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 amendment is expected to be effective from 30 June 2026.
The changes narrow mandatory enhanced due diligence requirements for certain high-risk jurisdictions, giving firms greater flexibility to apply a risk-based approach. The package also updates requirements for cryptoasset firms, expands information-sharing powers and closes 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 to the Money Laundering Regulations
The upcoming amendments are designed to refine existing requirements and include:
- Changes to enhanced due diligence (EDD) requirements
Currently, firms are required to apply EDD in situations involving high-risk third countries defined by the Financial Action Task Force (FATF)’s 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.
- Complex and large transactions wording clarification
A second refinement to EDD requirements 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 out of place transactions that raise a red flag.
- Simplifying thresholds and closing gaps
The statutory instrument also introduces practical changes to simplify compliance and close perceived gaps.
Euro-denominated thresholds will be replaced with pound sterling values. For example, the €10,000 threshold will become £10,000, removing the need to calculate exchange rates and making compliance more straightforward.
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.