There are circumstances where reporters in the regulated sector can carry out specified activities that would otherwise constitute a money laundering offence under the Proceeds of Crime Act 2002 (POCA), without committing such an offence. These are often referred to as the DAML exemptions or the DAML thresholds. Some of the exemptions only apply to specific entities within the regulated sector, so reporters are advised to seek legal advice on the application of these exemptions to their business.
These exemptions do not remove the obligation to submit a SAR when there is knowledge or suspicion of money laundering. They only exempt reporters from the requirement to seek a DAML before proceeding with the activity.
The Proceeds of Crime (Money Laundering) (Threshold Amount) (Amendment) Order 2025 came into force on 31st July 2025, increasing the threshold amounts in section 339A of POCA from £1,000 to £3,000. This amendment applies to both the exiting and paying away exemption and the operating an account exemption.
Exemption for exiting and paying away
POCA states that a person carrying on business in the regulated sector does not commit a money laundering offence if, in the course of that business, they carry out specified acts for the purposes of terminating their business relationship with a customer or client, and the total value of the criminal property transferred is less than the threshold amount. This exemption requires that the person relying on it has also complied with their customer due diligence duties.1 The threshold amount is determined under section 339A of POCA and, as of 31st July 2025, is set at £3,000.
Please note, if the total value of the funds across several customer accounts is £3,000 or more, the reporter cannot take advantage of this exemption.
Should a member of the regulated sector seek a defence for this activity, the UKFIU is unable to process the request as there is no POCA offence triggered and we will close the case with a specific letter.
If the reporter is not within the regulated sector and seeks a defence to exit and pay away under £3,000, the UKFIU will deal with the case under existing triage criteria. Reporters should include “We believe section [xxx] of POCA does not apply to this DAML as the activity falls outside the regulated sector because…..”.
Exemption for operating an account
POCA also states that deposit-taking bodies, electronic money institutions and payment institutions do not commit a money laundering offence if they carry out specified acts in operating an account and the value of the criminal property concerned is less than the threshold amount.2 The threshold amount is determined under section 339A of POCA and, as of 31st July 2025, is set at £3,000.
A note on threshold variations
Under section 339A(3) of POCA, deposit taking institutions, electronic money institutions, and payment institutions can ask the UKFIU for a threshold variation, which, if approved by the UKFIU, will increase the threshold amount for specific acts done by that institution in operating an account to the amount set out in the UKFIU’s response.
This is called a “threshold variation”. Requests for a threshold variation can only be made with respect to acts done in operating an account. They cannot be made to vary the threshold amount for the exiting and paying away exemption.
There are two types of threshold variation that the UKFIU can consider:
- A request to pay a specified amount for a specified purpose on a specified timeline
- A request to pay a specified amount per transaction from one or more accounts for more than one purpose
The UKFIU may consult with partners to make an informed decision on a threshold variation request and, if the request is granted, the reporter will be emailed a letter providing a decision with the specific details of the variation included.
Unlike a DAML request under section 335 of POCA, there is no statutory time period attached to a threshold variation request and the UKFIU is not obliged to respond within any set timeframe. This means you cannot assume your request for a threshold variation has been granted if you do not receive a response to your request within a set timeframe. Reporters should not start applying the requested threshold amount until a response to the threshold variation request has been received from the UKFIU.
Reporters may wish to consider whether a time limited DAML request is more suitable to the specific circumstances than a threshold variation request. If seeking a time limited DAML, reporters must ensure all of the UKFIU’s best practice guidance relevant to such requests is followed.
Source: UKFIU
