UK Money Laundering and Terrorist Financing Regulations 2026 Now in Effect

Parliament has approved the Money Laundering and Terrorist Financing (Amendment) Regulations 2026, introducing 15 targeted reforms that strengthen the UK's AML regime while reducing unnecessary compliance burdens. The amendments came into effect on 30 June 2026.

Parliament has approved the Money Laundering and Terrorist Financing (Amendment) Regulations 2026, introducing 15 targeted reforms to strengthen the UK's AML regime while reducing unnecessary compliance burdens on firms. The amendments came into effect on 30 June 2026.

The changes narrow mandatory enhanced due diligence (EDD) requirements for certain high-risk jurisdictions, update requirements for cryptoasset firms, expand information-sharing powers and close regulatory loopholes identified in the Government's 2024 AML review.

Ministers say the reforms will improve the effectiveness of the regime, maintain alignment with international standards and support a more proportionate, outcome-focused approach to AML supervision.

A summary of the targeted changes

1. Enhanced due diligence (EDD) — black list only

Currently, firms must apply EDD in situations involving high-risk third countries defined by the Financial Action Task Force (FATF) black list (call for action) and its grey list (increased monitoring). Under the updated regulations, mandatory EDD will only apply to black-list countries. This is intended to reduce the regulatory burden associated with the frequently changing grey list.

2. Complex and large transactions — clearer wording

A second refinement addresses ambiguity around complex and large transactions. The current wording requires EDD for "complex or unusually large" transactions. The revised wording clarifies that EDD should apply where transactions are "unusually complex or unusually large" given the nature of the transaction. This is intended to reduce overly cautious interpretations and ensure that enhanced checks are focused on transactions that are genuinely out of place and raise a red flag.

3. Simplifying thresholds

Euro-denominated thresholds will generally be replaced with the pound sterling equivalent — for example, the €10,000 threshold will become £10,000. This removes the need to calculate exchange rates and makes compliance more straightforward.

4. Closing gaps — off-the-shelf companies

The changes also clarify that the sale of off-the-shelf companies falls within the scope of AML regulations for trust or company service providers (TCSPs), ensuring customer due diligence applies across all TCSP services.

What firms should do now

Compliance teams should review their EDD policies, transaction monitoring rules and threshold settings against the amended regulations. Particular attention should be paid to:

• Removing automatic EDD triggers for FATF grey-list jurisdictions and replacing them with a documented risk-based approach.
• Updating transaction monitoring scenarios that rely on the old "complex or unusually large" wording.
• Reconfiguring systems that use euro thresholds so they reflect the new sterling equivalents.
• Ensuring TCSP onboarding workflows capture off-the-shelf company sales and apply CDD consistently.

The amendments are designed to refine existing requirements rather than introduce wholly new obligations. Firms that treat the changes as a prompt to refresh their risk assessments and control documentation will be in the strongest position when supervisors begin testing against the new rulebook.