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Tag: kyc aml checks

All About Money Laundering

Money laundering is based on different crimes. It is just the end form of different crimes. Some criminal offenses are mentioned below which are included in the Proceeds of Crime Act:

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Laundering: Acquisition, possession, or use of the proceeds of crime.

Failure to report: If somebody fails to disclose knowledge or suspicion of money laundering then he will be liable for a crime.

Tipping off: Somebody who discloses information to any person who is involved in some crime then he is also liable and contributor to crime.

For example, a bank manager who sees any illegal transaction then he should declare this information to a related body reporting officer before the transaction took place or right after the transaction. Otherwise, he will be investigated and failure to disclose will lead him to crime.

There are three major phases in money laundering. These are mentioned below:

Placement: Change the initial disposal of the illegal activity into legal business activity.

Layering: It means putting different layers to hide the original proceedings.

Integration: After placement and putting different layers, the money has the appearance of legal funds.

Accountants can play a vital role in reducing the chances of money laundering. They have to be very careful while preparing accounts of the company because accountants are liable to disclose any illegal activity inside the company. Now accountants have to be followed many regulations which are set by an international body of accountants. It is mentioned in these regulations that accountants will be asked about any suspected transaction.