Financial Crime World

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Bahrain Takes Major Leap Forward in Risk-Based Approach to AML/CFT

The Financial Action Task Force (FATF) has praised Bahrain’s efforts in implementing a risk-based approach to Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT). In its latest report, Bahrain was found to be largely compliant with FATF recommendations on R.1 - Assessing Risk and Applying a Risk-Based Approach.

Progress and Compliance

The report highlights Bahrain’s significant progress in implementing a risk-based approach to AML/CFT, which involves identifying and assessing risks associated with money laundering and terrorist financing. This approach enables financial institutions to focus their resources on higher-risk areas and individuals, thereby enhancing the effectiveness of AML/CFT measures.

Bahrain also demonstrated compliance with R.2 - National Cooperation and Coordination, as well as R.9 - Financial Institution Secrecy Laws. The country’s efforts in implementing measures to prevent the misuse of shell companies and legal arrangements for money laundering and terrorist financing purposes were also commended.

Room for Improvement

The report noted that Bahrain still needs to improve its implementation of certain recommendations, including R.11 - Record Keeping and R.17 - Reliance on Third Parties. However, overall, the country’s efforts in implementing a risk-based approach to AML/CFT are commendable, and it is expected to continue making progress in this area.

Commitment to Combating Money Laundering and Terrorist Financing

The FATF report highlights Bahrain’s commitment to combating money laundering and terrorist financing, and its efforts to strengthen its financial system and prevent illicit activities. The country’s risk-based approach is seen as an important step towards achieving these goals and ensuring the integrity of its financial sector.

Key Takeaways:

  • Bahrain has made significant progress in implementing a risk-based approach to AML/CFT
  • The country demonstrated compliance with several FATF recommendations, including R.1, R.2, and R.9
  • Bahrain still needs to improve its implementation of certain recommendations, including R.11 and R.17
  • The country’s commitment to combating money laundering and terrorist financing is commendable
  • The risk-based approach is an important step towards achieving these goals and ensuring the integrity of the financial sector