There are three stages of money laundering and one of the stages which is the third stage of money laundering is ‘Integration”. This is where the scam artist channels the ‘clean money’ back into his or her account intending to freely spend the money and not being found guilty of money laundering. The purpose of integration is for scam artists or fraudsters to clean the money and make it legal with no trace of the root of the illegal money. At this stage, it becomes impossible to differentiate between the illicit and the legal funds.
How Can Integration be Executed
- Spending on high-end cars, jewelry, property market, artwork, and other expensive products
- Overvaluation of the value of imported goods from a country, with false invoices to back it up
- Make use of financial products like life insurance products to integrate the laundered funds. The launderers buy multiple life insurance policies, which are sold off within a short span, withdrawing the criminal proceeds under the pretense of “funds generated from insurance”.
Ways to Detect Integration in Money Laundering
- One crucial way your organization can be able to detect integration is by carrying out comprehensive customer due diligence on all its new and old clients/customers. This process will assist the company in identifying the person with whom the business relationship is to be established, verifying the legitimacy of their identities, including identifying the legal structure and the ultimate beneficial owners of the company. With this process done in the best way, the level of risk a client/customer is linked to will determine how it will affect the company.
- Another way is that humans and business entities are prone to change and as such can affect their risk profile. It becomes paramount for companies and organizations to mandatorily monitor the customer’s identification information, the risk profile of the customer, and the transaction executed by the customer to detect any red flags or inconsistencies suggesting the possibility of money laundering.
- The compliance officer cannot solely manage the identification of possible risk indicators which is why other employees involved in the AML compliance process in the company need to undergo different AML trainings and how to detect suspicious activities. The employees also need to be made to understand the important role they play in the prevention of money laundering in the UAE.
The curbing of money laundering is a continuous process and it is expected that companies and organizations maintain a comprehensive ongoing process to prevent the same and remain compliant. With experienced and professional AML consultants from us, we can assist you in staying compliant with the stipulated anti-money laundering regulations.
You can contact us for a free consultation to provide you with more information on Anti-Money Laundering in the UAE.
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