Last week, the threshold for reporting a Defence Against Money Laundering (DAML SAR) changed from £250 to £1,000 in the UK, relevant to banks, deposit taking firms, payment institutions and e-money firms.
This is in connection to the changes to the Proceeds of Crime Act (POCA) that came into force at the beginning of January 2023 for reporting thresholds where firms make a SAR report to the National Crime Agency (NCA)
On 5 January 2023, the threshold amount specified in section 339A of the Proceeds of Crime Act 2002 (POCA) was increased from £250 to £1,000. This follows the coming into force of the Proceeds of Crime (Money Laundering) (Threshold Amount) Order 2022 (SI 2022/1355) made on 15 December 2022.
The changes to the POCA in respect of DAML, relate to scenarios where following an internal report of a suspicious activity a firm is looking to ‘move money’ and as such is seeking a defence against money laundering. The exemption that exists under the POCA, changed the threshold from £250 to £1,000 where the firms in the regulated sector would not commit an AML offence if they pay away criminal property in the sum of up to £1,000 in value, if they are handing over to a customer or client money or other property owing to them, for the purpose of the termination of the business relationship. The threshold amount is the value of criminal property below which a bank or similar firm (a deposit-taking body, electronic money or payment institution ) can carry out for a transaction, in operating an account for a customer, without committing one of the main money laundering offences in sections 327 to 329 of POCA. The purpose of the change is to increase and improve efficiency of DAML regime for law enforcement, for financial services firms and for consumers, by allowing them to focus their activities on the correct high-value criminal activity areas.
More information can be found here.
What firms need to do
Firms must ensure that their policies and procedures are updated accordingly (AML Policy, SAR Policy etc) and all relevant employees, including Senior Management are aware of the changes to ensure the reporting to the NCA is performed correctly. It should be noted that disclosures SARs may still be required, irrespective of the threshold exemption, to allow law enforcement to take actions.
How we can help
If you’d like to know more about how we can assist you with your policies and procedures and ensure your framework is compliant, or any other regulatory compliance matters, please contact our specialist team here.