The United Kingdom has officially approved a comprehensive anti-money laundering (AML) reform package for 2026, introducing 15 targeted changes to strengthen the nation’s financial crime regime while reducing unnecessary compliance burdens on firms. The Money Laundering and Terrorist Financing (Amendment) Regulations 2026 passed both the House of Commons and House of Lords on June 8, 2026, with authorities set to roll them out on a staggered basis from late June through July.
The amendment is expected to become fully effective from 30 June 2026, marking a significant shift in how UK businesses must approach customer due diligence, enhanced due diligence (EDD), and cryptoasset compliance.
Key Changes Overview
1. Narrower Enhanced Due Diligence (EDD) Triggers
The most significant reform narrows mandatory enhanced due diligence requirements for high-risk jurisdictions. Under current regulations, firms must apply EDD for transactions involving countries on both the Financial Action Task Force (FATF)’s “black list” (Call for Action countries) and “grey list” (Increased Monitoring List countries).
The new rule: Mandatory EDD will apply only to black list countries.
This change is intended to reduce the regulatory burden associated with the frequently changing grey list, giving firms greater flexibility to apply a risk-based approach. Ministers say this will improve the regime’s effectiveness while maintaining alignment with international standards.
2. Clarification on Complex and Large Transactions
The reform addresses long-standing ambiguity around when EDD applies to complex transactions. The current wording requires EDD for “complex or unusually large” transactions, which has led to overly cautious interpretations by many firms.
The revised wording: EDD applies where transactions are “unusually complex or unusually large” given the nature of the transaction.
This clarification ensures that enhanced checks focus on transactions that genuinely raise red flags rather than routine business activities.
3. Euro-to-Pound Sterling Threshold Conversion
A practical but significant change replaces euro-denominated thresholds with pound sterling equivalents throughout the Money Laundering Regulations (MLRs). For example, the commonly referenced €10,000 threshold will become £10,000.
This removes the need for firms to calculate exchange rates continuously, making compliance more straightforward and reducing administrative errors.
4. Off-the-Shelf Company Sales Explicitly Included
The updated regulations will explicitly bring the sale of off-the-shelf companies within scope for Trust or Company Service Providers (TCSPs). This addresses a perceived gap in the current AML and counter-terrorist financing regime.
New requirement: Company formation agents must now apply customer due diligence when selling off-the-shelf companies.
5. Strengthened Cryptoasset Business Rules
The reform package includes tighter rules for cryptoasset businesses, aligning the MLRs with the UK’s new financial services regulatory framework for cryptoassets.
Key amendments include:
- Refined customer due diligence (CDD) requirements for cryptoasset businesses
- Enhanced additional due diligence (ADD) provisions for unusually complex crypto transactions
- Strengthened AML regime aligning with the new cryptoasset financial services framework
6. New Provisions for Insolvent Bank Customers
The regulations introduce new provisions permitting credit institutions, in limited circumstances, to establish a business relationship with insolvent bank customers before completion of full CDD.
Subject to certain requirements, a credit institution may permit an insolvent bank customer to open an account and transact from it prior to completing Customer Due Diligence measures (including EDD where relevant), other than identifying the customer and verifying any person purporting to act on their behalf.
7. Expanded Trust Registration Service (TRS) Scope
The statutory instrument expands TRS registration requirements to include all non-UK trusts that hold an interest in UK land and property acquired before 6 October 2020.
8. Updated “High-Risk Third Country” Definition
The amendments update the definition of “high-risk third country” to align with FATF’s current lists, replacing the previous dual black/grey list approach with a single Call for Action country designation.
Supervision Reform: FCA Takes Over AML Oversight
Alongside the regulatory amendments, AML supervision responsibilities will shift to the Financial Conduct Authority (FCA) in 2026, moving from professional body supervisors such as ICAEW to sole FCA control.
Steve Smart, joint executive director of enforcement and market oversight at the FCA, stated: “We recognise the benefits of an improved regime for anti-money laundering supervision. These changes will simplify the supervision of professional services, ensure more consistent oversight and help us identify and disrupt crime”.
“The FCA will work closely with the Government, OPBAS, Professional Body Supervisors, HMRC, and the firms we will be supervising… to equip the UK to better fight financial crime”.
Parliamentary Timeline and Implementation
The draft regulations were laid before Parliament on 25 March 2026, following HM Treasury’s response to its 2024 consultation on improving MLR effectiveness.
Key dates:
- June 8, 2026: Regulations pass both Houses of Parliament
- June 2026: Commons and Lords discussion expected
- 30 June 2026: Expected effective date
- Late June–Early July 2026: Majority of provisions come into force
- 21 days after regulations made: Full implementation following Parliamentary approval
The amendments remain subject to final approval by both Houses, following which they will come into force 21 days after the day on which the regulations are made.
Government Rationale and Official Statements
Ministers emphasize 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”.
The package updates cryptoasset firm requirements, expands information-sharing powers, and closes regulatory loopholes identified in the Government’s 2024 AML review.
HM Treasury’s impact assessment states the SI makes “targeted changes to improve the effectiveness, proportionality and clarity of the UK’s anti-money laundering (AML) and counter-terrorist financing (CTF) regime and ensure maintained compliance with Financial Action Task Force (FATF) standards”.
Industry Impact and Compliance Requirements
The reforms are designed to refine existing requirements while reducing unnecessary compliance burdens on firms. However, firms must prepare for several mandatory changes:
What firms need to change now:
- Update EDD procedures to apply only to FATF black list countries
- Refine transaction monitoring to focus on “unusually complex” rather than all “complex” transactions
- Convert euro thresholds to sterling equivalents in internal systems
- Apply CDD when selling off-the-shelf companies (for TCSPs)
- Update cryptoasset compliance frameworks per new requirements
- Prepare for FCA supervision transition
ICAEW emphasizes: “Firms should continue to focus on complying with money laundering regulations (MLR) whoever their supervisory body is”.
Alignment with International Standards
The reforms ensure the UK remains aligned with FATF standards ahead of its 2026 mutual evaluation, a critical international assessment of the country’s AML/CTF effectiveness.
The Serious Fraud Office (SFO) will also respond to the FATF’s inspection of the UK as part of its 2026–2027 business plan priorities.
SFO’s Enhanced Enforcement Focus
The Serious Fraud Office published its Business Plan 2026–2027, signaling greater operational momentum underpinned by £8.3 million of additional funding.
The SFO will explore automation, artificial intelligence, and big data to transform intelligence analysis, including proactive identification of suspects and suspicious activity. Director Nick Ephgrave retires in January 2026, with Graham McNulty QPM appointed as interim director.
What This Means for UK Businesses
The 2026 AML reform package represents a significant recalibration of the UK’s financial crime regime—strengthening protections where risks are highest while reducing bureaucratic burden where risks are lower. Cryptoasset firms face the most substantial changes, while traditional financial services will benefit from clearer thresholds and narrower EDD requirements.
Firms must update their compliance frameworks before 30 June 2026 to avoid regulatory breaches. The staggered implementation through July 2026 provides a brief window for final adjustments, but preparatory work should begin immediately.