Legal background Defence Against Money Laundering (DAML)
The principal money laundering offences under sections 327, 328 and 329 of POCA can be committed by any person who does any of the acts specified in relation to criminal property. "Criminal property" is defined in section 340 as property which is either known or suspected to be a benefit from criminal conduct. "Criminal conduct" includes any type of UK criminal offence, as well as conduct overseas which would be an offence in the UK if committed here.
	A person does not commit a money laundering offence under section 327, 328 or 329 if they submit a disclosure under section 338 of POCA and receive consent to carry out the act or wait to carry out the act until after the 7 working days’ notice period has expired without refusal or the moratorium period after refusal has expired (see section 335).
	The "regulated sector" consists of the types of business listed in Part 1 of Schedule 9 to POCA, which are the same as those set out in regulation 8 of the MLR (where those businesses are called "relevant persons").
	A separate duty in section 330 of POCA makes it an offence for a person doing business in the regulated sector to fail to report suspicions of money laundering as soon as practicable after receiving the relevant information.
	A SAR provides information which alerts law enforcement that certain client or customer activity is in some way suspicious and might indicate money laundering or terrorist financing. Businesses in the regulated sector have an obligation to submit a SAR to the UKFIU in such circumstances or risk committing a Failure to Report offence, under the POCA, s330-332. A DAML can be made to the NCA where a reporter has knowledge, or a suspicion, that property they intend to deal with is in some way criminal.
	If consent or deemed consent is received, a DAML can provide an exemption from the principal money laundering offences in sections 327 to 329 of POCA while providing intelligence to the UKFIU. DAMLs effectively freeze a transaction until a consent decision is made by the UKFIU or seven working days have passed, after which the business can assume they have consent. This means that businesses are regularly waiting for seven working days before being able to assume consent, where no decision is given, before proceeding with an action. In that period, the reporter cannot inform the customer that the delay is because a DAML has been submitted, as telling them would amount to a potential tipping off offence. Reviewing these requests and disseminating to wider LEAs for input are the primary task of the UKFIU’s DAML Team.
	To improve the effectiveness of the system, exemptions for certain types of transaction from the principal money laundering (ML) offences i will be based on transaction value and for certain sub-categories of transactions. POCA already contains exemptions for dealings by banks and similar firms with suspected criminal property, for transactions under £1,000 in the operation of an account, and the Government would seek to extend this approach. This will reduce the disruption to individuals and customers who currently find their transaction delayed by up to seven days and will reduce the regulatory burdens on those businesses required to submit reports below the threshold. It will also free up UKFIU resource to focus on higher value asset denial opportunities.