Amendment to exemption thresholds under UK POCA published

The Proceeds of Crime (Money Laundering) (Threshold Amount) (Amendment) Order 2025 has been made and published with an accompanying explanatory memorandum. The legislation increases the financial threshold under sections 339A(2) and 339A(6A) of the Proceeds of Crime Act 2002 (POCA) from GBP1,000 to GBP3,000. These thresholds apply to two key exemptions for regulated businesses, such as banks, electronic money institutions and payment institutions, among others set out in schedule 9 of POCA, enabling them to (i) operate a customer account; or (ii) return funds when terminating a customer relationship, without committing a money laundering offence, even where criminal property is suspected (i.e., property believed to represent the proceeds of crime), provided the amount involved is below the threshold. The change aims to reduce the volume of low-value Defence Against Money Laundering (DAML) Suspicious Activity Reports (SAR), which in 2024 accounted for 23,000 submissions but only 0.1% of assets denied. A DAML SAR can be submitted for transactions above the threshold, which means a criminal offence will not be committed by the regulated entity, although the transaction is frozen pending the outcome of the review of the transaction or the lapse of three months. A review of the exit and pay away exemption introduced via the Economic Crime and Corporate Transparency Act 2023 is scheduled for 2026.

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