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UK Home Office Issues Guidance on Money Laundering Reporting for Accounts Under £1,000

The UK's Home Office has issued new guidance regarding money laundering reporting obligations on accounts with a balance under £1,000. The guidance emphasizes that the Defence Against Money Laundering (DAML) exemption does not permit the closure of an account with a balance under £1,000 if there is a suspicion of money laundering without reporting it to the National Crime Agency (NCA). This clarification is aimed at streamlining reporting processes and maintaining the overall effectiveness of the Suspicious Activity Reports (SARs) regime.

UK Home Office Issues Guidance on Money Laundering Reporting for Accounts Under £1,000

The guidance is in accordance with the Proceeds of Crime Act 2002 (POCA), as amended by the Economic Crime and Corporate Transparency (ECCT) Act 2023. Individuals engaging in activities involving criminal property may be held liable for money laundering offenses unless they submit an authorized disclosure known as a DAML SAR to the NCA and receive consent to proceed.


A significant change, effective from January 5, raised the threshold amount under S339A of POCA from £250 to £1,000 for actions related to the operation of an account, such as mortgage payments. However, this change does not apply to other actions, such as returning funds when terminating a customer relationship.

COMPANY FORMATION &   DOMICILATION SERVICES

The ECCT Act introduces further DAML exemptions, including exempting the entire Anti-Money Laundering (AML) regulated sector when ending a relationship with a customer and paying away property below £1,000. Businesses must comply with existing customer due diligence duties under the Money Laundering Regulations 2017 in such cases.


Other exemptions clarified in the guidance include the handling of mixed assets and a reporting exemption under section 330 of POCA related to information obtained through compliance with the Immigration Act 2014. These exemptions aim to provide flexibility in reporting obligations while maintaining robust anti-money laundering measures.


The Home Office encourages firms to assess each case individually to determine the necessity of submitting a SAR under section 330 of POCA. The guidance seeks to offer clarity on the evolving landscape of money laundering reporting obligations and the exemptions introduced by the ECCT Act, with the goal of enhancing efficiency and effectiveness in combating financial crime.

By fLEXI tEAM


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