DAML requests in practice: how the consent regime actually works

DAML requests in practice: how the consent regime actually works

The Defence Against Money Laundering request — universally referred to as a DAML — is one of the most misunderstood mechanisms in the UK’s financial crime framework. It is distinct from a standard Suspicious Activity Report. It has a specific legal structure, precise timelines, and a consequence — deemed consent — that operates automatically in the reporter’s favour if the National Crime Agency does not respond within the statutory period. Yet MLROs who have never had to use the DAML mechanism are routinely unfamiliar with how it actually works, and those who have used it often discover that the operational reality differs from the theoretical framework in ways that matter.

This article sets out the consent regime as it operates in practice — the legal framework, the timelines, the procedural requirements, and the points where firms most commonly make avoidable mistakes.

When a DAML is required — and when a standard SAR suffices

The distinction between a SAR and a DAML is the distinction between reporting suspicion about a past or completed transaction and seeking authorisation to proceed with a transaction that would otherwise expose the firm to criminal liability.

A standard SAR is filed where the firm knows or suspects that criminal property has passed through its systems, or that a customer has been involved in money laundering or terrorist financing. Filing the SAR satisfies the reporting obligation under the Proceeds of Crime Act 2002. The firm is not seeking permission to do anything — it is disclosing information about what has happened or what it suspects.

A DAML is required where the firm is about to carry out a transaction — or is currently holding funds pending a decision — that it knows or suspects involves criminal property. Processing the transaction without authorisation would constitute a money laundering offence under sections 327, 328 or 329 of POCA 2002. The DAML is the mechanism through which the firm seeks the NCA’s consent to proceed, thereby obtaining a statutory defence to what would otherwise be criminal conduct.

The practical trigger is a proposed transaction combined with suspicion that the proceeds are criminal. A customer instructing a transfer that the MLRO suspects represents the proceeds of fraud, a redemption request where the MLRO suspects the invested funds were criminal in origin, or a payment instruction that the MLRO believes would constitute money laundering if executed — each of these requires a DAML, not merely a SAR.

The seven-day moratorium

Once a DAML is submitted through SARs Online and received by the NCA’s UK Financial Intelligence Unit, a seven-working-day moratorium begins. During this period the firm must not process the transaction. The NCA has seven working days to either grant consent or refuse it.

If the NCA grants consent, the firm can proceed. If the NCA refuses consent, a further moratorium of 31 calendar days begins, during which the NCA investigates and may apply to a court for a restraint order or other enforcement action. If the NCA does not respond within the initial seven working days, consent is deemed to have been granted — the firm can proceed as if it had received explicit authorisation.

The deemed consent mechanism is significant in practice. The NCA receives several hundred thousand SARs per year and a much smaller number of DAMLs. Not all DAMLs receive an explicit response within seven working days. Where deemed consent operates, the firm has a complete statutory defence to any money laundering charge arising from the transaction — provided the DAML was properly submitted and the seven working days elapsed without a refusal.

What the NCA actually needs to process a DAML

A DAML that does not contain sufficient information to allow the NCA to assess it promptly is a DAML that risks being processed slowly or generating a request for further information that extends beyond the seven-day window. The NCA needs enough intelligence to make a decision — and the intelligence in the DAML is what it has to work with.

An effective DAML contains: the specific transaction the firm is seeking consent to process, including the amount, currency, counterparties and account details; the basis for the suspicion — not just that there is suspicion, but why; the predicate offence suspected, to the extent the MLRO can identify it; any intelligence about the parties involved that the firm holds, including account history and any previous SAR activity; and a clear statement that this is a consent request rather than a standard disclosure. DAMLs submitted through SARs Online should be clearly flagged as consent requests at the outset.

The quality of the DAML matters for the speed of the NCA’s response. A well-constructed DAML that clearly articulates the transaction, the suspicion and the predicate offence gives the UKFIU reviewer enough to make a rapid decision. A vague or incomplete DAML requires the reviewer to seek additional information, which consumes time that the firm may not have if there is a customer relationship, a payment deadline or a legal obligation to execute the instruction.

The 31-day moratorium and what happens during it

Where the NCA refuses consent within the initial seven working days, the 31-day moratorium begins. During this period the firm continues to hold the funds or decline to process the transaction. The NCA uses the 31 days to investigate and, where it has grounds, to apply to the Crown Court for a restraint order under the Proceeds of Crime Act. A restraint order, if granted, freezes the relevant assets and gives law enforcement time to pursue confiscation proceedings.

If the 31-day moratorium expires without a court order being obtained, the firm can proceed with the transaction on the basis that it has a deemed consent to do so. In practice, a refusal followed by a 31-day moratorium typically indicates that the NCA has identified the funds as linked to known criminal activity and is actively seeking to restrain them. The realistic expectation is that a court order will follow.

The firm’s obligations during the 31-day moratorium include maintaining the hold on the funds and not tipping off the customer about the DAML or the moratorium. The tipping-off offence under POCA 2002 applies with full force — the firm cannot tell the customer that it has filed a DAML or that their transaction is being held pending law enforcement review.

Common MLRO mistakes with the DAML regime

The most frequent error is failing to recognise when a situation requires a DAML rather than a standard SAR. An MLRO who files a SAR and then processes the transaction — because they believe filing the SAR satisfies their obligations — has not sought consent and therefore has no statutory defence if the processed transaction constitutes a money laundering offence. The SAR discloses the suspicion. The DAML is what authorises the firm to proceed despite that suspicion.

The second common error is submitting a DAML too late. The seven-day moratorium begins from the date the NCA receives the DAML — not from the date the MLRO identified the suspicion. If the customer’s instruction has a payment deadline and the MLRO delays submitting the DAML for two or three days while investigating further, the effective moratorium is shortened and the firm may find itself in a position where deemed consent has not yet operated but the customer is demanding their funds.

The third error is inadequate documentation of the moratorium period. The firm should record precisely when the DAML was submitted, when the seven working days expire, whether a response was received and when, and on what basis the decision to proceed or continue holding was made. This documentation is what the firm relies on if the transaction is later scrutinised by law enforcement, the FCA or a court.

FD Capital places MLROs and deputy MLROs in FCA-regulated firms across all sectors. Understanding the DAML regime — and designing the internal processes that make it work effectively under operational pressure — is a core competency for any MLRO at a firm where the risk of dealing in criminal property is material.

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