Money Laundering and Terrorist Financing (Amendment) Regulations 2026
- Issuing authority
- HM Treasury / FCA / HMRC
- Effective date
- 30 June 2026 (Certain cryptoasset correspondent provisions apply from 1 February 2027).
- Scope
- United Kingdom
Key requirements
The most significant UK MLR amendment since 2017. Four big changes: Enhanced Due Diligence (EDD) requirements narrowed from a long list of high-risk countries to just FATF Call to Action jurisdictions (currently Iran, North Korea, Myanmar); euro thresholds converted to sterling on a 1:1 basis; tighter rules for pooled client accounts held by law firms and other professional services; refined CDD/EDD requirements for cryptoasset businesses.
Quick Summary
These regulations update the UK's Money Laundering Regulations for the first time in several years. The changes include narrowing mandatory Enhanced Due Diligence (EDD) requirements to countries subject to the FATF's Call for Action, replacing certain euro-based thresholds with pound sterling amounts, introducing stricter rules for pooled client accounts used by law firms and other professional service providers, and updating customer due diligence requirements for cryptoasset businesses.
What is it?
This is an update to the UK's AML rulebook. They amend the existing Money Laundering Regulations by changing how firms apply customer due diligence, enhanced due diligence, and other AML controls. They also include new rules for cryptoasset businesses and professional service firms that hold client money.
Who does it apply to?
- Banks
- Payment institutions
- Electronic money institutions
- Cryptoasset businesses
- Law firms
- Accountancy firms
- Trust and company service providers
- Estate agents
- Other businesses subject to the UK Money Laundering Regulations
Why does it matter?
These changes will affect how many UK firms manage AML risk. Some requirements will become simpler, while others will require firms to update their policies, systems, and procedures. Firms should understand the changes early so they are ready when the new rules take effect.
What should firms do?
- Review the amendments to understand how they affect existing AML procedures.
- Update customer due diligence and enhanced due diligence processes where necessary.
- Review internal policies for higher-risk customers and transactions.
- Check whether any changes affect cryptoasset services or pooled client accounts.
- Train staff on the new requirements
AboutAML Breakdown
One of the biggest changes is how firms decide when to apply Enhanced Due Diligence (EDD). Instead of using a long list of higher-risk countries, the regulations focus mandatory EDD on countries that are subject to the FATF's Call for Action, which currently includes only a small number of jurisdictions. This gives firms more flexibility to assess other countries based on their own risk assessments rather than automatically applying enhanced measures. It also updates rules for cryptoasset businesses and professional firms that manage client money, reflecting how financial crime risks have changed since the original regulations came into force in 2017.