For decades, the US has served as the world’s leading enforcer against financial crime. Trapets executive Joe Biddle examines how recent US policy shifts could dramatically reshape the global anti-money laundering landscape, particularly for UK financial institutions caught between American and European regulatory frameworks. As Washington potentially retreats from aggressive international enforcement, a new EU authority could fill the void.
For many years, the US has been the world’s chief enforcer when it comes to financial crime. Some of the biggest anti-money laundering (AML) busts of the past few years (and on record) have originated from US-led investigations. Take Danske Bank’s $2 billion fine in 2022 or Deutsche Bank’s $186 million penalty in 2023.
But with DOJ enforcement of the FCPA paused amid a broader change in priorities and the Treasury Department announcing a landmark AML law would apply only to foreign companies and individuals, Washington’s position as a central financial crime enforcer could be changing.
It’s still not clear whether the new administration is just making noise, or if these policies mark a more permanent shift in the country’s approach to global financial crime. What is clear is that finserv firms outside the US, including those in the UK, cannot afford to wait and see. They must prepare for multiple eventualities, as well as keeping an eye on things happening closer to its shores.
Stepping back — or ramping up?
Historically, the UK and EU have taken the US lead when it comes to financial crime enforcement. Many high -profile Europe-led money laundering probes might not have been launched if it hadn’t been for Washington’s tough stance. Just look at the Europe-led investigation of Swedbank, which originated from the US-led Danske investigation and led to a whopping $386 million fine for the Swedish lender.
With that in mind, the Trump Administration’s next moves could have dramatic knock-on effects on this side of the pond. I see two potential scenarios playing out:
- Scenario 1: A more isolationist US pulls back from global AML enforcement: If Trump’s protectionist rhetoric translates into full-scale isolationism, we could see the US scale back its AML enforcement, particularly against foreign financial institutions. But if the US becomes less aggressive, will European regulators pick up their momentum, or will they take their cues from the US and also relax their stance? The latter would be a boon for bad actors looking for new regulatory gaps to exploit and could potentially lead to an uptick in financial crime. Global financial hubs like London could be particularly vulnerable.
- Scenario 2: The US goes easier on its own institutions but comes down harder than ever on foreign firms: Another possibility (and one that seems more likely, in my opinion) is that the Trump Administration loosens restrictions for US businesses while doubling down on foreign institutions. After all, the justification for recent AML rollbacks has been to boost the competitiveness of American companies. In this scenario, UK firms could face intensified scrutiny.
So, what we’ve got on our hands are two conflicting possibilities, but UK regulators and financial institutions must be prepared for both. The worst mistake would be to assume that things remain the same and get blindsided by shifting US priorities.
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While US policy remains uncertain, the EU is moving full steam ahead. The launch of the Authority for Anti-Money Laundering and Countering the Financing of Terrorism (AMLA) is slated for 2026, and it will mark the most coordinated European AML effort to date. AMLA is an independent body that will oversee national regulators and directly supervise up to 40 financial institutions that are deemed to be high-risk.
For the UK, which has maintained close involvement despite Brexit, AMLA provides an alternative anchor in the fight against financial crime. The agency’s first years will be critical: A strong EU-led AML regime could soften the impact of US disengagement. However, it also raises the risk of regulatory fragmentation, or even an AML arms race, where we could see the US and EU each imposing harsher penalties on the other’s financial institutions as a show of strength.
One thing I’m certain of is that UK firms will need to brace for tighter compliance demands across the board, whether they’re coming from the US or the newly formed AMLA, which won’t want to be seen to be letting financial crime take place under its nose. Now is the time for financial institutions to ensure their AML controls are robust enough to withstand increased scrutiny from multiple regulatory bodies.
Likewise, UK regulators must ask themselves some tough questions. How will financial criminals potentially exploit these shifts and uncertainties? Where should the UK be on the lookout for new vulnerabilities in its AML framework?
One immediate risk I would flag is that bad actors could increasingly channel illicit funds through US entities, knowing enforcement may be weaker there. If UK financial institutions unknowingly facilitate transactions with these entities, they could find themselves caught in a regulatory crossfire.
Conversely, increased AML scrutiny from both the US and Europe’s AMLA could make UK firms a less attractive target for financial crime. But if the US eventually realizes its lax approach has made its own financial system a haven for money laundering, it may abruptly reverse course, again blindsiding institutions that failed to prepare.
Where do we go from here?
When so much is at stake, the UK’s approach to AML compliance needs to be more robust than just reacting to regulatory changes taking place overseas.
Right now, AML compliance is driven solely by negative reinforcement; that is, firms are penalized for failures but receive no recognition for doing things right. In other industries, like the strict US laws around healthcare data privacy, penalties for noncompliance are coupled with incentives for following the rules. There’s no reason that we can’t follow a similar model in financial crime prevention.
Regulators and the media could work together to highlight institutions that exemplify best practices. The UK should make it as easy and attractive as possible for its firms to do the right thing, rather than waiting for them to do the wrong thing and slapping them with a huge fine and tarnished reputation.
It’s also clear that there’s a great need for a more global and decentralized approach against financial crime. Ultimately, it has never been sustainable for a single country to be the world’s AML enforcer. More often than not, illicit funds are moved between numerous countries and jurisdictions with differing rules and regulations. Therefore, global organizations like Interpol and the Financial Action Task Force (FATF) must take center stage. They have the unique ability to act as a platform to ensure communication and cooperation across borders to help fight financial crime the world over.
With the emergence of AMLA, we may be seeing the beginning of a more balanced system. But perhaps we need to be taking measures now to ensure that Europe doesn’t simply take on the formerly American role of chief enforcer. The global fight against financial crime can’t be concentrated in too few hands: It must be resilient to political shifts in any one country or bloc.
In the meantime, there’s a simple take-home message in all this for UK financial institutions: The only safe strategy is to go above and beyond on compliance. The cost of complacency is simply too high.
Joe Biddle is UK director at tech-first financial crime prevention organization Trapets, founded in 2000 and based in Stockholm, Hanoi and London. He has been involved in financial crime prevention for 25-plus years, having worked at each of the UK credit bureaus with a focus on regulated financial markets. 
