On 14 December 2023, statutory instrument 2023 No. 1371 (SI 2023/1371) – the Money Laundering and Terrorist Financing (Amendment) Regulations 2023 (the SI) – was published, along with an explanatory memorandum.

The SI amends the Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (the MLRs) to clarify the explicit differences between domestic and non-domestic politically exposed persons (PEPs). The SI clarifies in law that, for the purposes of applying the MLRs, domestic PEPs pose a lower risk of money laundering and terrorist financing than non-domestic PEPs and the extent of enhanced due diligence measures applied to those customers by firms regulated under the MLRs should be less, unless other risk factors unrelated to their position as a domestic PEP apply. This provision is already established in guidance.

The SI comes into effect on 10 January 2024.