UK: New Anti-Laundering Regulations Now In Force In The UK

Last Updated: 15 August 2017
Article by Martyn Dumble

The UK's previous Anti-Money Laundering (AML) legislation, The Money Laundering Regulations 2007 (the 2007 Regulations), was repealed on 26th June 2017 and replaced by The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the 2017 Regulations). This new legislation implements the proposals contained within the EU's 4th Money Laundering Directive, which was published on the 25th June 2015.

The 2017 Regulations build upon the risk-based approach advocated by the 2007 Regulations and make some key changes, aimed at making the UK a more hostile place for money launderers and terrorist financers.

Some of the key changes introduced by the 2017 Regulations are summarised below:

  • Company Formations: Under the 2007 Regulations, the forming of a UK company was widely construed as an occasional transaction. Unless the company also required additional on-going support services, such as a registered office address or company secretarial services, there was not a mandatory requirement to conduct due diligence on everyone wishing to form a UK company. The 2017 Regulations now classify a one-off company formation as a business relationship, giving rise to due diligence requirements.
  • PEPs (Politically Exposed Persons): Previously, only foreign PEPs were considered to represent an increased risk of money laundering, thus triggering the need to undertake Enhanced Due Diligence when doing business with them, their immediate family or their close associates. The 2017 Regulations have widened the PEP definition so it now includes domestic UK PEPs, their immediate family & close associates. However, there is also recognition that not all PEPs present the same level of risk, and so the 2017 Regulations include the provision to apply a risk-based approach to PEPs, differentiating between low and high-risk PEPs, their family members and close associates. The Financial Conduct Authority have been tasked with publishing guidance on how you may differentiate PEP risk, considering factors such as the political stability of the PEPs country of origin.
  • Simplified due diligence: To come more in line with the risk-based approach, the UK Government will provide a non-exhaustive list of factors where simplified due diligence may be appropriate. Compliance practitioners will now need to consider each case on its merits and document their rationale for instances where they feel simplified due diligence is appropriate.
  • Widening the definition of beneficial ownership: Whilst the 2017 Regulations stop short of lowering the beneficial ownership threshold from >25% to >10% shareholders, the definition of beneficial ownership has been extended to include those persons with significant control of a company (PSCs).
  • Central Register of Trusts: To bring trusts in line with the level of beneficial ownership transparency now expected of UK companies, HMRC are to launch a central register of beneficial owners of express trusts with tax consequences during 2017. This will mandate trustees to provide HMRC with details of a relevant trust's Settlor, Trustees, Beneficiaries and all other natural or legal persons with control over the trust. However, unlike the beneficial ownership register of UK companies, this will not currently be made public.
  • PSC changes: In order that the UK's central register of beneficial owners provides "adequate, accurate and current information", changes to a UK company's PSC register will now need to be filed within 28 days of the change, rather than just annually when filing their confirmation statement.
  • Independent Audit Function: Having regard to the size and nature of a business, there is now a requirement to appoint a member of the board as an officer for compliance with the 2017 Regulations and establish an independent audit function to evaluate the effectiveness of the company's AML policies/procedures.
  • Risk Assessment: The Treasury, The Home Office, Supervisory Bodies & businesses supervised for compliance with the 2017 Regulations must each produce a risk assessment based on the money laundering & terrorist financing risks the UK, entities the supervisory body supervises and supervised companies face. The Treasury & The Home Office will share their findings with the supervisory bodies who will, in turn, share these with the bodies they supervise. Some of the factors companies will need to consider when producing their risk assessment are the services they provide, the delivery channels used and the location of their clients.

Whilst some have criticised the UK Government for "gold plating" the EU's 4th Money Laundering Directive, when transposing its recommendations into UK law, most of the changes shouldn't be too onerous for the majority of firms to comply with. However, unlike the 2007 Regulations, which were in place for over 10 years, the EU are currently working on their 5th Money Laundering Directive. The 2017 Regulations may therefore just be the start of an ever more stringent AML regime that will ensure that the UK, and our European neighbours, are leading the global fight against money laundering and terrorist financing which, given the current global threat level, must surely be viewed as a positive.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.