Company formation service providers are regulated entities under the UK’s Money Laundering, Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017. The Regulations set out the high-level requirements on regulated firms to combat money laundering and ensure that key professionals identify their customers, understand the purpose behind transactions including the source of funds and have policies, controls and procedures in place to mitigate against the risks of money laundering and terrorism financing they face.
As a regulated entity under the Regulations, company formation service providers must be registered with an anti-money laundering supervisor. Anti-money laundering supervisors must effectively monitor the compliance of regulated entities they supervise. In December 2018, the Financial Action Task Force, the global standard-setter for anti-money laundering and counter terrorism financing (AML/CTF), published its Mutual Evaluation Report of the United Kingdom. It recognised that the UK’s AML/CTF regime is the strongest of over sixty countries assessed by FATF and its regional bodies to date.