The European Union has made some fundamental changes to how anti-money laundering compliance works across its Member States. The EU Anti-Money Laundering Regulation (AMLR27) comes into force in July 2027 and is set to be one of the most significant regulatory updates we have seen in recent times. AMLR 27 replaces decades of directive-based rules with a single, directly applicable legal framework.
A new authority, AMLA, is already up and running in Frankfurt, with direct supervisory powers and the ability to set binding standards across member states. Regulation (EU) 2024/1624, known as AMLR 27, replaces the directly applicable provisions within the 4th and 5th AML Directives. It is supported by the 6th Anti-Money Laundering Directive (AMLD6) that regulates the areas to be implemented at the national level, such as Financial Intelligence Unit (FIU) cooperation and supervisory authorities. Key aspects of the update will affect who must comply, how customer due diligence is conducted, and what regulators will demand as evidence.
It is true that, as the UK has left the EU and is no longer subject to EU laws, AMLR 27 will not apply here. However, regulated businesses and their compliance officers should pay close attention to these developments, as the UK has a consistent history of tracking international AML standards. AMLR 27 is one that UK regulators are likely to watch closely, and with the FCA expected to take over as the UK’s overarching AML supervisor, the timing could not be more significant.
Regulated businesses that treat this as an early warning, rather than an irrelevant foreign policy update, will be in a much stronger position when and if domestic requirements shift.
What AMLR 27 Will Change in the EU
Before considering potential UK implications, it is worth understanding what AMLR 27 will actually be introducing. was able to translate requirements into national laws, thereby introducing variations in how rules were interpreted and enforced. AMLR 27 ends that flexibility. From 10 July 2027, the same requirements apply in Frankfurt, Warsaw, and Lisbon without any national filter. The new authority, the Anti-Money Laundering Authority (AMLA), is already operational in Frankfurt and has direct supervisory responsibility over the highest-risk cross-border entities, with the ability to issue binding standards and conduct cross-border investigations. Every obliged entity, including banks, payment firms, crypto-asset service providers, luxury goods traders, real estate businesses, accountancy businesses, and others, will be required to operate under the same standards regardless of the Member state in which they operate.
Key changes include a lowered Client Due Diligence (CDD) threshold for occasional transactions from EUR 15,000 to EUR 10,000, with separate limited CDD obligations for cash transactions from EUR 3,000. There is also a new EU-wide cash payment cap of EUR 10,000 for commercial transactions, a strict five-working-day deadline for responding to requests from financial intelligence units, and a strengthened approach to enhanced due diligence for politically exposed persons.
While this does not apply directly to regulated businesses in the UK now, the question is whether it will.
The Beneficial Ownership Threshold: A Single Word Could Change Your Compliance Obligations
A change that arguably deserves the most attention from UK-based regulated businesses is the standardised beneficial ownership threshold.
AMLR 27 sets the threshold at 25%, meaning that any individual holding 25% or more in ownership, voting rights, or other controlling interests must be identified and verified as a beneficial owner. Under the UK’s current framework, the test is more than 25%. That one word “or” may not seem like much, but it is doing considerable work in the EU Version, and it is worth understanding exactly what that means in practice.
Take a company with four equal shareholders, each holding exactly 25%. Under the current UK standard, none of those individuals meets the threshold, because none of them holds more than 25%. Under the EU’s revised standard, all four will now qualify as registrable persons with significant control and would require full UBO verification.
In practice, a change that sounds like a minor technical adjustment, moving from “more than 25%” to “25% or more”, can take a client’s or counterparty’s registrable beneficial owners count from three to four, or from none to four where ownership is split equally.
If the UK were to align its AML regulations with this approach, and the logic for doing so is consistent with the direction of international AML standards, this would affect how relationships are documented, how client due diligence is conducted, and how risk assessments are structured. Regulated businesses would also need to revisit their existing client and counterparty records and reassess their risk profiles against the new threshold. In many cases, this would mean re-examining client relationships that they have previously considered fully documented and compliant. Regardless of the size of a business, these changes would not be a trivial exercise and would require time and planning to do properly.
Why This is Relevant to UK Businesses
The FCA’s anticipated assumption of AML supervisory responsibility for all regulated businesses in the UK is not simply a change in regulator. The FCA operates with an approach shaped by financial services regulation, emphasising data-driven, risk-based oversight that is likely to involve greater levels of proactive disclosure and operational transparency. A regulator with the FCA’s resources, enforcement appetite, and alignment with international AML standards, including the Financial Action Task Force recommendations, is considerably more likely to look at what leading international frameworks are doing and expect UK businesses to operate to a comparable standard. AMLR 27 represents exactly that kind of international benchmark, and the FCA will be well aware of it.
There is also a practical dimension. Businesses that operate across borders, work with EU-based clients or counterparties, or are part of group structures with EU operations will increasingly encounter AMLR 27 requirements through their relationships, even if they are not directly subject to the regulation. Understanding what those requirements are and how they differ from current UK obligations is part of managing compliance risk across commercial operations.
What Regulated Businesses Should Be Doing Now
Waiting for formal UK regulatory changes, including focusing efforts on anticipating which changes the FCA will enforce, may seem like the right approach, but by the time new rules are in force, the window for considered, systematic improvement has often closed.
Instead, regulated businesses should treat this as an opportunity to revisit the robustness of their current AML frameworks against where regulation is clearly heading. That means reviewing beneficial ownership identification procedures to understand how a threshold change would affect the current client base, assessing whether CDD policies are genuinely risk-based or considering whether their current frameworks would withstand scrutiny from a regulator with heightened expectations. Businesses must also ensure that their firm-wide risk assessment is current and proportionate, and confirm that the current MLRO has the authority, resource, and training to respond to a more demanding supervisory environment.
How the Regulation and Compliance Office Supports Regulated Businesses
AML compliance isn’t just about avoiding enforcement. It’s about protecting your business, your team, and your reputation.
If you need help strengthening AML controls, updating documentation, or preparing for HMRC supervision, the Regulation and Compliance Office (RACO) can provide practical, proportionate advice and support. All firms must demonstrate and uphold high standards in their AML systems and processes, as well as in their management and supervision. This also involves outlining how the business operates, including staff conduct in accordance with established policies, controls, and procedures.
We can support your regulated business with:
Review AML policies and procedures to ensure they align with your regulator’s expectations, especially around risk assessments and customer due diligence.
Train your team to ensure staff understand their obligations, including suspicious activity and reporting.
Provide outsourced compliance services, including:
- Outsourced Due Diligence & Risk Assessment: We carry out the due diligence work and prepare risk assessments, so your internal team can focus on review and oversight.
- Anti Money Laundering (AML) Compliance Service: This support service has been designed to provide AML regulated businesses with an effective solution for the management and control of compliance with the Anti Money Laundering Regulations. Our service is an annual subscription that provides Businesses with ongoing support from our compliance team and ensures your Business has in place appropriate and compliant Policies, Controls, and Procedures (PCP’s) that are maintained by us.
- Risk, Anti Money Laundering Guidance and Register Administration Servicehas been designed to provide Businesses and their Money Laundering Reporting Officer (MLRO) with a support function that ensures their regulatory and compliance obligations are fulfilled on an ongoing basis, and staff are provided access to ongoing advice as needed.
- Regulation 21 Independent Audit. Our service provides businesses with a completely independent audit and ensures the review is completed and reported on in accordance with the regulatory requirements.
- AML Training. Training staff on the Anti Money Laundering Regulations is a legal requirement. Your staff should understand (and be able to evidence understanding) how the AML rules and the processes the business has implemented to minimise the risk of money laundering.
Our compliance specialists provide practical, sector-specific guidance that enables regulated businesses to meet their obligations without hindering business operations. We work with businesses of all sizes and across all regulated sectors, tailoring our approach to each business’s working methods and risk profile.
Talk to our Compliance Experts
RACO works with businesses to create the necessary documentation and put the processes in place to ensure the business and its staff are thoroughly protected.
To enquire about our services and how we can service your business, call us on 0203 985 8550 or email us at info@regulationandcomplianceoffice.co.uk
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