Placement
Introducing illegal cash into the financial system through deposits, cash purchases, or currency exchange.
Money Laundering
Definition of Money Laundering
Money laundering definition: the process of making illegally obtained money appear legitimate. Learn about money laundering stages, methods, and Australian laws.
Key Information
What is Money Laundering?
Money laundering is the process of disguising the origins of illegally obtained money to make it appear legitimate. Criminals use money laundering to enjoy the proceeds of crime without attracting attention from law enforcement or tax authorities.
Under Australian law, money laundering is a serious criminal offence. The Criminal Code Act 1995 makes it illegal to deal with money or property that is, or is reasonably suspected to be, proceeds of crime. This includes receiving, possessing, concealing, disguising, or disposing of criminal proceeds.
The Three Stages of Money Laundering
Layering
Moving money through multiple transactions to disguise its origin and create complex audit trails.
Integration
Reintroducing laundered funds into the legitimate economy as apparently clean money.
Criminal Penalties
Money laundering is a serious criminal offence with penalties up to 25 years imprisonment.
Frequently asked questions
What is the legal definition of money laundering?
Under Australian law (Criminal Code Act 1995), money laundering is dealing with money or property that is, or is reasonably suspected to be, proceeds of crime, while being reckless or knowing about its criminal origin. This includes receiving, possessing, concealing, or disposing of such proceeds.
What are the three stages of money laundering?
The three stages are: 1) Placement - introducing illegal funds into the financial system, 2) Layering - creating complex transaction trails to disguise the origin, and 3) Integration - returning the 'cleaned' money to the legitimate economy.
What activities constitute money laundering?
Money laundering activities include: structuring deposits to avoid reporting thresholds (smurfing), using shell companies, real estate purchases with illicit funds, trade-based laundering, cryptocurrency mixing, and professional service abuse.
What are the penalties for money laundering in Australia?
Money laundering penalties include up to 25 years imprisonment and/or fines up to $555,000 for individuals. Corporations face fines up to $5.55 million or three times the value of the benefit obtained.
Related resources
Prevent Money Laundering
ARCaml helps businesses detect and prevent money laundering through robust customer due diligence.