Financial Crime World

BAHRAIN BANKS FACE SCRUTINY OVER COMPLIANCE WITH INTERNATIONAL FINANCIAL REGULATIONS

The banking sector in Bahrain has come under the spotlight as regulators and international bodies tighten their grip on compliance with financial regulations.

BOK International Complies with AML/CFT Standards

BOK International, an Islamic Wholesale Bank licensed by the Central Bank of Bahrain (CBB), has committed to complying with local and international legislation and regulatory bodies. The bank has established a Compliance Department that acts as its focal point for regulatory compliance, anti-money laundering and combating terrorist financing.

Compliance with Anti-Money Laundering (AML) and Combating Terrorist Financing (CTF)

  • BOK International complies with applicable standards of AML/CFT practices in all markets and jurisdictions in which it operates.
  • The bank has put in place an AML/CFT policy, procedures, and guidelines to ensure group-wide compliance.

Compliance with FATCA and CRS

BOK International has registered as a foreign financial institution with the US’s Internal Revenue Service (IRS) under the Foreign Account Tax Compliance Act (FATCA). The bank has also obtained a Global Intermediary Identification Number (GIIN).

Compliance with FATCA Laws and Regulations

  • BOK International will comply with FATCA laws and regulations, which require financial institutions to identify their US clients and report on foreign income and assets held by US taxpayers outside the US.
  • The bank will contact some of its customers to collect information related to their tax status from January 2017 onwards.

Regulators Urged to Enforce Compliance

As international bodies continue to tighten their grip on compliance, regulators in Bahrain are urged to enforce stricter regulations and ensure that banks comply with financial laws and regulations.

CBB’s Efforts to Enhance Compliance

  • The Central Bank of Bahrain (CBB) has been actively working with banks to enhance their compliance with AML/CFT standards and FATCA/CRS requirements.
  • The regulator has also set up a framework for the automatic exchange of information between member states relating to tax payers within the OECD.

Consequences of Non-Compliance

Banks that fail to comply with financial regulations face penalties, fines, and reputational damage. Non-compliance can also lead to loss of licenses and business opportunities.

BOK International’s Commitment to Compliance

  • In a statement, BOK International said: “The bank is committed to maintaining the highest standards of compliance and will continue to work closely with regulators to ensure that all regulatory requirements are met.”

Conclusion

The banking sector in Bahrain faces increased scrutiny over compliance with international financial regulations. Banks must ensure that they comply with AML/CFT, FATCA/CRS requirements and other regulations to avoid penalties, fines, and reputational damage.

Regulators must also take a proactive approach to enforcing compliance, ensuring that banks adhere to financial laws and regulations. By working together, regulators and banks can maintain the integrity of the financial system and prevent financial crimes of all types.