Financial Crime World

Bahrain’s Financial Crime Landscape: A Look at the Types of Illegal Activities Perpetrated in the Country

The Financial Action Task Force (FATF) has been monitoring Bahrain’s efforts to combat financial crimes, and its latest report reveals a mixed picture. While some areas have shown significant improvement, others still require attention.

Assessment of Risk and National Cooperation

Bahrain has made progress in assessing risk and applying a risk-based approach, with a rating of “largely compliant” (LC). However, the country falls short in implementing national cooperation and coordination, receiving a rating of “compliant” (C).

Combating Financial Crimes

The report highlights Bahrain’s strengths in combating:

  • Money laundering: LC
  • Terrorist financing: LC
  • Proliferation financing: LC
  • Targeted financial sanctions related to terrorism and terrorist financing: LC

However, there are areas that require improvement, including:

  • Confiscation and provisional measures: C
  • Financial institution secrecy laws: C

Customer Due Diligence and Record Keeping

Bahrain needs to enhance its customer due diligence, record keeping, and internal controls and foreign branches and subsidiaries. These all received an LC rating, indicating that while progress has been made, more work is needed.

International Cooperation

In terms of international cooperation, Bahrain has made progress in:

  • Providing mutual legal assistance: LC
  • Freezing and confiscation: LC
  • Extradition: LC
  • Other forms of international cooperation: LC

However, there are areas that require improvement, including:

  • Reliance on third parties: C
  • Reporting of suspicious transactions: LC

Regulation and Supervision of Financial Institutions

Bahrain needs to strengthen its regulation and supervision of financial institutions, powers of supervisors, and regulation and supervision of DNFBPs.

Conclusion

While Bahrain has made significant progress in combating financial crimes, there are still areas where improvement is needed. The country must continue to work towards implementing the technical requirements of the FATF Recommendations to ensure a safer and more transparent financial system.