Key changes to Money Laundering Regulations

Amendments to Money Laundering Regulations came into force on 30 June 2026, aimed at improving the effectiveness of the regulatory regime, while supporting a proportionate and risk-based approach to compliance.

The Money Laundering and Terrorist Financing (Amendment) Regulations 2026 update the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017.

The changes affect several aspects of anti-money laundering (AML) compliance, including customer due diligence, enhanced due diligence, trust registration requirements, monetary thresholds and information-sharing provisions.

Firms should review their Practice Wide Risk Assessments, AML policies, controls, procedures, risk assessments and training materials to ensure that they reflect the amended requirements.

Key changes for legal firms

The amendments introduce several significant changes to the Money Laundering Regulations, including:

Enhanced due diligence for high-risk jurisdictions

The amendments narrow one of the mandatory enhanced due diligence (EDD) triggers contained within Regulation 33. Firms must now apply mandatory EDD where a client or transaction involves a jurisdiction included on the Financial Action Task Force (FATF) "Call for Action" list, rather than all jurisdictions subject to FATF increased monitoring.

However, firms must continue to identify and assess geographical risk as part of their client and matter risk assessments and apply EDD and enhanced ongoing monitoring where they identify a higher risk of money laundering or terrorist financing.

Firms must also continue to apply EDD in all other circumstances required by Regulation 33 of the Money Laundering Regulations.

Clarification of EDD requirements for certain transactions

The amendments clarify that firms must examine transactions that are unusually complex or unusually large in the context of the client and the matter. This change is intended to focus enhanced scrutiny on transactions that genuinely present an elevated risk of money laundering or terrorist financing.

Conversion of monetary thresholds to sterling

The Regulations replace a number of euro-denominated thresholds with sterling equivalents. This change simplifies compliance by removing the need for firms to monitor exchange rates and calculate sterling conversions when applying relevant thresholds.

Addition of service in relation to TCSP

Regulation 12(2) has been extended to bring an additional service within the scope of the Money Laundering Regulations, namely the “sale of an off-the-shelf firm”. An off-the-shelf firm refers to a practice which, at the point of creation, either does not carry on any business or carries on business that is not the principal activity of the TCSP.

Changes to Trust Registration Service requirements

The amendments make a number of changes to the Trust Registration Service (TRS) framework, including amendments to registration requirements and exemptions for certain trusts. Firms involved in trust work should consider whether the changes affect their existing processes and procedures.

What legal firms should do

Legal firms should review and update where appropriate their:

• Practice-wide risk assessments

• AML policies, controls and procedures

• Client and matter risk assessment templates

• Customer due diligence and enhanced due diligence processes

• Staff training materials and

• Trust registration procedures, where applicable.

Firms should also ensure that relevant staff understand the changes and that internal documentation reflects the amended regulatory requirements.