Threats and related regimes

Distinguish laundering, financing threats and related controls.

This topic explains what the controls in the other topics are for. It starts with money laundering, terrorism financing and proliferation financing, and with how sanctions duties differ from AML duties, so that the vocabulary used across the library has a clear meaning.

The method guides describe common techniques, from placement, layering and integration to structuring, money mules, shell companies and cash commingling. The applied guides show how those techniques appear in property, lending, virtual assets, corruption, tax crime and the misuse of non-profits.

Read these guides as background for your own risk assessment. They describe patterns that regulators and the FATF have reported; they do not say which patterns apply to your business, and they are not a list of things to look for in every customer.

• Money laundering explained

  Money laundering can involve dealing with money or property derived from crime or used in crime. The legal definition depends on the relevant offence.

• Terrorism financing

  Terrorism financing can involve funds from lawful sources as well as criminal sources.

• Proliferation financing explained

  Proliferation financing concerns financial support connected with the spread of weapons of mass destruction.

• Sanctions and AML boundaries

  AML customer controls and sanctions obligations can concern the same transaction but require distinct legal questions.

• Fraud, scams and money laundering

  Fraud and scams can produce funds that are then moved or concealed through money laundering.

• Trade-based money laundering

  Trade-based money laundering uses trade transactions to move or disguise criminal value.

• Placement, layering and integration

  The three-stage model explains common laundering patterns. It is not a required sequence or a criminal-law test.

• Predicate offences and proceeds of crime

  A predicate offence generates criminal proceeds. The relevant law determines the offence and the property it covers.

• Structuring and smurfing

  Structuring concerns arrangements to avoid reporting. Repeated small payments alone do not establish the offence.

• What is a money mule?

  A money mule moves criminal funds for another person. The person’s knowledge and circumstances require evidence.

• Professional money laundering networks

  Laundering networks provide criminal services to others. A professional adviser or shared business contact is not proof of a criminal network.

• Shell companies and shelf companies

  Shell describes limited business substance. Shelf describes a company formed for later use or sale. Neither label alone proves crime.

• Cash businesses and commingling

  Commingling mixes criminal proceeds with lawful receipts. Cash sales alone do not show that this has occurred.

• Property transactions and money laundering

  Property can hold criminal proceeds and make their origin harder to identify. The buyer, payer and sale instructions can give different evidence.

• Loans and third-party repayments

  A loan description can hide an unexplained funding source. Compare the agreement with the people who actually supply and repay the money.

• Virtual assets and money laundering

  Virtual assets can move criminal proceeds between services and countries. Transfer records and customer identity are separate evidence questions.

• Bribery, corruption and money laundering

  Corruption can produce illicit benefits. Money laundering can hide the person who received them or the origin of the funds.

• Tax crime and money laundering

  Tax crime can generate or preserve criminal proceeds. A tax error, dispute or lawful planning arrangement does not by itself establish money laundering.

• Terrorist abuse of non-profit organisations

  Terrorists can misuse an organisation or divert its funds. Non-profit status alone does not establish high risk or wrongdoing.