Guidance On Money Laundering Reporting Obligations
Update
The purpose of this guidance is to set out the government position on money laundering reporting obligations in the Proceeds of Crime Act 2002 (POCA) as amended by the Economic Crime and Corporate Transparency (ECCT) Act 2023 following Royal Assent.
Reporters should consider how they can apply this guidance to streamline their reporting process and to maintain the wider effectiveness of the suspicious activity reports (SARs) regime.
A person may be liable for one of the three principal money laundering offences under sections 327-329 of POCA where they deal in certain ways with criminal property. A person can avoid committing these offences by first submitting an authorised disclosure (a Defence Against Money Laundering (DAML) SAR) to the National Crime Agency (NCA) and receiving consent or deemed consent to proceed.
On 5 January 2023, the threshold amount specified in section 339A of POCA increased from £250 to £1,000 for acts in operation of an account (such as mortgage payments) maintained with a bank or similar firm. This does not apply to other actions such as returning funds when terminating a relationship with a customer.
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 a transaction without submitting a DAML, in operating an account for a customer, without committing one of the main money laundering offences under POCA.
Reporting exemptions introduced by the Economic Crime and Corporate Transparency Act
In addition to the raised threshold for acts in operation of an account, the ECCT Act has introduced further DAML exemptions from the principal money laundering offences to:
- Exempt the whole of the AML regulated sector (beyond those to whom the threshold exemption already applies, to include those such as the legal sector, accountancy sector and casinos) when they end a relationship with a customer and pay away property with a value below £1,000. Before transferring or handing over the money or other property, the business must have complied with their existing customer due diligence duties under the Money Laundering Regulations 2017. Compliance with customer due diligence duties in practice refers to the business applying due diligence measures to the customer or client as required by regulation 27(1)(a) of the Money Laundering Regulations 2017 and nothing in sections 327(2E)(c), 328(7)(c) and 329(2E)(c) sets any expectations as to the nature, level, standard, or completeness of any due diligence undertaken.
- Clarify the handling of mixed assets where only part of the assets are suspected to be criminal proceeds. This exemption will enable businesses in the regulated sector to allow customers proportionate access to the non-suspicious proportion of their assets.