Rules on AML are tightened and relaxed - but what do the new regulations mean for barristers & chambers?
The Money Laundering and Terrorist Financing (Amendment) Regulations 2026 (SI 2026/621) came into force on 30 June 2026, introducing the most significant revision to the UK's anti-money laundering framework in several years. The Regulations make targeted amendments to the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017, covering customer due diligence, enhanced due diligence, pooled client account requirements, and the supervision of cryptoasset activity. For barristers and chambers doing AML-regulated work, the changes cut in two directions - some obligations are relaxed, others are tightened, and the overall expectation of documented, risk-based reasoning has been raised.
The Enhanced Due Diligence Threshold Has Changed
The most operationally significant reform concerns the trigger for enhanced due diligence (EDD). The EDD requirement has been narrowed from mandatory application to all "complex" transactions to "unusually complex" arrangements. This change was made because evidence suggested the existing rule encouraged overly risk-averse behaviour, particularly in sectors where most transactions could be considered complex. Transactions that are unusually large or that have no apparent economic or legal purpose still require enhanced measures.
Amending the wording from "complex or unusually large" to "unusually complex or unusually large in each case given the nature of the transaction" introduces a proportionality assessment that was previously absent from the regulations. Barristers and chambers should update their AML policies and risk assessment templates to reflect the revised language, and record their reasoning when concluding that a transaction does not meet the "unusually complex" threshold. Those involved in matters with a property, company, trust, or international dimension should ensure that the matters receive appropriate review and documented reasoning.
High-Risk Third Countries: A Narrower Automatic Trigger
A second significant change concerns overseas jurisdictions. Previously, automatic EDD was required where the other party was established in a country on the Financial Action Task Force (FATF) grey list. Under the new regulations, automatic EDD is required only where the other party is based in a country on FATF's Call for Action list - currently North Korea, Iran and Myanmar.
This is not a licence to treat all other higher-risk jurisdictions as low-risk by default. HM Treasury's updated guidance confirms that EDD and enhanced ongoing monitoring must still be applied in any high-risk third country where a high risk of money laundering or terrorist financing is identified, even if the country is not on the Call for Action list. Relevant personnel must continue to take FATF mutual evaluations into account as a relevant risk factor.
Pooled Client Accounts
Where a pooled account is provided to a customer, additional customer due diligence measures are now required to understand the purpose of the account and to assess, manage and mitigate the level of money laundering and terrorist financing risk. Customers are required to maintain written records and provide information on request. This is a tightening rather than an easing, and chambers operating pooled client arrangements under public or licensed access will need to absorb it into their existing due diligence processes.
Further Changes
Currency thresholds across the Regulations have been updated from euros to sterling - a technical but practically important change that should be reflected in any internally-produced risk assessment documentation or compliance checklists referencing the old figures. Cryptoasset provisions are subject to phased implementation, with enhanced due diligence requirements for specified cryptoasset activities coming into force on 1 February 2027.
What Chambers Should Do Now
The reforms do not change the fundamental nature of the AML obligation on barristers. What has changed is the calibration of several specific triggers and the expectation that regulated personnel can demonstrate, in writing, how they reached their conclusions. Chambers with AML-regulated practitioners should treat the coming into force of SI 2026/621 as a prompt to review and update their firm-wide risk assessment, update any policy documents referencing the old "complex" EDD language or euro-denominated thresholds, review pooled client account arrangements, and ensure compliance leads are briefed ahead of the next round of AML training.