Who's liable? A breakdown of personal liability under AML regimes

Breaking down the jargon on AML/CTF personal liability

If you’re a director, senior manager or Money Laundering Reporting Officer (MLRO) in the United Kingdom, meeting AML requirements isn’t just your business’ obligations - you could be personally liable too, especially if you’re a sole practitioner. But there’s no need to panic. We’ve stripped back the jargon and broken down who could be personally liable and how to stay compliant with confidence in simple steps below.

Who’s liable?

Company directors, Senior managers, MLROs and, in some cases, employees or agents involved in AML duties could all be personally liable for violations. If you’re a sole practitioner, you may be conducting several of these duties yourself, or outsourcing tasks to a third party – regardless, the buck stops with you, so it’s important to know your obligations.

We’ve broken down the responsibilities for you below.

Directors of companies, including partners in partnerships, have the ultimate responsibility for ensuring their business complies with the UK Money Laundering Regulations 2017. They can be held personally liable for breaches, especially if they are involved in, consented to, or turned a blind eye to non-compliance.

Directors should:

• Ensure the business has a robust Anti-Money Laundering (AML) programme, risk assessment and internal controls in place - and that it’s adhered to by all relevant staff.
• Ensure regular reviews are conducted including submitting Suspicious Activity Reports (SARs) and maintaining appropriate records for audits.
• Appoint a competent MLRO and ensure relevant staff are properly trained and vetted.

Senior Managers - including CEOs, CFOs, senior leadership, partners, and anyone with significant influence over the management or administration of the business - also carry personal liability. According to the Senior Managers Regime the most senior people in a firm who perform key roles need FCA or PRA approval before starting their roles and should be assessed for fitness and propriety at least annually.

The Money Laundering Regulations and guidance from HMRC and the Joint Money Laundering Steering Group (JMLSG) make it clear that senior managers must:

• Oversee the implementation and effectiveness of the business’ AML programme.
• Ensure relevant staff (including themselves) receive appropriate AML training.
• Support the MLRO and ensure they have sufficient authority and resources.

Nominated officers - often referred to as Money Laundering Reporting Officers (MLROs) - must be appointed by every regulated business. This person is responsible for receiving internal reports of suspicious activity and deciding whether to report them to the National Crime Agency (NCA).

MLRO’s duties include:

• Overseeing day-to-day compliance with the business’ AML programme and risk assessment.
• Ensuring policies, procedures, and controls are up to date and effective.
• Reviewing and submitting suspicious activities to the National Crime Agency (NCA) and maintaining a clear audit trail.
• Preparing internal reports, and facilitating independent reviews and audits at least every two years.

While the main focus is on directors, senior managers, and MLROs, employees and agents can also be personally liable in certain situations. For example:

• If they knowingly participate in money laundering or terrorist financing.
• If they wilfully fail to comply with AML obligations (e.g., deliberately not conducting customer due diligence (CDD) checks, or helping to conceal suspicious transactions).
• If they provide false or misleading information to supervisors or the NCA.

What are the penalties?

In the UK, individuals who fail to meet AML compliance can face fines, bans and even imprisonment depending on their role and the severity of the breach.

• The Financial Conduct Authority (FCA) or the Prudential Regulation Authority (PRA) can impose administrative penalty fines on business owners and directors for breaches of AML requirements. These fines can vary depending on severity but can be substantial. Directors and owners could also be disqualified from serving as director and/or carrying out certain regulatory activities if they fail to meet their AML/CTF obligations.
• Employees, Senior managers and Compliance Officers (MLROs) directly responsible for AML compliance failures may also face disciplinary sanctions, fines or bans from working in regulated management roles.
• Criminal liability can apply to any individual involved if serious negligence or complicity can be proven, and penalties can include unlimited fines and up to 14 years’ imprisonment.

Financial penalties and prohibition from holding senior management functions are common penalties for procedural failures, while criminal penalties would be more likely to apply to serious cases where an individual has knowingly ignored or assisted with money laundering or terrorism financing offences.

How to protect yourself from personal liability

You don’t need to be an AML expert. But you do need simple systems that take care of the essentials. Here are the must-haves:

• A clear AML programme: Aligned to the UK Money Laundering Regulations 2017 and relevant HMRC, FCA, or professional body guidance — and kept up to date.
• Reliable CDD, EDD, and risk assessment processes: for every client, every time.
• Proper reporting of suspicious activity: Suspicious Activity Reports (SARs) submitted to the NCA promptly, with controls in place to prevent tipping off.
• Secure record-keeping: stored for at least 5 years and audit-ready.
• Clear MLRO oversight: A competent Money Laundering Reporting Officer (MLRO) with sufficient authority, resources, and training.

APLYiD handles your AML compliance from start to finish — ID verification, CDD, risk assessment, and record keeping — with no admin headaches and no training needed.

Let APLYiD take the pressure off

At APLYiD, we help you get compliant and stay that way — without the headaches.

• No training needed. Everything’s automated and guided.
• No unnecessary complexity. Just one self-serve platform for all AML tasks.
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• No gaps in compliance. Our platform keeps you covered, even when regulations change.

Whether you're running a solo practice or managing a small team, APLYiD helps take the guesswork out of compliance so you can focus on what you do best.