The latest announcements outline legislative and regulatory adjustments to the existing AML/CFT framework, accompanied by new guidance and institutional changes to supervision. Officials frame the reforms as a shift toward a more risk‑based, “common sense” regime that targets serious criminal activity without overburdening compliant firms and ordinary consumers.
Key elements include simplification of customer verification processes, streamlined requirements for low‑risk products and customers, and steps to consolidate or clarify supervisory responsibilities. Authorities also plan targeted updates to offences, penalties and information‑sharing tools to ensure enforcement keeps pace with evolving money‑laundering and terrorist‑financing risks.
Reducing red tape for businesses
A central objective is to relieve smaller and low‑risk businesses from procedures that regulators now view as disproportionate to the underlying risk. Government statements indicate that reforms are expected to cut unnecessary paperwork, particularly around opening basic accounts, onboarding low‑risk customers and operating simple savings or payment products.
Ministers have highlighted benefits for sectors such as small retailers, professional services firms and rural or niche providers that previously faced rigid documentary requirements despite modest risk exposure. At the same time, the government has stressed that obligations remain in place for higher‑risk activities, with no general relaxation of expectations around politically exposed persons, complex corporate structures or cross‑border flows.
Simplified and risk‑based customer due diligence
One of the most prominent changes is the expanded use of simplified customer due diligence (CDD) where transactions, products or customers present demonstrably low money‑laundering and terrorist‑financing risk. Proposed measures include more flexible identity verification for low‑value accounts, clearer thresholds for simplified checks and the potential to rely on digital channels or existing data to confirm customer information.
Authorities intend to codify a more explicit risk‑based standard in the primary AML/CFT legislation and associated regulations, drawing on previous consultations with industry and supervisors. Consultation responses typically emphasised that firms were willing to apply nuanced risk assessments but required greater legal certainty that proportionate approaches would be accepted by regulators and auditors.
Changes to supervision and institutional roles
Alongside technical rule changes, the reforms include structural adjustments to the way AML/CFT supervision is organised. In some jurisdictions, the government has decided to consolidate supervisory responsibilities for certain professional services under a single public authority, such as the financial markets regulator, to replace a patchwork of multiple professional body supervisors.
Officials argue that consolidation will simplify fees, registration processes and reporting lines, while reducing duplication for firms that previously had to interact with several different supervisors. For sectors remaining under specialised agencies, the government is encouraging closer coordination and clearer allocation of responsibilities, with an emphasis on consistent application of risk‑based standards.
New legislation and amendment bills
Several of the changes will be implemented through omnibus or amendment bills that update core AML/CFT statutes and related regulations. These bills are expected to address issues such as automated formation of designated business groups, minor definitional clarifications, and powers for supervisors and financial intelligence units to obtain and analyse data more efficiently.
Draft legislative texts are being prepared for parliamentary scrutiny, with technical consultations planned to allow industry, civil society and supervisory bodies to comment on detailed drafting. Governments have signalled that, subject to parliamentary timetables, key measures are intended to take effect within the current legislative session, giving firms a defined period to adjust policies and systems.
Stronger powers for regulators and FIUs
While much of the public messaging centres on easing compliance burdens, the reform narrative also stresses enhanced capabilities to detect and deter sophisticated financial crime. Proposals include new or updated powers for financial intelligence units to access transaction data, cross‑match information and share intelligence with domestic and international partners.
In addition, governments plan to modernise offences and penalties under AML/CFT laws to ensure that sanctions for serious, repeated or systemic breaches remain “effective, proportionate and dissuasive” in line with international standards. These updates aim to deter organised crime and terrorism financing while giving enforcement agencies clearer tools to respond to non‑compliance by regulated entities.
Guidance, consultation and industry engagement
Authorities acknowledge that the success of the reforms depends heavily on practical guidance that helps firms translate high‑level risk‑based principles into day‑to‑day operations. Governments and supervisors have therefore committed to issuing updated rulebooks, sector‑specific examples and FAQs, along with transitional support for firms adapting to the new settings.
Earlier consultations attracted responses from banks, non‑bank financial institutions, designated non‑financial businesses and professions, law enforcement bodies and advocacy groups, many of whom called for clearer expectations and more consistent supervisory practice. Officials say that feedback has helped refine the balance between flexibility and certainty, particularly around when simplified measures are acceptable and how low‑risk classifications should be documented.
Impact on small firms and consumers
Small and medium‑sized enterprises (SMEs) are a primary focus of the red‑tape reduction agenda, with the government highlighting expected savings in staff time and compliance overheads. Measures such as streamlined onboarding for basic products, simplified checks for well‑understood low‑risk customer groups and reduced duplication in reporting are intended to free up resources for core business activity.
For consumers, especially younger or financially marginalised groups, officials anticipate easier access to basic accounts and digital financial services that previously involved relatively onerous identity requirements. However, authorities maintain that safeguards will remain in place, including transaction limits and ongoing monitoring, to ensure that simplified processes are not exploited by criminals.
Alignment with international standards
The reforms sit against a backdrop of evolving global expectations from bodies such as the Financial Action Task Force (FATF), which promotes risk‑based implementation of AML/CFT standards. Governments emphasise that streamlining does not represent a relaxation of international commitments, but rather an attempt to focus resources where they have the greatest impact on genuine risk.