Money Laundering Regulations 2026 and Updating AML Policies
Apr
Stay ahead of the curve when it comes to the Money Laundering and Terrorist Financing (Amendment) Regulations 2026. This article gives an overview of the instruments’ key amendments and provides guidance and resources for updating your anti-money laundering compliance program.
Draft Money Laundering Regulations
The draft Statutory Instrument (SI) was laid before the House of Commons and the House of Lords on 25th March 2026. It is expected to come into force late June or early July 2026. The amendments come in response to the HM Treasury’s consultation in 2024 and will amend the existing Money Laundering and Terrorist Financing Regulations (MLR).
The aim of the instrument is to improve the effectiveness, proportionality and clarity of the UK’s anti money laundering regime. Furthermore, the revisions and additions to the MLR will ensure that compliance with the Financial Action Task Force (FATF) standards is maintained.
Key Amendments
- Updates currency thresholds from euros to sterling to ensure consistency with the UK’s financial crime prevention framework.
- Changes have been made to customer due diligence (CDD) and enhanced due diligence (EDD) provisions.
- References to a ‘high-risk third country’ have been replaced by ‘FATF call for action country’.
- References to ‘complex or unusually large’ transactions are replaced with ‘unusually complex or unusually large in each case given the nature of the transaction’.
- Strengthening the regime and due diligence for cryptoasset businesses to align with the Financial Services and Markets Act 2000 (Cryptoassets) Regulations 2026.
- Updates to the Trust Registration Service (TRS) requirements.
- Enhanced information-sharing and cooperation between AML/CTF supervisors and other public bodies.
Regulations Update Objectives
The explanatory memorandum that accompanies the draft Statutory Instrument sets out the main objectives of the MLR amendments. One of the main aims is to close specific regulatory gaps, thus ensuring a more effective regime. The amendments also support a more risk-based and proportionate approach, with particular emphasis being on customer and enhanced due diligence. Adding clarity to unusual and complex transactions and narrowing the EDD requirement for high-risk jurisdictions are two other central objectives.
High-Risk Third Countries
From February 2026, the FATF identifies two categories of higher risk jurisdictions. These are the high-risk (‘black list’) jurisdictions and the increased monitoring (‘grey list’) jurisdictions. Under the current MLRs, enhanced due diligence is required for a ‘high-risk third country’. However, the 2026 amendments specifically target countries such as Iran, North Korea and Myanmar, who are on the FATF black list.
Updates to Our AML Templates
As many of the MLR amendments are aimed at making the regulations more effective and suitable for the UK framework, Know Your Compliance Limited have already made a significant number of updates to our AML templates and policies. We have revised currency threshold content, updated due diligence controls and utilise the FATF call to action country list in the policy templates.
The revised regulations also focus heavily on updates to due diligence requirements for both the standard customer due diligence and the enhanced due diligence procedures. Again, we have already updated our due diligence policy templates accordingly so that firms can be compliant ahead of time.
Additional Resources
You can view the existing Money Laundering Regulations and compare them with the MLR amendments 2026. This will help you to visualise the revisions and additions applicable to your business. The Government have also published an explanatory memorandum to support the changes.
