Which of the following example(s) is a layering technique?Group of answer choicesConsultants: funds transferred to offshore-based consultant (e.g. a lawyer’s trust account) to pay fictitious or inflated consultancy fee; consultant makes payments on behalf of ‘criminal client’Credit & Debit cards: local purchases are financed through credit cards which operate on a bank account in an offshore jurisdictionNone of the available answersBusiness Recycling: mixing of illegal money with cash flow from a legal cash-intensive business e.g. restaurant with high cash turnover
Question
Which of the following example(s) is a layering technique?Group of answer choicesConsultants: funds transferred to offshore-based consultant (e.g. a lawyer’s trust account) to pay fictitious or inflated consultancy fee; consultant makes payments on behalf of ‘criminal client’Credit & Debit cards: local purchases are financed through credit cards which operate on a bank account in an offshore jurisdictionNone of the available answersBusiness Recycling: mixing of illegal money with cash flow from a legal cash-intensive business e.g. restaurant with high cash turnover
Solution
The layering technique in money laundering involves creating complex networks of transactions to disguise the illegal source of money. From the given options:
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Consultants: This is an example of a layering technique. The funds are transferred to an offshore-based consultant (like a lawyer’s trust account) to pay a fictitious or inflated consultancy fee. The consultant then makes payments on behalf of the 'criminal client'. This creates a layer of transactions that makes it difficult to trace the original source of the funds.
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Credit & Debit cards: This can also be a layering technique. Local purchases are financed through credit cards which operate on a bank account in an offshore jurisdiction. This creates a layer of transactions that can make it difficult to trace the original source of the funds.
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Business Recycling: This is another example of a layering technique. The mixing of illegal money with cash flow from a legal cash-intensive business (like a restaurant with high cash turnover) creates a layer of transactions that can make it difficult to trace the original source of the funds.
So, all three examples given - Consultants, Credit & Debit cards, and Business Recycling - are examples of layering techniques.
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