United Kingdom AML regulations

Overview of UK AML regulations

The United Kingdom operates one of the most comprehensive AML frameworks globally. The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017) form the primary legislative framework, transposing the EU's 4th and 5th Anti-Money Laundering Directives into UK law. Post-Brexit, the UK has maintained and in some areas strengthened these requirements through the Sanctions and Anti-Money Laundering Act 2018.

Key legislation

The UK regime rests on a handful of statutes. These are the ones a regulated firm works with day to day.

Money Laundering Regulations 2017

The MLR 2017 sets out the obligations for regulated businesses including customer due diligence, ongoing monitoring, record-keeping, and suspicious activity reporting. It applies to a wide range of non-financial institutions including estate agents, legal professionals, accountants, TCSPs, and high-value dealers.

Proceeds of Crime Act 2002

POCA creates the criminal offences of money laundering and establishes the framework for confiscation of criminal proceeds. It requires any person who knows or suspects that money laundering is taking place to file a SAR with the National Crime Agency.

Sanctions and Anti-Money Laundering Act 2018

SAMLA provides the legal basis for the UK's autonomous sanctions regime post-Brexit. OFSI implements and enforces financial sanctions. Designations are published on the UK Sanctions List, maintained by the FCDO.

Supervisory bodies

AML supervision in the UK is shared. Which body supervises you depends on your sector and, for professionals, your membership body.

Financial Conduct Authority (FCA)

The FCA supervises financial services firms for AML compliance and has imposed some of the largest AML fines in UK history.

HMRC

HMRC acts as the AML supervisor for businesses that do not have a professional body supervisor, including letting agents, art dealers, and precious metals dealers.

Professional body supervisors

Professional body supervisors include the Solicitors Regulation Authority (SRA) for law firms and ICAEW and ACCA for accountants. HMRC supervises estate and letting agents, high-value dealers, trust and company service providers and other businesses without a professional body.

DNFBP obligations in the UK

UK non-financial institutions must conduct a firm-wide risk assessment, implement CDD procedures, screen against sanctions lists (including OFSI and OFAC), appoint an MLRO, provide staff training, maintain records for at least five years, and file SARs when required. Automated screening solutions are increasingly expected by supervisors.

Recent enforcement activity

UK regulators have significantly increased enforcement activity against non-financial businesses. The SRA has sanctioned multiple law firms for AML failings, while HMRC has fined estate agents and high-value dealers for failure to register for AML supervision. See our AML Penalty Tracker for recent enforcement actions.