Financial Crime World

Bahrain’s Central Bank Strengthens Anti-Money Laundering Measures

The Central Bank of Bahrain (CBB) has issued new regulations aimed at strengthening anti-money laundering (AML) and combating financial crime measures in the country’s capital markets.

New Regulations for Capital Market Licensees

Under the new rules, Capital Market Licensees are required to:

  • Perform periodic reviews to ensure that any introducer they rely on is compliant with the Financial Action Task Force (FATF) Recommendations.
    • Verify whether the jurisdiction in which the introducer is resident is also compliant with the FATF Recommendations.

Customer Due Diligence Requirements

The regulations also require Capital Market Licensees to:

  • Obtain and verify identification documents and other customer due diligence material, which can be accessed by the licensee and kept for at least five years after the business relationship has ended.
  • Ensure that all identification data and relevant documentation is accessible upon request.

Reliance on Third Parties

The CBB has introduced new requirements for reliance on third parties for conducting customer due diligence. Licensees may rely on a third-party financial institution that is regulated and supervised for AML/CFT standards, but must:

  • Ensure that the third party meets certain criteria, including providing access to identification data and other relevant documentation upon request.
  • Enter into written agreements with third parties.
  • Specify measures to be taken in case of termination of the arrangement.
  • Re-perform customer due diligence if deficiencies are identified.

Commitment to AML/CFT

“Strengthening our anti-money laundering measures is crucial for maintaining a robust financial system and protecting the integrity of our capital markets,” said [Name], Governor of the Central Bank of Bahrain. “We are committed to ensuring that our regulations remain effective in preventing money laundering and combating financial crime.”

Effective Date and Applicability

The new regulations are expected to come into effect on [Date] and apply to all Capital Market Licensees operating in Bahrain.