Financial Crime World

Bahrain’s Anti-Money Laundering (AML) and Combating the Financing of Terrorism (CFT) Framework

Overview

This report provides an analysis of Bahrain’s AML/CFT framework, highlighting its strengths and weaknesses. The review examines various aspects of the framework, including money laundering prosecutions, blocked bank accounts, suspicious transactions, the financial sector, licensing and supervision, and challenges facing the framework.

Key Points

  • Money Laundering Prosecutions: There are four ongoing money-laundering prosecutions in Bahrain, all originating from suspicious transaction reports (STRs) filed by banks.
  • Blocked Bank Accounts: The BMA has blocked five bank accounts belonging to three persons/organizations suspected of terrorist financing, with a total amount of US$10.3 million frozen as of February 15, 2005.
  • Suspicious Transactions: The AMLU received six STRs from banks regarding possible terrorist financing links, four of which were related to individuals on the U.S. government’s OFAC list.
  • Financial Sector: Bahrain’s financial sector consists of approximately 360 institutions licensed by the BMA, including banks, securities firms and brokers, insurance companies, money changers, and money brokers.

Challenges Facing Bahrain’s AML/CFT Framework

  1. Globalization of Money Flows: The traditional law enforcement approach may become increasingly inadequate as the globalization of money flows into or through Bahrain increases.
  2. Autonomy of the Money Laundering Offense: Jurisprudence will need to be created to establish possibilities and boundaries of prosecution, particularly in cases where the foreign origin of funds is not clear.

Conclusion

Bahrain has made progress in implementing its AML/CFT framework, but there are still significant challenges to overcome in order to effectively combat money laundering and terrorist financing. Addressing these challenges will require a comprehensive approach that includes strengthening supervisory resources, improving communication among national AML efforts, and adapting to the increasing globalization of money flows.