The UK’s anti-money laundering (AML) landscape underwent another wave of significant reform in 2025. With the publication of the latest National Risk Assessment (NRA) and the government’s response to the consultation on the Money Laundering Regulations (MLRs), businesses across all regulated sectors face both new expectations and renewed scrutiny.

The 4rth NRA offers a detailed view of the evolving threats and vulnerabilities within the UK’s financial system, reflecting shifts in criminal methodologies, emerging technologies and geopolitical risks. At the same time, the government’s response to the MLRs consultation sets the course for a more targeted, risk-based and streamlined approach to regulation, aimed at reducing burdens while improving overall effectiveness. This includes proposed amendments to customer due diligence (CDD), the role of supervisors, reliance arrangements and how businesses demonstrate compliance in practice.

For companies subject to AML regulations, this moment presents both compliance challenges and strategic opportunities. It’s a chance to reassess risk exposure, update internal controls, and ensure AML frameworks are not just reactive but resilient. Key themes to watch include:

• A sharper focus on sector-specific risks and proportionate controls 
• Greater expectations for data-driven risk assessments and beneficial ownership verification 
• Revisions to how firms manage outsourcing and reliance relationships 
• Stronger alignment with international standards, such as FATF, and the UK’s broader economic crime plan 

This guide breaks down what the latest NRA and MLR changes mean, helping compliance professionals, law firms and businesses navigate what’s next. Whether you’re in financial services, real estate, law, cryptoassets or other high-risk sectors, understanding these developments is essential for managing exposure and maintaining regulatory compliance going forward.

Where are we now

The 4rth UK NRA of Money Laundering and Terrorist Financing presents a clearer and more detailed picture of the threats facing the UK and it signals a renewed call to action for businesses. Highlights include:

• Money laundering risk remains “high” across nearly all major sectors. 
• Terrorist financing risk is “medium,” consistent with 2020. 
• The UK is a major international financial centre, meaning continued exposure to cross-border laundering threats, including from high-risk jurisdictions and opaque offshore vehicles. 

What does this mean for the UK’s AML state of play and regulated firms? 

1. The UK remains at high risk for money laundering

The UK’s status as a global financial centre, combined with its open economy, continues to make it highly attractive to criminals. The NRA confirms that money laundering threats have intensified due to:

• Geopolitical changes, particularly the global ripple effects of Russia’s invasion of Ukraine 
• Convergence of money laundering, kleptocracy, and sanctions evasion, with sanctioned individuals exploiting professional services and corporate structures 
• Fraud, especially cyber-enabled, is now the most common crime in the UK 
• Continued use of cash, cryptoassets and informal value transfer systems (IVTS) for laundering illicit funds 

2. Legal services remain high risk

The NRA confirms that the legal sector still faces a high risk of money laundering, particularly in areas like:

• Conveyancing 
• Trust and company services 
• Misuse of client accounts 

Despite relatively low non-compliance rates, the reputation of legal professionals continues to be exploited, giving a false veneer of legitimacy to criminal activity. The risks have not materially changed since 2020, reinforcing the need for continuous vigilance.

3. New technologies are a double-edged sword

The adoption of AI, fintech platforms, and cryptoassets has transformed the laundering landscape. Criminals exploit these technologies to move funds faster and more covertly, creating blind spots in AML systems.

At the same time, regulated firms are expected to harness these same tools for stronger detection and risk management, a direction reinforced by new regulatory expectations.

4. Sector-specific vulnerabilities remain stark

Across sectors, the NRA highlights persistent vulnerabilities:

• Cryptoassets are increasingly used in fraud and ransomware schemes with most risk coming from offshore providers. 
• Real estate continues to be a target for illicit finance, with complex structures obscuring beneficial ownership. 
• Cash-intensive businesses remain common vehicles for layering funds, including through Post Office banking services. 

5. Terrorist financing threats remain low-level but varied

TF continues to rely on low-volume funds and a mix of legitimate and illicit means to raise and move money. While not high in financial value, the strategic and reputational risk remains significant.

Ultimately, the latest NRA and MLR reforms signal a shift. The UK expects businesses not only to know the rules but to demonstrate meaningful, risk-led compliance in practice. This is no longer about ticking boxes or relying on legacy processes. Regulators want firms to understand their own vulnerabilities, act on emerging risks, and use data, technology and governance to stay ahead of increasingly sophisticated criminal methodologies. 

For organisations willing to invest in smarter controls and more effective AML frameworks, these changes offer a chance to strengthen resilience and reduce long-term exposure. For those who fall behind, the gap between regulatory expectation and operational reality is likely going to widen.

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