The Proceeds of Crime (Money Laundering) (Threshold Amount) (Amendment) Order 2025
This order amends the Proceeds of Crime Act 2002, increasing the money laundering threshold from £1,000 to £3,000 for transactions under section 339A(2) and (6A).
This affects banks and firms handling accounts, and businesses in the regulated sector returning property to customers.
The increase aims to reduce administrative burdens on businesses while preserving the focus on significant money laundering activities.
The amendment followed parliamentary review and approval.
Arguments For
Reduced administrative burden on businesses: Raising the threshold simplifies compliance for smaller transactions, freeing up resources for businesses and reducing the cost of compliance.
Focus on higher-value transactions: The change allows law enforcement to prioritize investigations into larger, potentially more serious money laundering activities.
Alignment with inflation and economic conditions: The increase reflects the changing economic climate, adjusting the threshold to better account for inflation and the increased cost of living. The previous increase from £250 to £1,000 in 2022 suggests a pattern of periodic adjustments.
Legal basis: The amendment is made under the clearly defined powers granted by section 339A(7) of the Proceeds of Crime Act 2002 and after parliamentary approval.
Arguments Against
Potential increase in low-level money laundering: A higher threshold may make it easier to launder smaller sums of illicit money undetected, potentially undermining efforts to curb money laundering.
Disproportionate impact on small businesses: The increased threshold may not adequately compensate for the additional administrative burdens already imposed on small and medium-sized businesses by existing regulations.
Need for further investigation: Without a thorough assessment of the potential consequences, the increase could lead to unforeseen challenges related to money laundering and the ability of enforcement agencies to track financial transactions.
Alternative approaches: There might be other methods to improve the effectiveness of the anti-money laundering regime (e.g., improved technology, enhanced training for investigators), which did not explicitly investigated by this ordinance.
- Citation, commencement and extent (1) This Order may be cited as the Proceeds of Crime (Money Laundering) (Threshold Amount) (Amendment) Order 2025. (2) This Order comes into force on the day which falls 21 days after the day on which it is made. (3) This Order extends to England and Wales, Scotland and Northern Ireland.
This section provides the official title, effective date (21 days after the signing), and geographical scope of the order.
The order applies across all four nations of the UK.
- Variation of threshold amount In section 339A of the Proceeds of Crime Act 2002 (threshold amounts)— (a) in subsection (2), for “£1,000” substitute “£3,000”; (b) in subsection (6A), for “£1000” substitute “£3,000”.
This section details the changes to the Proceeds of Crime Act 2002.
Specifically, it increases the money laundering threshold.
Subsection (a) increases the threshold for deposit-taking bodies, electronic money institutions, and payment institutions from £1,000 to £3,000 when operating a customer's account.
Subsection (b) makes the same £1,000 to £3,000 increase for businesses in the regulated sector when ending their business relationships with a customer.
Dan Jarvis Minister of State 10th July 2025 Home Office
This section shows the signature and ministerial authority for the order, indicating the Home Office's role in its creation and approval.
Explanatory Note (This note is not part of the Order) This Order increases from £1,000 to £3,000 the threshold amounts specified in section 339A(2) and (6A) of the Proceeds of Crime Act 2002 (c. 29) (“POCA”). The threshold amount in section 339A(2) is the value of criminal property below which a bank or similar firm (a deposit-taking body, electronic money institution or payment institution) can carry out a transaction, in operating an account for a customer, without committing one of the money laundering offences in sections 327 to 329 of POCA. The threshold in section 339A(2) was raised from £250 to £1,000 by the Proceeds of Crime (Money Laundering) (Threshold Amount) Order 2022 (S.I. 2022/1355). The threshold amount in section 339A(6A) is the value of criminal property below which a person carrying on business in the regulated sector (as defined in Part 1 of Schedule 9 to POCA) can return money or other property to a customer or client, in order to end their business relationship, without committing one of the money laundering offences in sections 327 to 329 of POCA. An Economic Note on the effect this instrument will have on the costs of business and the public sector is available on the legislation.gov.uk website.
The explanatory note clarifies the impact of the amendments.
It explains that the change affects the thresholds for both banks and businesses, clarifying the thresholds in relation to specific actions within the Proceeds of Crime Act 2002, and referencing previous adjustments.
It also notes the availability of a further economic analysis assessing the impact of the order on business and public sector costs.
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