New UK Money Laundering Rules Take Effect on 30 June

The UK’s amended Money Laundering and Terrorist Financing (Amendment) Regulations 2026 will take effect on 30 June, introduced through Statutory Instrument 2026/621. The reforms ease several enhanced due diligence (EDD) obligations on regulated firms, recalibrating where the strictest checks apply rather than lowering the overall compliance standard.

The headline change narrows the trigger for EDD on higher-risk transactions. Under the existing framework, firms were required to apply enhanced checks to every transaction classed as “complex.” The amended rules limit that obligation to arrangements deemed “unusually complex,” following evidence that the broader standard encouraged overly risk-averse behaviour in sectors where complexity is routine. The remaining triggers stay in place, with EDD still mandatory for transactions that are unusually large or that lack any apparent economic or legal purpose.

A second significant amendment reshapes how firms treat cross-border activity. Previously, regulation 33(1)(b) required automatic EDD whenever a counterparty was established in a jurisdiction on the Financial Action Task Force (FATF) grey list of countries under increased monitoring. Regulators concluded that the rule cast too wide a net and failed to concentrate scrutiny on the jurisdictions posing the greatest risk to the UK, an approach few comparable economies had adopted. Under the new regulations, automatic EDD is now triggered only where a counterparty is based in a country on FATF’s Call for Action list, currently North Korea, Iran, and Myanmar.

HM Treasury guidance is clear that the relaxed thresholds do not remove wider risk obligations. Firms must still apply EDD and enhanced ongoing monitoring wherever they identify a high risk of money laundering or terrorist financing in a third country, even one absent from the Call for Action list, taking FATF mutual evaluations into account as a geographical risk factor. Separate amendments extend Trust Registration Service requirements to non-UK trusts holding UK land or property acquired before 6 October 2020, alongside a de minimis exemption for certain low-value, low-risk trusts.

By shifting weight from fixed lists toward firms’ own risk assessments, the reforms make the quality of underlying customer and counterparty data more important, not less. Accurate identification of beneficial ownership, jurisdiction, and sanctions exposure now underpins every defensible risk-based decision. Shufti’s AML screening platform screens against 3,500-plus global watchlists and 215-plus sanctions regimes in real time, with continuous monitoring across the customer lifecycle, giving compliance teams the data foundation to direct enhanced checks precisely where the regulations now require them.

Adapt your AML program with confidence. Request a demo to see how our KYC and AML screening solutions support risk-based compliance under the UK’s updated framework.