Amendments to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017

The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the 2017 Regulations) set out the United Kingdoms framework for preventing the abuse of the financial system. Since their introduction, a series of statutory amendments have refined and expanded the regime to address emerging risks, align with EU/UK directives and incorporate bestpractice guidance. This page provides a concise overview of the most significant amendments, the rationale behind them, and the practical impact on regulated entities.

1. Overview of the Original 2017 Regulations

The 2017 Regulations implemented the Fourth EU AntiMoney Laundering Directive (4AMLD) and introduced key obligations, including:

• Customer duediligence (CDD) and enhanced duediligence (EDD) requirements.
• Recordkeeping of payer information for transfers of 1,000 or more.
• Riskbased approach to AML/CTF compliance.
• Designation of regulated persons covering banks, insurers, accountants, and highvalue dealers.

2. Principal Amendments Since 2017

2.1. The Money Laundering and Terrorist Financing (Amendment) Regulations 2019

Introduced in response to the Fifth EU AML Directive (5AMLD), the 2019 amendment added:

• Beneficialowner transparency: Expanded the scope of the central register to include individuals with a 25%plus interest in a corporate entity.
• Politically Exposed Persons (PEPs): New riskbased criteria for identifying family members and close associates of PEPs.
• Virtual asset service providers (VASPs): Brought cryptocurrency exchanges and wallet providers within the regulated sphere.

2.2. The Money Laundering and Terrorist Financing (Amendment) Regulations 2020

This amendment focused on strengthening the informationonthepayer rules and harmonising them with the EUs Travel Rule. Key changes include:

• Lowered the threshold for payer information from 1,000 to 1,000 for transfers made to or from the UK.
• Mandated electronic transmission of payer data between institutions, reducing reliance on paper copies.
• Introduced a highrisk country list that triggers automatic EDD for transfers originating from or destined for listed jurisdictions.

2.3. The Money Laundering and Terrorist Financing (Amendment) (EU Exit) Regulations 2021

Following Brexit, the UK needed to retain the AML framework while allowing divergence where appropriate. The 2021 amendment:

• Reenacted many EUderived provisions into domestic law, ensuring continuity.
• Provided the Treasury the power to amend the highrisk thirdcountry list without EU approval.
• Allowed for temporary exemptions in cases where compliance would be technically impossible, subject to FCA approval.

2.4. The Money Laundering and Terrorist Financing (Amendment) Regulations 2022 The Sixth Directive Adjustments

With the adoption of the Sixth EU AML Directive (6AMLD), the 2022 amendment introduced:

• Criminal liability for corporate officers who fail to implement adequate AML controls.
• Extended the definition of money laundering to include the facilitation of illegal financial flows through the use of anonymous payment methods.
• New reporting deadlines suspicious activity reports (SARs) must now be filed within 30 days of detection.

2.5. The Money Laundering and Terrorist Financing (Amendment) Regulations 2024 RealTime Payments & Digital Identity

The most recent amendment reflects rapid innovation in payment technology. Highlights:

• Obligation for firms to verify the identity of payers in realtime for instantpayment schemes (e.g., Faster Payments, Open Banking).
• Recognition of digital identity verification methods, including eIDAScompatible solutions.
• Mandatory riskassessment of derisking practices to ensure they do not inadvertently facilitate illicit activity.

3. Why the Amendments Matter

Each amendment represents a calibrated response to the evolving threat landscape:

• Emerging technologies: Cryptoassets and instant payments create new vectors for laundering; regulation must keep pace.
• International cooperation: Aligning with EU directives eases crossborder information sharing, crucial for tracking transnational crimes.
• Accountability: Extending personal liability to senior management reinforces a culture of compliance.
• Risk management: More granular riskbased requirements help firms focus resources where they are needed most.

4. Practical Implications for Regulated Entities

4.1. Updated Customer Due Diligence

Firms must now incorporate beneficialowner checks for every corporate client, apply enhanced scrutiny to any connection with PEPs, and retain records of electronic payer data for at least five years.

4.2. Technology and Systems

Legacy AML systems often lack the capacity for realtime verification. Companies should consider:

• Integrating APIbased identity verification services.
• Deploying transaction monitoring tools that can flag transfers crossing the 1,000 threshold instantly.
• Maintaining an uptodate highrisk country list within their riskengine.

4.3. Governance and Training

The 2022 amendments officerliability provisions mean senior executives must:

• Ensure AML policies are approved at board level.
• Receive regular, documented training on new obligations.
• Monitor compliance metrics and report failures promptly.

4.4. Reporting Obligations

Suspicious activity reports now have a strict 30day filing window, and the data required for Travel Rule compliance must be transmitted in a structured, electronic format (e.g., ISO 20022).

5. Looking Ahead

Future legislation is likely to focus on:

• Further integration of artificial intelligence for transaction monitoring.
• Expanded coverage of greenwashing schemes used to disguise illicit financing of environmental projects.
• Coordination with nonEU jurisdictions to create a truly global AML dataexchange network.

For organisations, staying compliant will require continual investment in technology, staff expertise, and governance frameworks that can adapt to rapid regulatory change.

6. Useful Resources

• FCA Guidance on Money Laundering
• UK Government Money Laundering Collections
• EU Sixth AML Directive Overview
• RealTime Payments AML Considerations