What is Money Laundering?

The objective of most criminal acts is to generate a profit. Money laundering is the term used for disguising the proceeds of crime (dirty money) with the aim to transform the proceeds to appear legitimate (clean money) without arousing suspicion.

Activities of organised crime, including for example drug trafficking, can generate huge amounts of criminal proceeds. Criminals disguise the sources, change the form, or, move the proceeds to a place where they are less likely to attract attention.

The process of money laundering typically has three stages:

• The Placement Stage: The launderer introduces the proceeds of crime into the financial system.

• The Layering Stage: The launderer engages in a series of movements or conversions of the funds to disguise them from the original source.

• The Integration Stage: With stage 1 and 2 being successful the cycle is complete, therefore the launderer might choose to invest / withdraw the now laundered funds, thus returning the funds to the financial system as legitimate funds.

Criminals are continuously looking for new routes, products and services for laundering their funds including new and emerging financial technology (FINTech). Money laundering is a threat to any financial system and it is therefore vital to have comprehensive anti-money laundering regimes in place to deprive the criminal of ill-gotten gains.

The links on this page have been provided in good faith. They are from third parties outside of the control of the Guernsey Financial Intelligence Unit and will take you off this website.