Anti-money laundering
AMLAlso called AML/CFT, anti-money laundering compliance
Anti-money laundering is the set of laws, regulations and internal controls that stop criminals passing illegal money through the financial system. Regulated firms check who their customers are, monitor transactions, report suspicions to the authorities and keep records. Most rules also cover terrorist financing, so the field is often called AML/CFT.
How it works
A regulated firm builds its AML programme on a written risk assessment. It sets policies for customer due diligence, screens clients against sanctions and PEP lists, and monitors payments for unusual activity. Staff raise internal reports to a nominated officer, usually the MLRO, who decides whether to file a suspicious activity report with the financial intelligence unit.
AML matters because supervisors judge firms on whether their controls work, not only whether they exist. Weak systems lead to fines, restrictions on taking new customers and personal liability for senior managers. Large banks run AML with dedicated teams, transaction monitoring software and case management tools, and the cost is one of the biggest lines in a compliance budget.
The rules
Forty recommendations set the global standard for AML/CFT laws, covering risk assessment, customer due diligence, record keeping and suspicious transaction reporting.
Countries, which apply them to regulated firms through national lawRequires firms to assess risk, apply customer due diligence, monitor relationships and keep records. Amended by SI 2026/621, mostly from 30 June 2026.
Banks, insurers, payment firms, cryptoasset firms and other relevant personsSets a single EU rulebook on customer due diligence, beneficial ownership, internal controls and reporting, replacing most national transposition of earlier directives.
Credit and financial institutions and other obliged entities in the EURequires AML programmes, currency transaction reports, suspicious activity reports and record keeping, enforced by FinCEN and federal banking agencies.
Banks, broker-dealers, money services businesses and other financial institutionsCommon questions
What is the difference between AML and KYC?
KYC is one part of AML. It covers identifying and verifying customers and understanding their risk. AML is the wider framework, which also includes transaction monitoring, sanctions screening, suspicious activity reporting, training and record keeping.
Who has to comply with AML rules?
Banks, building societies, insurers writing life business, investment firms, payment and e-money firms and cryptoasset businesses are covered. So are accountants, lawyers, estate agents, casinos and trust and company service providers in most jurisdictions.
What does AML/CFT mean?
CFT stands for countering the financing of terrorism. Most laws combine the two because the same controls, such as due diligence, monitoring and reporting, are used to detect both laundered funds and money moving to terrorist groups.
Who supervises AML in the UK?
The FCA supervises banks, investment firms, payment firms and cryptoasset businesses. HMRC supervises sectors such as estate agents and money service businesses, and professional bodies supervise accountants and lawyers.
Our coverage
News and analysis on AML from RegTech Post.
Read the coverage →RegTech PostNew EU AML Regulations: What AMLA Means for Compliance DataRead the article →RegTech PostInside the Role of an AML Compliance Officer: Navigating Complex Risks in Financial Crime PreventionRead the article →
