntroducing illegally obtained cash into the financial system, for example by depositing it in small amounts
  2. BMoving funds through a series of transactions or accounts to disguise their origin and break the audit trailCorrect
  3. CReturning the cleaned funds to the criminal as apparently legitimate income or assets
  4. DReporting suspicious activity to the relevant national authority

Explanation

Money laundering is usually described in three stages: placement, layering and integration. Layering separates the funds from their source by complex transfers and transactions. Option A describes placement, and option C describes integration.

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