Policy background Defence Against Money Laundering (DAML)
POCA provides the statutory basis for the principal money laundering offences in the UK. These offences are set out in sections 327, 328 and 329 of POCA. In certain circumstances, a person can seek consent from the NCA, or other specified officers, to deal with property in a way which would otherwise constitute one of the principal money laundering offences. Such consents must be sought by making an authorised disclosure as specified in section 338 of POCA. Authorised disclosures are commonly referred to as Defence Against Money Laundering Suspicious Activity Reports, or "DAMLs". If the reporter gets consent under s335, they do not commit a principal money laundering offence in POCA when dealing with that property in a way that is covered by the consent, and after seven working days have passed the reporter can assume that they have consent.
	Additionally, sections 327, 328, 329 and 339A of POCA include provisions that currently allow certain businesses only, in certain circumstances, to process transactions where there is knowledge or a suspicion of money laundering, if the transaction is below a threshold amount, without having to submit a DAML to the NCA and without committing a principal money laundering offence. From 5 January 2023, the threshold amount for acts done by deposit-taking bodies, e-money, and payment institutions in operating an account is £1,000 unless a higher amount is specified in accordance with section 339A of POCA. The threshold amount provisions only apply in relation to activity undertaken in operating an account; they do not apply in relation to transactions related to the opening or closing of an account, or when a deposit-taking body first suspects that the property is criminal.
	Due to the significant rise in authorised disclosures submitted to the NCA in recent years – increasing from 34,543 in 2018/19 to 62,341 in 2019/20 – customers are sometimes left waiting for seven days until the consent period has passed and consent can be assumed, before being able to process their transactions. This can cause significant disruption to individuals and businesses. Further, businesses are unable to inform their customers of the reason for the delay, as this could amount to a tipping off offence under POCA section 333A or 342. This provision will help reduce some of the disruption faced by customers.
	Certain businesses (especially those in the regulated sector, defined in Schedule 9 to POCA) deal with property belonging to clients or customers. Where they suspect money laundering, it is common for those businesses to prevent access to any of that property, even where their suspicion relates only to part of the value of that property. This can result in disproportionate economic hardship to individuals unable to access their property, for example to pay rent or living expenses.
	The amendments made by this Act will introduce exemptions from the principal money laundering offences in two circumstances:
where a business in the regulated sector ends a business relationship with a client or customer and for that purpose hands over property worth less than £1,000; and
where a business in the regulated sector is dealing with property for a client or customer and keeps hold of property worth at least as much as the part of that property to which the knowledge or suspicion relates.
	Where an exemption applies, a business in the regulated sector is still required to report suspicions of money laundering to the NCA under section 330 of POCA.
	The exemptions do not apply to disclosures under the Terrorism Act 2000.