Introduction: why 2025 marks a turning point for non-financial AML

The regulatory landscape for Designated Non-Financial Businesses and Professions (DNFBPs) has shifted fundamentally. Under the FATF Recommendations, non-financial institutions - including real estate agents, lawyers, accountants, trust and company service providers, and dealers in precious metals and stones - must now implement comprehensive anti-money laundering controls on par with their financial-sector counterparts.

The establishment of the EU's Anti-Money Laundering Authority (AMLA) in Frankfurt, the entry into force of the EU AML legislative package, and increasing enforcement activity by national supervisors mean that 2025 represents a genuine inflection point. This article analyses what has changed, the legal obligations that now apply, and the practical steps firms should take.

What changed in the EU's AML framework

The EU's 2024 AML package replaces a patchwork of national rules with a common framework. Three changes matter most for firms outside financial services.

The single EU rulebook

Prior to 2024, EU member states transposed AML Directives into national law with significant variation. Research published in the Journal of Financial Stability demonstrated that inconsistent implementation across jurisdictions was a primary weakness enabling cross-border laundering. The new EU AML Regulation (AMLR) directly applies in all member states without transposition, eliminating this fragmentation.

AMLA: direct supervisory powers

The Anti-Money Laundering Authority holds direct supervisory powers over high-risk obliged entities and can coordinate joint supervisory teams across national competent authorities. For non-financial institutions, this means a higher standard of regulatory scrutiny - particularly for TCSPs and crypto asset service providers operating across borders.

Cash payment limits and beneficial ownership registers

The legislative package introduces an EU-wide cash payment limit of €10,000 and strengthens beneficial ownership transparency requirements. High-value goods dealers, art dealers, and precious metals traders face particular scrutiny given the historical use of cash in these sectors to circumvent AML controls.

Key obligations for non-financial institutions

Whatever your sector, the core obligations are the same: know who your customer is, check them against the sanctions lists, and scale your effort to the risk.

Customer due diligence (CDD)

All non-financial institutions must conduct Customer Due Diligence before establishing a business relationship. This includes identifying and verifying the identity of customers and beneficial owners, understanding the purpose and intended nature of the business relationship, and conducting ongoing monitoring throughout its duration.

Sanctions screening as a core obligation

Sanctions screening is a critical component of CDD. All parties must be checked against global sanctions and watchlists including the OFAC SDN, EU Consolidated, UN Security Council, and UK Sanctions List. Failure to screen constitutes a regulatory breach regardless of whether an actual sanctioned party is subsequently engaged.

Risk-based approach in practice

The FATF's guidance on the risk-based approach requires firms to assess the money laundering and terrorist financing risks relevant to their specific business and apply proportionate controls. A study in the European Journal on Criminal Policy and Research found that smaller regulated entities often struggle with the practical application of risk-based approaches due to resource constraints and lack of specialised compliance expertise.

Practical application by sector

  • Legal professionals: Must screen clients and counterparties when acting in financial transactions, trust formation, or company administration
  • Real estate agents: Required to screen buyers and sellers for transactions above the applicable threshold
  • Accountants: Must screen when preparing or carrying out transactions involving tax advice, asset management, or company formation
  • Letting agents: Required to conduct CDD on landlords and tenants in monthly rent transactions above €10,000

Record-keeping and audit trail requirements

The UK Money Laundering Regulations 2017 require firms to retain CDD records for at least five years after the end of the business relationship. The EU framework extends this to include detailed records of all screening checks performed, the results obtained, and the rationale for decisions made on potential matches.

Automated screening platforms like FirmScreen address this requirement by maintaining append-only audit trails that log every screening event, match decision, and compliance action - providing a defensible record during regulatory inspections.

Enforcement trends and consequences

Regulators are increasing their enforcement focus on non-financial institutions. The UK's OFSI and professional supervisory bodies such as the Solicitors Regulation Authority and HMRC have both increased inspection frequency and enforcement activity. Penalties range from monetary fines to revocation of practising licences.

For a detailed analysis of enforcement trends, see our article on the cost of AML non-compliance.

Conclusion: preparing your firm

The convergence of new EU legislation, strengthened supervisory powers, and increased enforcement means that non-financial institutions can no longer treat AML compliance as an afterthought. Firms should review their risk assessments, ensure sanctions screening covers all major lists, implement ongoing monitoring, and maintain comprehensive audit trails. Technology solutions designed for non-financial institution workflows - with proportionate pricing and user-friendly interfaces - are essential for meeting these obligations without overwhelming limited compliance resources.