On 1 June 2023 the National Crime Agency (NCA) published its new guidance on submitting better Suspicious Activity Reports (SARs) which can be accessed here.
This updated guidance details changes made to the threshold for reporting a Defence Against Money Laundering (DAML), in effect from 5 January 2023 in the United Kingdom, which affects banks, deposit taking firms, e-money firms and payment institutions.
By way of background, The Serious Organised Crime and Police Act 2005 amended ss.327, 328 and 329 of the Proceeds of Crime Act 2002 (POCA) and introduced a new s.339A. At the time, s.339A stated that certain firms, deposit taking bodies, e-money businesses and payment institutions do not commit an offence under ss.327, 328 and 329 of POCA if they do an act in relation to criminal property (other than concealing or disguising) in operating an account maintained with them, if the value of the property is less than the threshold amount of £250.
Criminal property is defined by s.340(3) POCA : "it constitutes a person's benefit from criminal conduct or it represents such a benefit (in whole or in part and whether directly or indirectly), and the alleged offender knows or suspects that it constitutes such a benefit."
Thereafter, on 5 January 2023 the threshold amount specified in s.339A 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.
This amendment increases the value of property that banks or similar firms can act in relation to without needing to raise a DAML to protect them against committing an offence under ss.327 to 329 POCA.
The 'Suspicious Activity Report (SARs) Annual Report 2022' published on 24 January 2023 stated that for the financial year 2021 to 2022 the number of SARs submitted to the NCA was 901,255 which was an increase of 21% on the year before.
The aforementioned amendment to s.339A POCA has been implemented to increase and improve the efficiency of the DAML regime for law enforcement agencies and deliver cost savings to the regulated sector. In consultation with the NCA the Government believes that a threshold of £1,000 would reduce the number of DAMLs submitted and reduce the burden on the reporting sectors without losing intelligence.
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