Money Laundering

Money laundering is the process by which criminal property is concealed, transferred, converted or integrated into the legitimate economy.

It is often described as occurring in three stages:

1. Placement - introducing criminal property into the financial system;
2. Layering - obscuring its origins through transactions, transfers or structures; and
3. Integration - returning assets to the legitimate economy in an apparently lawful form.

In practice, the stages may overlap or occur simultaneously.

Lawyers may be targeted because legal services can facilitate transactions, corporate structures, movement of assets, real estate purchases, settlements and other activities capable of disguising criminal property.

A lawyer does not need to handle criminal proceeds directly to become involved in money laundering. To combat the risks associated with money laundering, you are expected to:

• understand who you are acting for;
• understand the purpose of the instruction;
• understand ownership and control arrangements;
• understand the source of funds and, where required, source of wealth;
• challenge information that is incomplete, inconsistent or unusual; and
• escalate concerns promptly.