What does the term 'layering' refer to in money laundering?

Layering is a critical stage in the money laundering process that involves disguising the origins of illegally obtained money through a series of complex transactions. This process is designed to obscure the trail of illicit funds, making it difficult for authorities to trace them back to their original illegal source. During layering, perpetrators may engage in numerous transactions, such as transferring money between various accounts, converting cash into other forms of assets, or utilizing shell corporations. The complexity and obfuscation achieved in this stage help further distance the illicit money from its criminal roots, thereby allowing the launderers to enjoy their proceeds without raising suspicion. This differentiates layering from other stages of money laundering, such as placement, which is focused on introducing illegal funds into the financial system, and integration, which is where laundered money is finally reintroduced into the economy as seemingly legitimate funds.