Due diligence is the process of researching and verifying information about a person, company, or transaction before entering into a business relationship. For UK-regulated businesses, it is a legal requirement under the Money Laundering Regulations 2017, which mandate that firms identify who they are dealing with, assess risk, and take steps to prevent financial crime. Failing to conduct proper due diligence can result in regulatory sanctions, reputational damage, and in serious cases, criminal liability. Intelect provides investigator-led due diligence that goes beyond automated searches to uncover what the data does not show on the surface.

Customer Due Diligence (CDD) is the standard level of checks required when onboarding most clients, typically confirming identity, verifying the nature of the business relationship, and assessing basic risk. Enhanced Due Diligence (EDD) applies to higher-risk situations, such as Politically Exposed Persons (PEPs), clients from high-risk jurisdictions, complex ownership structures, or transactions above certain thresholds. EDD involves significantly deeper investigation, including adverse media screening, source of wealth and funds analysis, and third-party intelligence gathering. Intelect Group delivers both CDD and EDD reports, tailored to the level of risk.

EDD is triggered by a combination of risk indicators. Under the UK Money Laundering Regulations 2017, EDD is automatically required for Politically Exposed Persons (PEPs) and their associates, clients or transactions involving high-risk third countries, correspondent banking relationships, and situations where the client is not physically present for identification. Firms must also apply EDD where their own risk-based assessment identifies elevated risk, for example, unusually complex ownership structures, high-value transactions, or sectors known for vulnerability to financial crime.

A Politically Exposed Person (PEP) is an individual who holds, or has held within the last 12 months, a prominent public function, such as a head of state, senior politician, judge, military official, or board member of a state-owned enterprise. Their close family members and known associates also fall within scope. PEPs present a higher risk of bribery and corruption by virtue of their position and access to public funds. Under UK regulations, any business relationship with a PEP requires senior management approval, source of wealth checks, and ongoing enhanced monitoring.

A Suspicious Activity Report (SAR) is a formal disclosure made to the National Crime Agency (NCA) in the UK (or other nominated law enforcement agency, dependent on your jurisdiction) when a regulated business knows, suspects, or has reasonable grounds to suspect that a person is involved in money laundering or terrorist financing. SARs must be submitted before carrying out a transaction where possible (a “consent SAR”), and as soon as practicable in other circumstances. Failure to file a SAR when required is a criminal offence. Staff training on identifying and escalating suspicious activity is essential for compliance.

The UK Money Laundering Regulations 2017 apply to a defined range of sectors known as the “regulated sector.” These include financial institutions and banks, accountancy and audit firms, legal practices, estate agents and letting agents (since 2020), trust and company service providers, high-value dealers, and crypto-asset businesses. These businesses must have documented AML policies, conduct risk assessments, train staff, apply customer due diligence, and report suspicious activity. Supervision is currently carried out by sector-specific bodies including the FCA, HMRC, and professional associations such as the ICAEW and SRA. However, this is likely to change in 2026 with the FCA becoming the pivotal body.

UK regulatory guidance requires AML training to be provided to relevant staff on a regular basis, typically interpreted as annually as a minimum, with additional training when regulations change or new risks emerge. The FCA and HMRC both emphasise that one-off training is insufficient; ongoing awareness and role-specific content are expected. Training should be documented, with completion records retained as evidence in the event of a regulatory inspection. Intelect provides CPD-certified training programmes that can be delivered online or in-person and adapted to specific sectors.