A regulation is not an Act: the legislature passes the Act, and a body it authorizes writes the regulation. In the EU it is not a directive either. The EU's founding treaty makes a regulation "binding in its entirety and directly applicable in all Member States", while a directive binds "as to the result to be achieved" and leaves the form and methods to each country (TFEU Article 288).
What is regulation?
Cornell's legal dictionary defines a regulation as "a rule made and maintained by an authority, typically a governmental agency, to control or govern conduct within its jurisdiction", and notes that agencies are "delegated legislative power" (Cornell LII Wex). US federal law calls them rules (5 U.S.C. 553), and the UK makes them as statutory instruments, as it did the Money Laundering Regulations 2017.
In AML, regulations are how the FATF Recommendations reach a bank. FATF addresses its standard to countries, and each country writes it into its own Acts and regulations.
How are regulations made in the US, the EU and the UK?
Table 1. How a regulation is made and binds in the US, the EU and the UK, with one AML example each.
| Jurisdiction | Who makes it | Power from | How it is made | AML example |
|---|---|---|---|---|
| US | A federal agency, such as FinCEN | An Act of Congress | Proposal in the Federal Register, public comment, final rule published usually at least 30 days before it takes effect (5 U.S.C. 553) | The report on cash over $10,000 (31 CFR 1010.311) |
| EU | The European Parliament and the Council, on a Commission proposal | The EU treaties | Ordinary legislative procedure; applies directly, with no national transposition | Regulation (EU) 2024/1624, applying from 10 July 2027 |
| UK | HM Treasury, by statutory instrument | An Act of Parliament | Laid before Parliament; some, such as SI 2026/621, need approval by each House | Money Laundering Regulations 2017; thresholds in sterling since 30 June 2026 |
Each row rests on a higher text, an Act or, in the EU, the treaties. The UK amendment of 2026 shows the steps: the Treasury made it on 9 June 2026 under a 2018 Act on sanctions and money laundering, after a draft was "approved by a resolution of each House of Parliament", and most of it came into force 21 days later (SI 2026/621). One change swapped "10,000 euros" for "£10,000" in the rule for high value dealers and casinos.
Regulation vs law: what's the difference?
A law in the narrow sense is the Act, broad and changed only by the legislature. A regulation fills in the detail, and its maker can change it within the Act's limits. Guidance sits lower. TFEU Article 288 says recommendations and opinions "shall have no binding force", and 5 U.S.C. 553 exempts interpretative rules and policy statements from notice and comment.
In an AML policy, cite the rule text that creates each duty and, separately, the guidance that shapes how it is done: the FATF Recommendations and a supervisor's guidance explain what good looks like, but only the law and its regulations bind the firm.
In Loper Bright v. Raimondo, decided 28 June 2024, the US Supreme Court held that courts judge for themselves whether an agency stayed within its statutory authority and "may not defer to an agency interpretation of the law simply because a statute is ambiguous" (Cornell LII).
What are the types of regulations, by industry?
Industries that handle money, health or public risk are subject to regulations. The main types, with one landmark regulation in action for each:
- Financial crime. Customer checks and reporting, such as the UK Money Laundering Regulations 2017.
- Securities. SEC rules on market disclosure and trading.
- Prudential. Capital and liquidity rules for banks built on Basel III.
- Data protection. The GDPR, an EU regulation that applies directly in every member state.
- Environmental. EPA limits on what plants emit.
- Health and safety. OSHA standards for safer workplaces.
- Food and drugs. FDA rules on what may be sold and how it is labeled.
- Consumer protection. Rules on fair treatment, disclosure and complaints.
Who are the regulatory agencies?
AMLA, the EU's anti money laundering authority, shows the difference between writing rules and supervising them. It has existed since 26 June 2024; during 2027 it selects 40 obliged entities for direct supervision, and that supervision starts during 2028 (AMLA).
Regulation is rule making; supervision is checking that firms follow the rules. In the US, FinCEN writes the Bank Secrecy Act rules and the SEC regulates securities markets; in the UK, the FCA supervises financial firms. Inside each firm, the AML compliance officer answers to those regulatory agencies.
Why are regulations important, and what are their effects?
Regulations matter because they turn a broad law into a duty someone can check: a threshold, a deadline, a record to keep.
Their effects run both ways. Individuals get safer goods, workplaces and data, while businesses carry compliance costs and paperwork in return for a clearer line between what is allowed and what is not.
What do AML regulations ask of the banking sector?
In plain terms, AML regulations ask a bank for five things, each traced to a FATF Recommendation:
- A risk assessment of its customers, products and countries (R.1).
- Customer due diligence before and during the relationship (R.10).
- Monitoring of transactions against what the bank knows about the customer (R.10), including cash split to dodge a report, called structuring.
- Reporting suspicious activity to the financial intelligence unit (R.20).
- Records kept for at least five years (R.11).
In complead, formerly Sanction Scanner, every detection rule is versioned and every change records who changed what, when and why, so a regulatory compliance review can see how a rule stood on a past date.
Before the next policy review, decide for each control in your AML policy which rule text creates the duty and which guidance explains how to meet it.
Related terms
- Compliance. Meeting the duties that laws and regulations set.
- FATF Recommendations. The global AML standard countries write into regulation.
- AML compliance officer. The person who answers to the regulator.
- DNFBP. Businesses outside finance that AML rules also cover.
- Anti money laundering (AML). The laws and controls that stop criminal money entering the system.
How this entry was checked
Sources checked on 26 October 2026: TFEU Article 288, Cornell's Wex definition, 5 U.S.C. 553, Loper Bright v. Raimondo (28 June 2024), the UK Money Laundering Regulations 2017 and SI 2026/621 on legislation.gov.uk, Regulation (EU) 2024/1624, AMLA's own timeline and 31 CFR 1010.311. The definition rests on how these sources use the word: a binding rule made under powers delegated by a law. Last reviewed: 26 October 2026, by Dilara Diker, Head of Compliance. Author: Minhac Celik, Marketing Advisor.
