Defence Against Money Laundering threshold

IPA Insolvency Practitioner newsletter, August 2025

The Proceeds of Crime (Money Laundering) (Threshold Amount) (Amendment) Order 2025 has been published and is effective from 31 July 2025. 

The statutory instrument increases to £3,000 (previously £1,000) the threshold amount of criminal property which an insolvency practitioner can return to a customer or a client for the purposes of terminating their business relationship under section 339A of the Proceeds of Crime Act 2002 (POCA). 

What has changed? 

• The threshold in section 339A(6A) allows firms in the regulated sector (which by POCA 2002, Sch.9, para 1(k) includes the activities of a person acting as an insolvency practitioner) to return criminal property (money or other property which represents a person’s benefit from criminal conduct) to a customer/client  for the purposes of the termination of a business relationship, without committing a money laundering offence, provided the value is £3,000 or less. 

• Similarly, the threshold in section 339A(2) allows banks, building societies, electronic money institutions, and payment institutions to carry out a transaction (in operating an account for a customer) without committing a principal money laundering offence under sections 327 to 329 of POCA — provided the value of criminal property involved is £3,000 or less. 

What firms need to do 

• Update internal policies and procedures, including AML, DAML, and SAR policies, to reflect the revised threshold

• Ensure training and awareness is provided to all relevant staff, particularly those involved in AML compliance and decision-making on reporting

• Reinforce with senior management the nature of this change and its implications for risk-based controls and escalation. 

Important – CDD and SAR reporting still applies 

It is important to note that while the exemption threshold has increased, Insolvency Practitioners must continue to:  

• comply with Customer Due Diligence duties before transferring to a customer money or other property, and 

• submit a Suspicious Activity Report (SAR) if there is knowledge or suspicion of criminal property. SARs should continue to be made where appropriate, regardless of value, to enable law enforcement intervention where needed.