Guidance

Guidance on the exemptions from the money laundering obligations and money laundering reporting obligations in the Proceeds of Crime Act 2002

Updated 31 July 2025

1. Introduction

The purpose of this guidance is to set out the government position on exemptions relating to the money laundering obligations in the Proceeds of Crime Act 2002 (POCA) as amended by the Serious Organised Crime and Police Act 2005, the Proceeds of Crime (Money Laundering) (Threshold Amount) Order 2022, the Economic Crime and Corporate Transparency (ECCT) Act 2023, and the Proceeds of Crime (Money Laundering) (Threshold Amount) (Amendment) Order 2025.

2. Background

A person may be liable for one of the three principal money laundering offences ^{[footnote 1]} under sections 327-329 of POCA where they deal in certain ways with criminal property.

There are certain exemptions for certain businesses in the regulated sector (as defined in Part 1 of Schedule 9 to POCA ^{[footnote 2]}) in certain circumstances to the principal money laundering offences as set out in those sections:

• The operating an account exemption, which applies to a deposit-taking body, electronic money institution or payment institution, and can be found in s.327(2C); s.328(5); s329(2C)
• The paying away exemption, which applies to persons carrying on business in the regulated sector, and can be found in: s.327(2D); s.328(6); s.329(2D)
• The mixed property exemption which applies to persons carrying on business in the regulated sector, and can be found in s.327(2F)-(2G); s.328(8-9), s329(2F) -(2G)

Where these exemptions do not apply, a person can avoid committing money laundering offences by first submitting an authorised disclosure (a Defence Against Money Laundering (DAML) SAR) to the National Crime Agency (NCA) and receiving consent or deemed consent to proceed.

3. Exemption introduced by the Serious Organised Crime and Police Act 2005

Exemption for acts in operation of an account 

This exemption, introduced via the Serious Organised Crime and Police Act 2005, covers an act carried out by deposit taking bodies (banks, building societies) and electronic money and payment institutions in “operating an account” such as paying expenses – for example mortgage payments.

On 5 January 2023, the threshold amount for this exemption - the value of criminal property below which such firms can carry out a transaction without submitting a DAML – increased from £250 to £1,000 ^{[footnote 3]}. On 31 July 2025, the threshold amount increased further to £3,000^{[footnote 4]}. The use of this exemption does not apply to other actions such as returning funds when terminating a relationship with a customer.

4. Exemptions introduced by the Economic Crime and Corporate Transparency Act 2023

The ECCT Act introduced further exemptions from the principal money laundering offences:

Paying away exemption

This exemption applies for the whole of the anti-money laundering regulated sector when they end a relationship with a client or customer and for that purpose pay away property below the threshold. On 31 July 2025, the threshold amount was raised from £1,000 to £3,000 ^{[footnote 4]}.

Before transferring or handing over the money or other property, the business must have complied with their existing customer due diligence duties under the Money Laundering Regulations 2017. Compliance with customer due diligence duties in practice refers to the business applying due diligence measures to the customer or client as required by regulation 27(1)(a) of the Money Laundering Regulations 2017 and nothing in sections 327(2E)(c), 328(7)(c) and 329(2E)(c) sets any expectations as to the nature, level, standard, or completeness of any due diligence undertaken.

Mixed property exemption

This exemption enables businesses in the anti-money laundering regulated sector to allow customers proportionate access to the non-suspicious proportion of their assets.

The exemption can be used for the same account or customer as the other exemptions described above, but not within the same transaction because the mixed-property exemption requires firms to retain at least the value of assets to which the suspicion or ground for suspicion relates, and the pay away exemption can only be used when the relationship is being terminated. The mixed property exemption operates in parallel to the threshold exemption for transactions below the amount specified in section 339A(2) providing firms retain at least the value of assets to which suspicion or ground for suspicion relates.

5. Reporting exemption introduced by the Economic Crime and Corporate Transparency Act 2023

The ECCT Act separately introduced a reporting exemption under section 330 of POCA which creates a defence against the offence of failure to report, where the information only came to reporters as a result of a “status check” or “immigration check” carried out in compliance with the Immigration Act 2014.

6. Combined impact of exemptions

Firms should in any particular case consider whether they need to submit a SAR under s.330 of POCA.

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1. concealing, disguising, converting, transferring or removing criminal property from England and Wales or from Scotland or Northern Ireland (section 327 POCA); entering into or becoming concerned in an arrangement, and knowing or suspecting that it facilitates (by whatever means) the acquisition, retention, use or control of criminal property by or on behalf of another person (section 328 POCA); and acquiring, using or possessing criminal property (section 329 POCA)  ↩

2. This includes banks and credit institutions; stockbrokers and investment firms; insurance companies and insurance intermediaries; auditors, accounts, book-keepers, tax advisers; property dealers, estate agents and letting agents; trust or company formation and management; businesses offering particular legal services such as conveyancing; businesses trading in goods for cash of at least £13,000; casinos; auction platforms; cryptoasset exchange providers; and art market participants ↩

3. The Statutory Instrument increasing the threshold to £1000 can be found at:  The Proceeds of Crime (Money Laundering) (Threshold Amount) Order 2022 (legislation.gov.uk) ↩

4. The Statutory Instrument increasing the threshold from £1,000 to £3,000 can be found at: The Proceeds of Crime (Money Laundering) (Threshold Amount) (Amendment) Order 2025. Further guidance on submitting better quality SARs more generally, can be found at Guidance on submitting better quality Suspicious Activity Reports (SARs) v9.0 ↩ ↩²