What is an example of Layering in Money Laundering?
Layering is one of the stages in the money laundering process, where illicit funds are obscured or separated from their source to make them appear legitimate. An example of layering can be illustrated with the following scenario:
Imagine a criminal has gained a significant amount of money from illegal activities, such as drug trafficking. To layer this money and make it harder for authorities to trace back to its criminal origins, the individual might take the following steps:
- Structuring through a series of transactions
- Misusing Shell companies & Offshore accounts
- Resorting to Trade-Based Money Laundering
- Using complex financial instruments
Check out this blog to understand the layering stage