What counts as proceeds of crime?

Under UK law, proceeds of crime means any benefit (money, property or assets) obtained from criminal conduct, whether directly or indirectly. The definition comes from the Proceeds of Crime Act 2002. 

It underpins the UK’s anti-money laundering regime and determines when property may become “criminal property” and when money laundering offences can arise.

For regulated professionals, understanding what counts as proceeds of crime is central to recognising risk and deciding when escalation is required.

The statutory definition of proceeds of crime

The Proceeds of Crime Act 2002 (POCA) does not define “proceeds of crime” in isolation. Instead, it defines:

• criminal conduct, and
• benefit from criminal conduct

A person benefits from criminal conduct if they obtain property as a result of, or in connection with, that conduct. That benefit can be:

• Direct, such as money stolen in a fraud
• Indirect, such as assets later purchased using stolen funds

The concept of benefit is deliberately broad. It reflects the international standards set by FATF (the Financial Action Task Force), which require countries to criminalise the laundering of proceeds from a wide range of offences.

What is “criminal conduct”?

Criminal conduct means conduct that:

• constitutes an offence in any part of the UK, or
• would constitute an offence in the UK if it occurred here.

This includes offences such as:

• fraud;
• tax evasion;
• bribery;
• theft;
• sanctions breaches;
• regulatory offences carrying criminal liability.

Criminal conduct is not limited to serious organised crime. Even relatively small-scale offences can generate proceeds of crime.

What are “direct proceeds of crime”?

Direct proceeds are the most obvious category. Examples include:

• money obtained through fraud;
• cash from drug trafficking;
• funds evaded from tax;
• bribes received in a corruption scheme.

In these cases, the money or asset itself represents the criminal benefit.

What are “indirect proceeds of crime”?

Proceeds of crime also include property that represents an indirect benefit. For example:

• Fraud proceeds used to buy a property
• Stolen funds invested in a company
• Criminal income converted into shares or cryptoassets

Even if the original funds have changed form, the asset acquired can still represent the benefit from criminal conduct. This is why tracing and layering matter in money laundering cases.

Does the amount matter?

There is no minimum threshold. A small undeclared cash payment, a modest tax evasion or a minor fraud can still generate proceeds of crime. The scale may affect enforcement priorities but it does not affect the definition. For regulated firms, the issue is not value but suspicion.

Proceeds of crime and criminal property

Proceeds of crime and criminal property are closely linked but not identical concepts.

Proceeds of crime refers to the benefit obtained from criminal conduct. Criminal property, as defined in section 340 of POCA, is property that:

• constitutes or represents a benefit from criminal conduct, and
• the alleged offender knows or suspects that it represents such a benefit.

Once suspicion arises, property representing proceeds of crime may meet the definition of criminal property. At that point, the principal money laundering offences under POCA become relevant.

How proceeds of crime impact your day-to-day work

For accountants, lawyers, TCSPs, property professionals and high-value dealers, proceeds of crime may appear in everyday work through:

• client funds held in accounts;
• transaction proceeds;
• professional fees paid from suspicious sources;
• asset transfers;
• corporate restructures.

You are not required to prove that funds are proceeds of crime. You are required to recognise when there are reasonable grounds for suspicion.

Red flags such as unexplained source of funds, inconsistent explanations or opaque ownership structures do not automatically mean funds are criminal. They indicate that further enquiry is needed.

If suspicion remains after reasonable enquiry, internal reporting to your MLRO is required under POCA.

The role of the risk-based approach

The UK’s AML framework is built on the risk-based approach set by FATF. You will rarely see obvious evidence that funds are criminal. Instead, you may encounter inconsistencies, gaps in explanation or transactions that do not align with what you know about the client.

The risk-based approach requires you to:

• understand your client and their normal activity;
• question information that does not sit comfortably;
• take reasonable steps to clarify source of funds;
• escalate concerns internally where suspicion remains;
• document how and why decisions were reached.

When your risk assessments, due diligence and escalation processes are linked clearly, decisions about acting on potential proceeds of crime can be made in a proportionate, structured way rather than reactively.

Final thoughts

Proceeds of crime means any benefit obtained from criminal conduct, whether directly or indirectly. The definition under the Proceeds of Crime Act 2002 is deliberately broad and applies across a wide range of offences.

For regulated professionals, the focus is not on investigating crime. It is on recognising when funds or assets may represent a criminal benefit and responding appropriately.

When your AML framework links risk assessment, source of funds enquiries, internal reporting and audit trails in a structured way, decisions about potential proceeds of crime become clearer, more consistent and easier to evidence.