Placement (AML stage)
Overview
Placement is the first stage of money laundering where illicit cash enters the financial system. Common typologies include structuring/smurfing to avoid CTR thresholds, cash-intensive businesses, commingling, mules, casinos, and prepaid instruments.Controls involve cash handling limits, KYC on high-cash merchants, geolocation/IP heuristics, and velocity/CTR monitoring. Effective programs link placement red flags to case management and SAR/STR filings. Because criminals rapidly move funds to layering, speed of detection matters; continuous monitoring and graph analytics can surface networks early. Training frontline staff (branches, agents, merchant acquirers) is critical.
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Related Terms
FAQ
What does placement look like in practice?
Frequent sub-threshold deposits, third-party cashing, and rapid movement to other accounts or instruments.
How do we detect it?
Threshold + velocity rules, peer group deviations, merchant risk profiling, and mule indicators.
How is it different from layering?
Placement introduces cash; layering obscures origin via complex transfers.
What are key reports?
CTRs for large cash transactions and SAR/STRs for suspicious patterns.