Money Laundering Regulations reform

The UK Government has presented its Money Laundering Regulations reforms before Parliament.

The draft Money Laundering and Terrorist Financing (Amendment) Regulations 2026 statutory instrument was set before Parliament on 25 March 2026.

It will give effect to the package of reforms set out by HM Treasury in response to its consultation, Improving the Effectiveness of the Money Laundering Regulations.

The amendments will be debated in the House of Commons and the House Lords over the coming weeks.

Key amendments to the Money Laundering Regulations that Scottish legal professionals should pay particular attention to include:

• Regulation 12: The list of activities that bring a legal practice within the scope of the Money Laundering Regulations has been expanded to include the sale of an “off the shelf” firm.
• References to “complex or unusually large” transactions have been revised to read “unusually large or unusually complex” in the following provisions:
  • Regulation 19(4)(a)(i)(aa)
  • Regulation 19A(4)(a)(i)(aa)
  • Regulation 33(1)(f)(i)
• The monetary thresholds in Regulation 27 have been converted from euros to pounds sterling.
• References to a “high risk third country” have been replaced with the term “FATF Call for Action Country” in Regulations 33 and 39.
• Various amendments to the provisions on Excluded Trusts set out in Schedule 3A.
• Regulation 29: where a financial institution provides a legal practice with a pooled client account, the practice will be required to provide the financial institution with information identifying the underlying clients whose funds are deposited into that account. However, a practice may lawfully decline to disclose this information when it would infringe legal professional privilege and/or the practice’s confidentiality obligations.

Gemma Turnbull, Head of AML at the Law Society of Scotland, said: “The UK Government’s amendments to the Money Laundering Regulations will impact all Scottish legal practices that undertake work falling within the scope of the Regulations.

“Although these amendments have not yet come into law and are still subject to debate, I encourage in scope practices to familiarise themselves with the proposed amendments and begin planning any internal changes that may be required. This would start with a review of their Practice Wide Risk Assessment and Policies, Controls and Procedures documentation.

“I can also advise that the Legal Sector Affinity Group Guidance will be amended accordingly and released in due course.”