Money laundering is the process of making illegally obtained money appear legitimate. It involves three stages: placement, layering, and integration. Billions of dollars are laundered annually through financial institutions. Money laundering undermines legitimate business and financial markets. It can distort economies and cause revenue losses. To prevent money laundering, financial institutions monitor for suspicious transactions and maintain compliance software. Countries need strong anti-money laundering frameworks and collaboration between regulators and firms.

1. Money Laundering

2. What is Money Laundering?
The process in which large amounts of money
obtained from illegal activities conducted are
created to be appeared as legitimate.
Ex: crimes such as drug trafficking, terrorist
activities etc.
It is proved that billions of dollars are laundered through financial
institutions on an annual basis.
Why Money Laundering is considered as a growing
concern?

3. Why is it difficult to track of Money
Laundering activities?

4. 01. Placement
Related to moving of cash from its source.
i.e: Smuggling currency out of a country
Getting the bank involved
Blend funds via hiding cash among other
Asset purchase
02. Layering
Activities done in making the money and
laundering activities difficult in detecting.
i.e: Conversion of cash in to monetary
instruments via banker’s drafts, money order
etc, Buying of material assets
Stages in the process of a typical
money laundering activity

5. 03. Integration
Moving laundered money in to the economy via the banking system, ensuring
that they seem to be via normal earnings.
i.e.
- Selling off of properties to integrate money back in to the economy
- Implementing front companies and falsify loans
- Off shore account maintenance
- Usage of false export or import invoices

6. Impacts on economy due to Money
Laundering
 Undermining the legitimate private sector
 Undermining the integrity of financial markets
 Loss of control across economic policy
 Distortion of the economy and instability
 Revenue losses
 Risks faced in privatization efforts
 Reputation risk

7. How to identify money laundering?
Financial Institutions should have close watch on:
• Insufficient and suspicious behavior
• Maintenance of records
• Observing of changing business activities
• Changes in transaction patterns

8. AML Software system used to address
the issues:
• Transaction monitoring systems
• Currency transaction reporting (CTR) systems
• Customer identity management systems
• Compliance management software

9. Conclusion
The country should have a vigorous AML regulatory framework in
collaboration with its financial firms implemented in order
successfully manage the money laundering status and mitigate such
illegal activities.

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