Regulatory regime

Money laundering is the process through which proceeds of crime, and their true origin and ownership, are changed so they appear legitimate.

The UK anti-money laundering (AML), counter-terrorist financing (CTF) and counter-proliferation financing regime is principally found in the Proceeds of Crime Act 2002 (POCA 2002), the Terrorism Act 2000 (TA 2000) and the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (MLR 2017), SI 2017/692, as amended. These contain criminal offences and regulatory requirements designed to prevent, detect and disrupt financial crime. Failure to comply can carry serious criminal, administrative and professional consequences.

Legal professionals may be subject to different requirements depending on the nature of their work and whether they are carrying out activities within the regulated sector. The legislative framework operates alongside international standards and legal sector guidance, including standards developed by the Financial Action Task Force (FATF) and guidance issued by the Legal Sector Affinity Group (LSAG).

This subtopic provides an overview of the UK AML, CTF and counter-proliferation financing regime as it applies to law firms. It explains