Financial Crime World

Bahrain Steps Up AML/CFT Efforts Amid Global Scrutiny

Aligning with FATF Recommendations

The Financial Action Task Force (FATF) has been revising its Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) standards in recent years, and Bahrain is taking steps to align with these changes. The country’s efforts come as global attention focuses on AML/CFT compliance, particularly in light of international pressure.

Revisions to Beneficial Ownership Standards

In 2023, the FATF revised Recommendations 24 and 25, which deal with beneficial ownership of legal persons and arrangements, respectively. These revisions aim to strengthen standards on identifying and understanding who ultimately owns or controls a company. Bahrain has been working to update its regulations to meet these new requirements.

  • Updated Regulations: Bahrain’s regulatory bodies have been revising their guidance on non-profit organizations (NPOs), which are considered high-risk entities due to their potential for terrorist financing.
  • Risk-Based Measures: The revised standards will require NPOs to implement risk-based measures and submit to regular supervision.
  • Enhanced Transparency: Bahrain is committed to enhancing transparency in its regulatory framework, making it easier to identify beneficial owners and understand company structures.

Strengthening Asset Recovery Capabilities

Bahrain has also made efforts to enhance its asset recovery capabilities, with the FATF revising Recommendations 4, 30, 31, and 38 in October 2023. These changes aim to improve the country’s ability to recover assets linked to financial crimes.

  • Improved Cooperation: Bahrain has strengthened its cooperation with international partners to combat financial crimes.
  • Independent Anti-Money Laundering Authority: The country has established an independent anti-money laundering authority to oversee and enforce AML/CFT regulations.
  • Asset Recovery: Bahrain is working to improve its asset recovery capabilities, making it easier to recover assets linked to financial crimes.

Progress on AML/CFT Compliance

The FATF has been monitoring Bahrain’s progress on AML/CFT since 2019, when it was placed under increased scrutiny due to concerns over its compliance with global standards. In response, Bahrain has implemented several reforms aimed at strengthening its regulatory framework and improving transparency.

  • Revised Anti-Money Laundering Law: Bahrain has revised its anti-money laundering law to align with international standards.
  • Beneficial Ownership Register: The country has established a beneficial ownership register to enhance transparency in company structures.
  • International Cooperation: Bahrain has strengthened its cooperation with international partners to combat financial crimes.

Conclusion

While there is still work to be done, Bahrain’s progress on AML/CFT is seen as positive by the FATF and other international organizations. The country’s efforts demonstrate its commitment to improving its regulatory framework and enhancing transparency in the fight against financial crimes.