Bahrain Enhances Anti-Money Laundering Regime

In an effort to strengthen its financial crime enforcement, Bahrain has taken significant steps towards reforming its anti-money laundering (AML) legislation. The proposed amendments aim to align the country’s regulatory landscape with international best practices.

New Penalties for Non-Compliance

One of the most notable changes introduced by the amendments is the introduction of an administrative penalty of up to 50,000 Bahraini dinars for companies found guilty of failing to implement required AML compliance measures. This fine can be multiplied in cases where multiple failures are identified, resulting in potentially astronomical penalties for entities that fail to meet the necessary standards.

Broadening Corporate Liability Provisions

The proposed amendments extend corporate liability provisions for money laundering and terrorism financing offences. Key definitions have been broadened to increase the scope of activity that may fall within the remit of the AML law.

Enhancing Business Facilitation Drive

The move comes as part of a broader effort by Bahrain to enhance its business facilitation drive and improve its ranking on the World Justice Project Ease of Doing Business Index. The country has already seen a notable increase in enforcement actions taken against non-financial supervisors, with several companies facing punitive measures for non-compliance with RERA guidelines.

Targeted Financial Sanctions

A general prohibition has been introduced to prevent natural and legal persons from implementing targeted financial sanctions imposed by the United Nations Security Council. This amendment aims to ensure compliance with international regulations and strengthen Bahrain’s reputation as a leader in AML regulation.

Impact on Regulated Entities

Once adopted into law, these amendments are expected to provide a significant incentive for regulated entities to ensure their compliance programmes meet the latest requirements of the authorities. The move is set to further cement Bahrain’s reputation as a leader in AML regulation in the MENA region.