Speed brief: High Stakes POCA - Incoming changes to UK AML legislation designed to ease the SAR reporting burden

• United Kingdom

• Financial services disputes and investigations
• Fraud and financial crime

30-11-2022

As part of its crackdown on serious financial crime, the UK government published a new Economic Crime and Corporate Transparency Bill on 22 September 2022. Of particular interest are the proposed changes to the Proceeds of Crime Act 2002 (POCA). We take an in-depth look at these changes, consider the operational challenges that might arise from implementation, and review the wider implications and potential risks for regulated firms. 

The proposals include two new exemptions from the principal money laundering offences under POCA: changes to uplift the threshold amount for the first time since the law was enacted in 2002, and transformative provisions designed to allow for the ringfencing of tainted funds within a single account. According to the explanatory notes to the Bill, the inability to ringfence up until this point has apparently resulted in ‘disproportionate economic hardship to individuals unable to access their property, for example to pay rent or living expenses’ and should ‘help reduce some of the disruption faced by customers’. This is something of an unlikely benefit for the government to emphasise to the advantage of the (potentially criminal) customer. More plausible is an eye on a reduction in DAMLs, the figures for which have never been higher. Read on for a walk through of the current law, the incoming changes, and the impact for firms.