The HM Treasury Anti-Money Laundering and Counter-Terrorist Financing Supervision Report 2024-25 provides a critical assessment of the UK’s financial defenses against illicit finance, detailing the supervisory activities of 25 Anti-Money Laundering/Counter-Terrorist Financing supervisors. This comprehensive document outlines significant structural reforms, particularly the planned transition of oversight for professional services firms to the Financial Conduct Authority. It also captures key metrics for the period, revealing a total AML/CTF expenditure of £57 million across all supervisors, a substantial increase from previous years. Furthermore, the report documents a total of 925 rejected applications for supervision and discusses various enforcement actions taken, including formal and informal fines, to promote compliance. The findings underscore the government’s determination to strengthen the regime and address persistent vulnerabilities across the regulated sectors.
Table of Contents
A New Era for Professional Services Supervision
The UK government has announced decisive reforms to its anti-money laundering and counter-terrorist financing supervisory regime, with the Financial Conduct Authority positioned to become the sole supervisor for professional services firms. This structural change follows a 2022 review that identified continued weaknesses in the previous, fragmented supervision model. The primary objective of establishing the Financial Conduct Authority in this new role is to deliver clearer accountability and greater consistency across the entire system. This move will see the Financial Conduct Authority assume supervisory functions for firms carrying out regulated activities as Legal Service Providers, Accountancy Service Providers, and Trust and Company Service Providers. In practical terms, this means all firms currently overseen by a Professional Body Supervisor, alongside Accountancy Service Providers and Trust and Company Service Providers supervised by His Majesty’s Revenue and Customs, will transition to the Financial Conduct Authority. This important policy implementation is contingent upon the passage of enabling legislation, confirmation of necessary funding arrangements, and the development of a detailed transition plan. The report thanks the Professional Body Supervisors and the Office for Professional Body Anti-Money Laundering Supervision for their efforts, noting that the Office for Professional Body Anti-Money Laundering Supervision’s function will no longer be necessary once the Professional Body Supervisors are relieved of their formal anti-money laundering duties under the Money Laundering Regulations. Until this transition is complete, an effective level of supervision is being maintained, with the government continuing to measure and assess the regime’s effectiveness. This significant consolidation represents a major step toward centralizing and strengthening the nation’s financial crime defenses.
Gatekeeping and the Supervised Population
Effective gatekeeping is recognized as a core function of supervisors, requiring them to ensure that businesses within the scope of the Money Laundering Regulations are properly registered and meet minimum standards necessary to prevent illicit financial flows. This function also involves checking that individuals holding positions of significant influence demonstrate integrity and competence, including confirming they have not been convicted of specified criminal offenses such as fraud, tax evasion, or organized crime. Across all supervisors, the total number of applications for anti-money laundering and counter-terrorist financing supervision received in the 2024-25 reporting period was 12,908. Of these, 925 applications were formally rejected or refused, a figure broadly consistent with the previous reporting period. The total supervised population across all 25 supervisors remained stable at 94,891 businesses. Supervisors are mandated to employ a risk-based approach to oversight, ensuring resources are targeted where they will have the greatest impact on deterring criminal activity. The overall risk distribution across the supervised population in 2024-25 showed that 9% of businesses were categorized as high-risk, 35% as medium-risk, and 56% as low-risk. His Majesty’s Revenue and Customs, one of the largest supervisors, reported receiving 9,524 applications and rejecting 485. His Majesty’s Revenue and Customs categorized 8% of its own population as high-risk, identifying Money Service Businesses, Trust and Company Service Providers, and Art Market Participants as the sectors presenting the highest inherent risks for money laundering. The Financial Conduct Authority, which supervises approximately 16,000 firms, reported receiving 275 applications and rejecting 85.
Enhanced Monitoring and Financial Resources
The government’s commitment to enhancing the evaluation of the anti-money laundering and counter-terrorist financing regime’s effectiveness led to the collection of several new metrics for the 2024-25 reporting period. These additions were designed to align with the Financial Action Task Force’s methodology and included reporting on onsite visits and desk-based reviews, which are now split by the risk categorisation of the supervised business. New data points also cover the percentage of non-compliant businesses found to be non-compliant during their last assessment, and the number of firms that had their risk categorisation escalated from low or medium to high following an assessment. Furthermore, supervisors provided new Suspicious Activity Report statistics, detailing the number of businesses asked to share Suspicious Activity Reports and the number of reports examined for quality. The operational cost to maintain this rigorous framework saw the total expenditure on anti-money laundering and counter-terrorist financing activity across all supervisors rise significantly to £57 million in 2024-25, compared to £46 million in the preceding year. This investment supports a total of 693 full-time equivalent staff dedicated to anti-money laundering and counter-terrorist financing activities. Collectively, desk-based reviews and onsite visits accounted for 8% of the total supervised population, a key indicator of monitoring activity. His Majesty’s Revenue and Customs carried out a total of 451 desk-based reviews and 793 onsite visits, which included 45 intelligence-led interventions targeting Money Service Businesses in specific ‘days of action’.
Strengthening the UK’s Defenses
The UK’s strategy against illicit finance is robust and holistic, supported by the Economic Crime Plan 2023-26 and the recently published Anti-Corruption Strategy. These frameworks aim to prevent criminals from profiting from their illegal wealth, tackle domestic vulnerabilities, and build international resilience. A critical aspect of this defensive posture is the continual improvement of the primary legislation; to this end, the government has set out planned changes to the Money Laundering Regulations to clarify requirements, close existing loopholes, and ensure customer due diligence is more risk-based and targeted. These legislative updates include strengthening mechanisms for information sharing and cooperation between supervisors and other bodies like Companies House. Looking ahead, the UK is actively preparing for the Financial Action Task Force’s fifth round of assessments, which will culminate in the Mutual Evaluation Report scheduled for publication in 2028. This upcoming evaluation will employ a revised methodology that places a greater emphasis on assessing the effectiveness of the supervision regimes, rather than just technical compliance. Consequently, supervision effectiveness in the financial and non-financial sectors will be evaluated separately, providing clearer and more targeted recommendations for improvement. This proactive preparation, alongside the regular publication of the National Risk Assessment of Money Laundering and Terrorist Financing, such as the latest one released in July 2025, ensures the UK remains responsive to evolving threats and maintains its standing as a trusted global hub for investment.
Key Points
- The UK’s anti-money laundering supervisory regime is undergoing significant structural reform, transferring oversight of legal and accountancy firms.
- The Financial Conduct Authority is set to become the single supervisor for professional services firms to achieve greater consistency and clearer accountability.
- Total anti-money laundering and counter-terrorist financing expenditure by all UK supervisors reached £57 million in the 2024-25 reporting period.
- Out of nearly 13,000 applications for supervision received, 925 were formally rejected, demonstrating strict adherence to gatekeeping functions.
- New monitoring metrics have been implemented to better evaluate the effectiveness of supervision and to prepare for the Financial Action Task Force’s 2028 assessment.
Related Links
- The Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017
- Financial Action Task Force: UK Mutual Evaluation Report 2018
- UK National Risk Assessment of Money Laundering and Terrorist Financing
- Financial Conduct Authority: Financial Crime Guide
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Source: HM Treasury
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