Placement, layering and integration are a teaching model

The three stages are what a search result expects, so this page names them and then limits them. Checked against AUSTRAC's definitions page on 5 October 2026. This is general information, not legal advice. This page does not reproduce that guidance. How you report is suspicious matter reports under Tranche 2. Where the idea belongs in training is AML/CTF training. Why the regime exists is what Tranche 2 is. The sector map is /tranche-2.

The three labels, in office language

Placement is the moment proceeds of crime enter a bank, a business, or a professional's trust account. It might be a deposit, a series of smaller deposits, or a purchase that turns cash into something else. Layering is what happens next, when the money is moved, split, or passed through companies and transfers so that the first deposit is harder to see. Integration is the money coming to rest in a form a stranger would not question: a house, a shareholding, a trading company that issues invoices. Real matters do not arrive labelled. A single property settlement can be the integration of money that was placed and layered somewhere you never saw.

The value of the model is memory. A receptionist can remember that “clean at the end” does not mean “clean at the start”. The danger of the model is false precision. Staff tick “layering” because there are two companies, and they feel the analysis is done. Or they refuse to escalate because they cannot see the placement, which often sits outside the firm's file. The suspicion test does not ask you to locate all three stages. AUSTRAC asks whether you suspect on reasonable grounds that the information may be relevant to crime, that the customer is not who they claim to be, or that someone is planning to use a designated service for a money laundering or terrorism financing offence.

How to teach it without turning it into a form

• One example each, from your services. A cash receipt. A payment through a company that does not trade. A house bought with a story that changed.
• Say what you often cannot see. You may only meet the last stage. That is still enough to ask questions.
• Separate terrorism financing. Lawful money used for terrorism does not fit “crime money placed into the system”. Do not teach the three stages as the whole regime.
• Do not require the stage name in the escalation note. Require the facts, the time, and who the officer is.
• Do not tell the client the stage. That is not an explanation of a report. It is a conversation you should not be having.

Use one matter from your own work in the training, with the names removed. Show where you would have seen only the last stage, and what question the program already allows you to ask. Then show the note the officer wants: dates, amounts, what was said, and what document did not match. Leave the three labels off that note unless they genuinely help a reader inside the firm. A suspicious matter report is stronger when it contains the mismatch than when it contains the word layering. New starters copy the vocabulary they are praised for. Praise the facts.

Where this page stops

This page is the model. The plain definition of the crime-money idea is what money laundering is.

What the client pays

On FreeAML the firm suite is A$0. The firm emails the client a link. Verification is client-pays. On the public list a personal KYC check is A$20 and a company or trust KYB check is A$40. There is no subscription. Confirm the live amounts on FreeAML pricing. FreeAML does not classify a payment into a stage. The client pays to be identified. The story of the money is the firm's question.

Frequently Asked Questions