money laundering
Enable an agent to distinguish suspected money laundering from other financial activity, assess the supporting evidence and determine appropriate, authorised responses.
Research draft, second pass
A second pass drafted this model: the structure a model of this thing needs, and what is known about it in the world. The line under this one says how the second half was obtained - researched against sources, or recalled without web access, in which case nothing here was read anywhere and every claim is a lead to verify. Unreviewed either way.
recalled by Codex without web access - no source was read
Researched by: Codex
Purpose and description
Enable an agent to distinguish suspected money laundering from other financial activity, assess the supporting evidence and determine appropriate, authorised responses.
Money laundering is the handling of property derived from criminal activity to conceal or disguise its illicit origin, ownership, location or movement, with legal definitions commonly also covering knowing acquisition, possession or use of criminal proceeds.
It can be Map an allegation to the elements of a specified definition and identify missing evidence.; Trace documented property movements and ownership relationships while preserving gaps and competing interpretations.; Compare suspicious indicators with supported lawful explanations.; Prepare an evidence-linked assessment that distinguishes observations, inferences and formal findings.; Identify authorised escalation, preservation or review actions and the conditions required before taking them..
Distinguishing features
Identify evidence connecting the property to criminal activity; complexity, secrecy or unusual transactions alone do not establish laundering.
Identify the alleged laundering conduct and relevant mental element under a named legal framework, rather than classifying every movement of criminal proceeds identically.
Distinguish concealment of criminal origin or control from privacy practices with a supported lawful explanation.
Distinguish laundering from terrorist financing by assessing criminal provenance separately from intended destination or use.
Distinguish an alert, a report, an investigative allegation and an adjudicated finding; each supports a different status.
Scope
+ The relationship between suspected criminal proceeds and the activity being assessed
+ Conduct, participants, knowledge and intent relevant to a laundering classification
+ Movement and transformation of property, ownership and apparent provenance
+ Competing legal, investigative and compliance operationalisations of money laundering
+ Case assessment, uncertainty and authorised preventive or investigative responses
- The underlying predicate crime except where needed to establish the origin of proceeds
- Terrorist financing as a separate activity, including financing from lawful sources
- Tax planning, tax avoidance and tax offences except where their relationship to laundering is established
- General payment processing, banking and asset administration
- The full governance and operation of an anti-money-laundering compliance programme
Characteristics
- Applicable classification framework
- Named jurisdiction, legal instrument or analytical definition, with effective date The conduct and evidence required for classification depend on the framework used.
- Criminal-proceeds connection
- Property linked to alleged predicate activity through identified evidence; connection unresolved, supported or adjudicated Separates a provenance-based allegation from suspicion based only on transaction appearance.
- Alleged conduct
- Conversion, transfer, concealment, disguise, acquisition, possession or use, subject to the selected framework Makes the conduct being assessed explicit instead of relying on a general laundering label.
- Knowledge or intent assessment
- Required mental element; evidence supporting it, contradicting it or leaving it unresolved Participation in a transaction does not by itself establish culpable knowledge or intent.
- Ownership and control
- Documented and alleged links among legal owners, beneficial owners, controllers, intermediaries and beneficiaries Allows an agent to distinguish recorded ownership from effective control without assuming they differ.
- Value attributable to suspected proceeds
- Amount or interval in a named currency, with valuation date, attribution method and uncertainty Avoids treating gross transaction turnover or an entire mixed balance as proven criminal proceeds.
- Assessment status
- Alert, under review, reported, investigated, charged, adjudicated or closed, with outcome and responsible authority Prevents operational suspicion from being represented as a legal conclusion.
Also called
Where this came from
wikidata · CC0 1.0
Drafted structure
Bundle to layer to finding to question, as the second pass will find it: 6 bundles · 11 layers · 18 findings · 28 questions.
Definition and offence boundaries Establish which meaning of money laundering is being applied and which neighbouring activities it excludes.
Legal offences, investigative hypotheses and compliance indicators must not be treated as interchangeable definitions.
Classification framework
Record the authority, version and purpose of the definition used.
Applicable elements
Identify the conduct, property connection and mental element that the selected framework requires.
- Which jurisdiction, instrument, effective date and provision or analytical definition govern this assessment? definition
- Which required elements are supported, disputed or still unexamined in this instance? boundary
Neighbouring activities
Separate laundering from related offences and lawful financial behaviour.
Classification separation
Test whether the allegation concerns laundering, the predicate offence, another financial offence or lawful conduct.
- What distinguishes the alleged laundering conduct from commission of the underlying offence or mere receipt of a payment? boundary
- How does the selected framework treat self-laundering, possession or use of proceeds, and overlap with other offences? definition
Criminal proceeds and attribution Assess the alleged criminal origin of property and the extent of value attributable to it.
A laundering assessment needs an evidenced proceeds connection and a defensible account of the property affected.
Predicate connection
Record the alleged source crime and evidence connecting it to the property.
Proceeds origin
Describe the criminal-provenance hypothesis without treating an allegation as established fact.
- What alleged criminal activity generated the property, and which records or findings support that connection? provenance
- What must be established about the predicate activity under the selected framework, including activity occurring abroad? definition
Value and mixing
Assess identifiable proceeds through changes of asset form and mixing with other property.
Attributable property
Record the property and value implicated, with explicit tracing and valuation assumptions.
- Which assets or portions of mixed funds are attributed to criminal proceeds, using what evidence and attribution method? measurement
- How are repeated transfers, changes in value and asset substitutions handled so that the same proceeds are not counted multiple times? measurement
Conduct and property trajectory Reconstruct the alleged laundering activity from observed events and changes in property presentation.
An activity model must describe what happened without forcing every case into a predetermined sequence.
Observed events
Link transactions and non-transactional acts into an evidenced chronology.
Event chain
Record relevant movements, conversions and acts of concealment together with gaps in the record.
- Which dated acts involving the property are directly documented, and which links between them are inferred? provenance
- Do placement, layering or integration labels clarify the observed activity, or impose stages that the evidence does not show? boundary
Concealment and apparent legitimacy
Examine alleged changes to the visibility or apparent legitimacy of property origin, ownership or control.
Representation versus record
Compare stated transaction purposes and ownership representations with independently supported facts.
- What specific discrepancy supports an allegation that origin, ownership, control or purpose was concealed or misrepresented? provenance
- Which supported commercial, personal or administrative explanations could account for the same discrepancy? boundary
Participants, control and knowledge Distinguish actors' roles, effective control and alleged mental states.
A shared transaction or organisational connection does not establish that all participants controlled the proceeds or knew their origin.
Actor roles and control
Identify who owned, directed, facilitated or benefited from the relevant activity.
Effective participation
Separate formal titles and recorded ownership from evidenced decisions and benefits.
- Who could direct the relevant property or transactions, and what evidence establishes that authority or practical control? provenance
- Which actors are alleged organisers, beneficiaries, intermediaries or unwitting participants, and where are those roles uncertain? boundary
Mental element
Assess the knowledge or intent relevant to each actor and act.
Knowledge and intent evidence
Keep observed behaviour separate from conclusions about what a participant knew or intended.
- What mental element does the applicable framework require for this actor's alleged conduct? definition
- What contemporaneous evidence supports or contradicts that mental element at the time of the act? provenance
Assessment and authorised response Translate evidence into a qualified case status and an action appropriate to the agent's authority.
Recognition must lead to accountable decisions without converting an indicator into a verdict or assuming powers the agent does not hold.
Evidence and case status
Track the basis, limitations and institutional status of the assessment.
Qualified assessment
Record why an activity is flagged and how far the available evidence supports the allegation.
- Is the current label an automated alert, analyst suspicion, filed report, formal allegation or adjudicated finding, and who assigned it? provenance
- Which evidence gaps, source limitations and alternative explanations materially affect the assessment? boundary
Response authority
Identify permissible next steps and the prerequisites for taking them.
Proportionate next action
Connect proposed review, reporting or property-related actions to a documented mandate and applicable conditions.
- Which evidence-preservation, internal escalation or external reporting action is required or permitted for this actor in this jurisdiction? action
- What authority, threshold and review are required before restricting a transaction, disclosing case information or taking action against property? action
Evidence and external alignment What the world already says about this thing, gathered so the model can be checked against it.
A model that cannot be lined up against existing standards, identifiers and practice cannot be adopted by anyone who already uses them.
Reported evidence
Findings from the breadth pass, kept separate from the structural claims.
Check these first
Recalled without web access and unsourced; every item is a lead to verify.
- This describes the criminal activity, rather than the compliance discipline of anti-money laundering; it is recalled knowledge, not researched source verification.
- The listed kinds overlap and are not a single exhaustive taxonomy; placement, layering and integration are explanatory stages rather than separate kinds.
- Check jurisdiction-specific offence elements and current implementation of international standards; estimates and reporting counts cannot establish the true prevalence of laundering.
- Which of these check these first hold for the sense of money laundering this model covers, and on what evidence? provenance
Kinds and varieties
Recalled without web access and unsourced; every item is a lead to verify.
- Self-laundering: laundering proceeds of one's own predicate offence
- Third-party laundering: laundering proceeds on behalf of another offender
- Professional money laundering: providing laundering services as a business
- Trade-based money laundering: using trade transactions to disguise criminal proceeds
- Money laundering involving cash
- Money laundering involving virtual assets
- Which of these kinds and varieties hold for the sense of money laundering this model covers, and on what evidence? provenance
Standards and regulation
Recalled without web access and unsourced; every item is a lead to verify.
- Financial Action Task Force (FATF) Recommendations: international standards for combating money laundering, terrorist financing and proliferation financing
- United Nations Vienna Convention of 1988: requires criminalisation of specified laundering conduct involving drug-trafficking proceeds
- United Nations Convention against Transnational Organized Crime: establishes money-laundering criminalisation and prevention obligations
- United Nations Convention against Corruption: addresses laundering of criminal proceeds and preventive measures
- Basel Committee on Banking Supervision guidance on sound management of risks related to money laundering and financing of terrorism
- Which of these standards and regulation hold for the sense of money laundering this model covers, and on what evidence? provenance
Real-world use
Recalled without web access and unsourced; every item is a lead to verify.
- Criminal-law classification for investigating and prosecuting dealings with criminal proceeds
- Financial institutions' customer due diligence, transaction monitoring and suspicious-activity reporting
- Financial intelligence units' analysis of reports and dissemination of financial intelligence
- Asset tracing, freezing, seizure and confiscation proceedings
- National and sectoral assessments of exposure to illicit financial activity
- Which of these real-world use hold for the sense of money laundering this model covers, and on what evidence? provenance
Typical measurements
Recalled without web access and unsourced; every item is a lead to verify.
- Estimated value of criminal proceeds laundered within a defined period and territory - No reliable universal range; estimates depend strongly on scope and method - Currency per reporting period
- Suspicious transaction or activity reports submitted - Varies by jurisdiction, reporting population and reporting rules; does not directly measure laundering incidence - Reports per reporting period
- Which of these typical measurements hold for the sense of money laundering this model covers, and on what evidence? provenance
Failure modes and hazards
Recalled without web access and unsourced; every item is a lead to verify.
- Enables offenders to retain and use criminal proceeds, supporting further crime and corruption
- Obscures beneficial ownership and the provenance of assets
- Can distort competition and undermine institutional integrity
- Detection systems can miss illicit activity or incorrectly flag legitimate transactions
- Treating placement, layering and integration as a mandatory sequence can obscure cases that do not follow that explanatory model
- Which of these failure modes and hazards hold for the sense of money laundering this model covers, and on what evidence? provenance
Regional variation
Recalled without web access and unsourced; every item is a lead to verify.
- Jurisdictions differ in which predicate offences generate proceeds covered by laundering offences.
- Treatment of self-laundering, required mental elements and corporate liability varies across legal systems.
- Reporting duties, covered professions, beneficial-ownership requirements and enforcement practices vary by jurisdiction.
- Which of these regional variation hold for the sense of money laundering this model covers, and on what evidence? provenance
Neighbouring kinds and how to tell them apart
Recalled without web access and unsourced; every item is a lead to verify.
- Terrorist financing - Distinguished by the intended terrorist use of funds, which may originate legally or illegally; laundering concerns dealings with criminal proceeds.
- Tax evasion - Concerns unlawful avoidance of tax obligations; it may generate proceeds subject to laundering law but is not itself synonymous with laundering.
- Fraud - Typically obtains value through deception; laundering concerns subsequent or overlapping dealings with criminal proceeds.
- Asset concealment - Concealing assets does not necessarily involve criminal proceeds; their criminal provenance and the applicable offence elements distinguish laundering.
- Illicit financial flows - A broader and contested category of illicit movements of value that can include laundering alongside other activities.
- Which of these neighbouring kinds and how to tell them apart hold for the sense of money laundering this model covers, and on what evidence? provenance
What the second pass must settle
- Which existing Vercy world model, if any, already owns this concept and should serve as the single publication for the registry entry?
- Which authoritative definitions should anchor the model, and how should jurisdictional differences in predicate offences, mental elements and self-laundering be represented?
- When do investigative and compliance operationalisations diverge from offence definitions, and which distinctions are necessary to prevent misclassification?
- Which tracing and valuation methods are defensible for mixed or transformed property, and how should disagreement between methods be recorded?
- What evidence supports the usefulness and limitations of the placement-layering-integration framework across different laundering cases?