Money laundering occurs when criminals attempt to conceal the origin of money obtained from criminal activities, such as drug trafficking or corruption, by converting it into a legitimate source.
Money laundering happens in three phases. Placement: getting illegally earned money into the financial system. Layering: obscuring the origin of the money through a series of transactions. Integration: using the now-laundered money for legitimate purposes.
Danske Bank works to ensure that neither the bank nor customers are used for money laundering purposes.
Any business can unknowingly be part of a money laundering scheme if it for example accepts payments in money that has been earned through illegal activities. For this reason, it is important for your business to conduct due diligence checks and to question where the money of those you do business with originates.
Legitimate businesses can be involved in this illegal process, so always follow these guidelines.
- Be aware of your business partners’ purposes and intentions of doing business with you.
- Understand where your business partners’ money originates from to ensure that your business does not unknowingly become a part of a money laundering scheme.
- Have an authorised and documented vendor list.
- Educate employees about money laundering risks and ensure that due diligence procedures are followed every time a financial transaction is made.