What is involved in the layering stage of money laundering?

The layering stage of money laundering is primarily characterized by conducting a series of transactions that are designed to obscure the original source of illicit funds. This process involves complex maneuvers such as transferring money between different accounts, using various financial institutions, or converting the funds into different forms (like cash or securities) to create confusion and complicate the money trail. The aim is to make it difficult for authorities to trace the origins of the funds, thus masking any corruption or illegal activity associated with them.

In contrast, reintroducing laundered funds into the economy pertains to the integration stage of money laundering, where the illicit funds are assimilated into legitimate financial systems. The initial placement of illicit funds refers to the placement stage, which involves introducing the dirty money into financial institutions. Finally, investing laundered money into legal businesses utilizes the clean appearance of these enterprises to legitimize the funds, but this action also falls under the integration stage. The layering stage is specifically focused on obscuring the source rather than these other processes.