Financial Crime World

Title: Bahrain Parliament Approves Amendments to Money Laundering Law: Higher Penalties and Broader Scope

Bahrain Enhances AML/CFT Regime with New Amendments

Bahrain’s Parliament recently passed significant amendments to the Money Laundering and Terrorism Funding Law as part of the kingdom’s continuous efforts to strengthen its Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) regime. These amendments, included in Royal Decree No. 29 of 2020, aim to tighten controls over money transfers and transactions.

Commitment to Global Best Practices

Bahrain’s commitment to AML/CFT framework enhancement is in line with the country’s business facilitation drive. Bahrain’s unwavering focus on global best practices has contributed to its rise in the World Justice Project’s Ease of Doing Business Index 2021, ranking second in the MENA region.

New Administrative Penalties for Non-compliance

  1. New penalty system: Companies that fail to adhere to AML compliance measures now face fines of up to BD 50,000 (approximately USD 132,000).
  2. Repeat offenses: Non-compliant entities may face multiplied fines and serious consequences for blatant non-compliance.

Enforcement Culture Escalation

Bahrain’s enforcement culture has become more aggressive, as seen in the actions taken by regulatory bodies such as the Real Estate Regulatory Authority (RERA) against non-compliant companies in February 2021. Penalties included fines and suspended licenses, signaling a trend of zero tolerance towards non-compliance.

Further Amendments in the Decree

The following amendments are part of the Royal Decree No. 29 of 2020 besides the new penalty system mentioned above:

  1. Prohibition of implementing UN-imposed financial sanctions: All natural and legal persons are generally prohibited from implementing UN-imposed financial sanctions.
  2. Extension of corporate liability: Corporate liability now extends to money laundering and terrorism financing offenses.
  3. Broad definitions: Key definitions are expanded to provide increased coverage under the AML law.

Preparation for Regulatory Changes

Although the amendments have not yet taken effect, impending regulatory changes emphasize the necessity of vigilant preparation and adaptability to maintain financial integrity within regulated sectors.