Money laundering is the process of disguising illegal sources of money so that it looks like it came from legal sources.

The methods by which money may be laundered are varied and can range in sophistication. Many regulatory and governmental authorities quote estimates each year for the amount of money laundered, either worldwide or within their national economy. In 1996 the International Monetary Fund estimated that two to five percent of the worldwide global economy involved laundered money. However, the FATF (Financial Action Task Force), an intergovernmental body set up to combat money laundering, admitted that "overall it is absolutely impossible to produce a reliable estimate of the amount of money laundered and therefore the FATF does not publish any figures in this regard. Academic commentators have likewise been unable to estimate the volume of money with any degree of assurance. Regardless of the difficulty in measurement, the amount of money laundered each year is in the billions (US dollars) and poses a significant policy concern for governments. As a result, governments and international bodies have undertaken efforts to deter, prevent and apprehend money launderers. Financial institutions have likewise undertaken efforts to prevent and detect transactions involving dirty money, both as a result of government requirements and to avoid the reputational risk involved. Money laundering often occurs in three steps: first, cash is introduced into the financial system by some means (placement), the second involves carrying out complex financial transactions in order to hide the illegal source (layering), and the final step entails acquiring wealth generated from the transactions of the illicit funds (integration). Some of these steps may be omitted, depending on the circumstances; for example, non-cash proceeds that are already in the financial system would have no need for placement.