Money laundering (ML) is an illegal practice aimed at concealing or disguising the true nature, origin, location, ownership, or control of money and/or assets obtained through unlawful means. This criminal activity seeks to give a facade of legality to assets from illegal sources by involving them in legitimate activities to obscure their origins.

The money laundering process involves three fundamental stages:

1. Placement: In this stage, the illicit money or assets are introduced into the financial system through various methods such as deposits into bank accounts, purchasing assets, or investing in legitimate businesses.

2. Layering: During this phase, the illegal assets are moved and divided into multiple financial transactions to make tracing them difficult and to obscure their illicit origin. This typically involves transferring between accounts, buying and selling assets, and international movements.

3. Integration: In the final stage, the now "clean" assets are reintegrated into the financial and economic system, appearing to have a legal origin. Criminals may use these assets to acquire goods and services, make investments, or engage in any other economic activities without raising suspicion.

Money laundering poses a serious threat to the integrity of the financial and economic systems, as it allows criminals and criminal organizations to operate without exposing their illegal sources of income. Additionally, it can facilitate the financing of illicit activities such as terrorism, drug trafficking, and organized crime.

To effectively combat money laundering, countries and financial institutions implement rigorous compliance policies and controls, such as Know Your Customer (KYC) and the detection of suspicious transactions. These measures aim to prevent and detect illegal activities, ensuring transparency and legality in financial operations and thereby protecting the integrity of the global financial system.