Important Update To The DAML Regime

The Economic Crime and Corporate Transparency Act 2023 (ECCT Act) has introduced two further exceptions to the need to submit a Defence against Money Laundering (DAML), significantly reducing the administrative burden for financial institutions.

Background

When a financial institution identifies that it is holding the proceeds of crime, it will need to submit a DAML to the National Crime Agency (NCA) to avoid committing money laundering itself. This process is not only time-consuming and costly for financial institutions, but they also have to tread the tightrope of waiting for up to seven days without tipping off their customer before processing the transaction.

On 5 January 2023, the threshold amount for a DAML for operation of an account was raised from £250 to £1,000. This meant that a financial institution could make mortgage payments less than £1,000 without submitting a DAML to the NCA. This did not apply to other actions such as terminating a