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Definitions

Money Laundering is the process by which criminals disguise the original ownership and control of proceeds of criminal conduct to make them appear to be legitimate. There are three stages of money laundering:

  • Placement: the stage at which criminally derived funds are introduced in the financial system;
  • Layering: the stage in which the property is "washed" and its ownership and source is disguised; and
  • Integration: the final stage at which the "laundered" property is re-introduced into the legitimate economy.

Terrorist Financing, or the financing of terrorism, is financing of terrorist acts, terrorists and terrorist organisations. Terrorist financing utilises funds for an illicit political purpose, but funding can be derived from either criminal activity or through legal means. Internationally, charity and relief organisations could unwittingly become conduits through which funds are channelled that may eventually be used to commit terrorist acts.

Proliferation Financing, or the financing of proliferation of weapons of mass destruction, is the act of providing funds or financial services which are used, in whole or in part, for the manufacture, acquisition, possession, development, export, trans-shipment, brokering, transport, transfer, stockpiling or use of nuclear, chemical or biological weapons and their means of delivery and related materials (including both technologies and dual use goods used for non-legitimate purposes), in contravention of national laws or, where applicable, international obligations.

Key Laws and Regulations

Key AML/CFT laws and regulations include the following:

The United Kingdom Government has passed a number of Overseas Territories Orders for sanctions or restrictive measures against countries, regimes or individuals deemed to be in violation of international law. These included matters relating money laundering, terrorism financing and proliferation financing.

Last Updated 2019-02-26