UK Treasury Increases DAML SAR Threshold from £250 to £1,000

The government of the United Kingdom has issued guidelines on money laundering reporting requirements in connection with the DAML (defense against money laundering) exemption provisions outlined in the Economic Crime and Corporate Transparency Act of 2023 (ECCT).

The guidance seeks to communicate the government’s stance on reporting money laundering under the Proceeds of Crime Act 2002 (POCA) as amended by ECCT. The guidelines also highlight how the exemptions operate collectively.

The suspicious activity reporters may use this guideline to streamline the reporting process and ensure the effectiveness of SARs (suspicious activity reporting).

UK Threshold for Reporting DAML SAR

Dealing with money obtained through illegal means in certain ways can make a person liable for one of the three main money laundering offenses described in sections 327-329 of POCA.

To avoid these offenses, a person can first submit an authorized disclosure (DAML SAR) to the National Crime Agency (NCA) and get approval or consent to proceed.

As of 05 January 2023, the threshold amount described in section 339A of POCA  saw an increase from £250 to £1,000 for activities involved in the operation of an account, such as mortgage payments, within a bank or a similar institution. However, the amendment doesn’t extend to other activities like the return of funds during the termination of a customer relationship.

The threshold amount refers to the value of illegal money. Below this amount, a bank or similar sector can conduct a transaction while operating a customer’s account without submitting a DAML. By ensuring this, financial institutions can prevent money laundering offenses as described in the POCA.

Reporting Exemptions by the Economic Crime and Corporate Transparency Act

Besides increasing the threshold for actions in account operation, the ECCT Act has introduced more exemptions from the main money laundering offenses to;

Provide an exemption for the entire AML-regulated sector, including legal, accounting, and casinos, from certain rules when terminating a customer relationship and transferring property valued under £1,000. The businesses must adhere to their customer due diligence duties as per the Money Laundering Regulations 2017, before moving money or property.

Clarify the process for handling mixed assets where only a part of the assets is suspected of being involved in criminal activities. This exemption allows regulated sector businesses to permit customers fair access to the non-suspected part of their assets.

About DAML SARs

A person can request defense against money laundering (DAML) from NCA in a case when he suspects that the property intended for dealing is linked to criminal activity and there is a risk of committing money laundering under the Proceeds of Crime Act 2002. SARs are somehow different from DAML. SARs refer to the reporting of suspicious activities and are submitted when someone has reasonable grounds to suspect money laundering.