Bahrain Faces Scrutiny on International Financial Regulations Compliance

Bahrain has recently been assessed by the Financial Action Task Force (FATF) regarding its implementation of international financial regulations aimed at combating money laundering and terrorist financing. The report highlights Bahrain’s progress, but also identifies areas for improvement.

Progress in Implementing FATF Recommendations

The report assesses Bahrain’s compliance with 40 recommendations under the FATF framework. The ratings reflect the extent to which these recommendations have been implemented:

• Ratings:

  • R.1 - Assessing risk & applying risk-based approach: Largely Compliant
  • R.2 - National cooperation and coordination: Compliant
  • R.3 - Money laundering offence: Largely Compliant
  • R.4 - Confiscation and provisional measures: Compliant
  • R.5 - Terrorist financing offence: Largely Compliant
  • R.6 - Targeted financial sanctions related to terrorism & terrorist financing: Largely Compliant
  • R.7 - Targeted financial sanctions related to proliferation: Largely Compliant
  • R.8 - Non-profit organisations: Largely Compliant
  • R.9 - Financial institution secrecy laws: Compliant
  • R.10 - Customer due diligence: Largely Compliant
  • R.11 - Record keeping: Compliant
  • R.12 - Politically exposed persons: Largely Compliant
  • R.13 - Correspondent banking: Largely Compliant
  • R.14 - Money or value transfer services: Largely Compliant
  • R.15 - New technologies: Largely Compliant
  • R.16 - Wire transfers: Largely Compliant
  • R.17 - Reliance on third parties: Compliant
  • R.18 - Internal controls and foreign branches and subsidiaries: Compliant
  • R.19 - Higher-risk countries: Largely Compliant
  • R.20 - Reporting of suspicious transactions: Largely Compliant
  • R.21 - Tipping-off and confidentiality: Largely Compliant
  • R.22 - DNFBPs: Customer due diligence: Partially Compliant
  • R.23 - DNFBPs: Other measures: Largely Compliant
  • R.24 - Transparency and beneficial ownership of legal persons: Largely Compliant
  • R.25 - Transparency and beneficial ownership of legal arrangements: Largely Compliant
  • R.26 - Regulation and supervision of financial institutions: Largely Compliant
  • R.27 - Powers of supervisors: Largely Compliant
  • R.28 - Regulation and supervision of DNFBPs: Largely Compliant
  • R.29 - Financial intelligence units: Compliant
  • R.30 - Responsibilities of law enforcement and investigative authorities: Compliant
  • R.31 - Powers of law enforcement and investigative authorities: Compliant
  • R.32 - Cash couriers: Largely Compliant
  • R.33 - Statistics: Largely Compliant
  • R.34 - Guidance and feedback: Largely Compliant
  • R.35 - Sanctions: Largely Compliant
  • R.36 - International instruments: Largely Compliant
  • R.37 - Mutual legal assistance: Largely Compliant
  • R.38 - Mutual legal assistance: freezing and confiscation: Largely Compliant
  • R.39 - Extradition: Largely Compliant
  • R.40 - Other forms of international cooperation: Largely Compliant

Areas for Improvement

While Bahrain has made significant progress in implementing the FATF Recommendations, there are still areas that require attention, particularly:

• Non-profit organisations: Bahrain needs to improve its customer due diligence and other measures for non-profit organisations.
• Customer due diligence: The government should continue working towards full compliance with customer due diligence requirements.

Conclusion

The report suggests that while Bahrain has made significant progress in implementing the FATF Recommendations, there are still areas for improvement. The government will need to continue working towards full compliance with these regulations to maintain its reputation as a responsible member of the international community.