Money laundering as a “three-stage process”– Hazardous Misconception of a Serious Crime

• In Event: Rethinking Money Laundering and its Control

Abstract

Money laundering is usually described as a “three-stage process” including (a) placement, (b) layering, and (c) integration. In the recent past, however, it has become more and more obvious that the complex reality of money laundering has exceeded the concept’s capacity to summarize essential characteristics of the crime. Nonetheless, the three-stage concept remains very popular among academics and practitioners engaged in understanding and fighting money laundering activities of criminals. Using a flawed concept not only results in promoting an inaccurate image of money laundering, but also can have a negative impact on the creation and execution of anti-money laundering measures. For this reason, it will be argued that it is time to reconsider our current understanding of money laundering and establish a robust concept based on rigorous theoretical considerations and empirical evidence.

Author

• Florian Hetzel, University College London