app/plugins/knowledge_base/typologies/aml/layering.md

Money Laundering Typology: Layering

Definition

Layering is the second stage of money laundering, where the illicit origin of funds is disguised through a series of complex financial transactions. The goal is to separate the money from its criminal source and make it difficult to trace.

Indicators & Red Flags

• Rapid Movement: Funds are transferred out immediately after being received (Pass-through).
• Complex Web: Multiple transfers between related accounts or shell companies.
• Round Tripping: Funds sent to another jurisdiction and returned disguised as "foreign investment".
• Account Usage: Personal accounts used for business-like volume, or business accounts used for unrelated purposes.
• Inconsistent Velocity: Transaction frequency that does not match the customer's profile.

Detection Logic

• Retention Time: Time(Credit) - Time(Debit) < 1 hour
• Flow Ratio: Total Credits ≈ Total Debits (Account balance remains near zero despite high volume)

Response

• File Suspicious Activity Report (SAR).
• Request explanation for specific "pass-through" transactions.
• Analyze counter-parties for links to known high-risk entities.