The government has published its response to the consultation into the UK’s Money Laundering Regulations (MLRs), setting out various proposed changes to improve the country’s anti-money laundering (AML) regime.
In its document: Improving the Effectiveness of the Money Laundering Regulations – Consultation Response (17 July 2025), the Treasury says that it intends to make changes for regulated firms who fall under the MLRs in a slew of areas in a bid to make the MLRs “more effective”.
“The changes we are taking forward will strengthen our regime by closing loopholes in the existing regulations, addressing new and emerging threats, and clarifying requirements so that they are more targeted and effective,” said Emma Reynolds, Economic Secretary to the Treasury and City Minister in the government’s foreword to the response.
The consultation into the effectiveness of the MLRs opened in March 2024 and covered four main themes:
- Making customer due diligence more proportionate and effective.
- Strengthening system coordination on economic crime.
- Providing clarity on scope of the MLRs.
- Reforming registration requirements for the Trust Registration Service.
As a result of the responses (224 stakeholders across all regulated sectors), the government plans to implement reform in the following areas:
- Enhanced due diligence (EDD) on complex transactions.
- Enhanced due diligence on high-risk third countries.
- Due diligence on pooled client accounts.
- Due diligence triggers for certain non-financial firms.
- Onboarding of customers in bank insolvency scenarios.
- Information sharing between supervisors and other public bodies.
- Supervisor cooperation with Companies House.
- Currency thresholds currently in euros.
- Regulation of sale of ‘off-the-shelf’ companies by Trust and Company Service Providers (TCSPs).
- Registration and change in control for cryptoasset service providers.
- Registration requirements for the Trust Registration Service (TRS).
These reforms will necessitate some key changes to the MLRs, including:
- HM Treasury and the Department for Science, Innovation and Technology (DSIT) will jointly produce guidance on using digital identities for MLRs identity verification checks.
- HM Treasury will amend the MLRs to provide for relevant carve-outs from customer due diligence (CDD) requirements to assist the customers of an insolvent bank to access new accounts rapidly and transact from them.
- The Treasury will amend the MLRs to clarify that EDD is required on “unusually complex” transactions, instead of all complex transactions.
- References to EUR in the MLRs will be changed to GBP to reduce the administrative burden.
- The government will expand the scope of registration on the TRS to include all non-UK trusts that hold an interest in UK land and property acquired before 6 October 2020.
For the government’s full response into the consultation on MLRs, click here.
The government intends to publish a draft statutory instrument in the coming months for technical feedback, before laying new legislation in parliament later this year if parliamentary time allows.
Alongside the consultation, the Treasury also ran a survey on the cost of compliance with the MLRs for regulated businesses, to which it received 136 responses.
This will help the government understand better how regulated businesses comply with the regulations in practice and to assess the impact of future changes to the MLRs.
Compliance Services for Businesses London
At the Regulation & Compliance Office (RACO), we help accountants, solicitors, estate agents and other regulated businesses undertake a review of their policies, controls, and procedures to ensure that they are compliant with AML regulations and, therefore, avoid any breaches.
A review of this nature provides valuable insight into a business when performed correctly. Along with an overview of risk, these crucial assessments also highlight issues within the business, so it is essential to undertake a proper review. All of a company’s building blocks must be considered, including its staff, clients, operations, and finances.
By working with RACO, a business can be assured that we will bring the required level of knowledge and expertise needed to perform the review, which adds value to the business and is not simply a box-ticking exercise. Our team can also provide a full range of services that include:
- Consultancy.
- Compliance Policies.
- Training.
- Handbooks.
- Auditing.
Our services focus on businesses’ anti-money laundering and regulatory requirements through the implementation of effective policies, procedures, training, and consultancy. We also provide continued monitoring of staff and ongoing training to ensure that everyone within a business is aware of the latest requirements and complies with their responsibilities.
We offer a full range of services focused on ensuring businesses across all regulated sectors create, maintain and evidence their compliance with the requirements of their regulators and legislation. We work with businesses of all sizes, from the smaller high street or niche businesses to the large multi-office and multinationals.
Get In Touch
We adopt a sensible and pragmatic approach to fees, ensuring we are competitive and always add value. As necessary, we will agree on packaged services to control cost and enable clients to spread payments to alleviate cash flow, yet ensure services are provided when needed.
If you want to discuss our services in more detail, contact us at 0203 985 8550, email us at info@regulationandcomplianceoffice.co.uk or complete an enquiry form.
