Guidelines for Conventional Retail Bank Licensees Operating in Bahrain: Onboarding and Management of Non-Resident Customers

Documented Criteria for Accepting Business from Non-Resident Customers

Conventional retail bank licensees operating in Bahrain must have documented criteria for accepting business from non-resident customers. This includes ensuring there is a viable economic reason for the business relationship, performing enhanced due diligence where required, and obtaining necessary documentation.

FC-1.1.12: Onboarding Non-Resident Customers

• Ensure there is a viable economic reason for the business relationship.
• Perform enhanced due diligence where required.
• Obtain and document the country of residence for tax purposes.
• Obtain evidence of banking relationships in the country of residence.
• Obtain reasons for dealing with the licensee in Bahrain.
• Test that the persons are contactable without unreasonable delays.

Restrictions on Accepting Non-Resident Customers from High-Risk Jurisdictions

Conventional retail bank licensees must not accept non-resident customers from high-risk jurisdictions, subject to a call for action by FATF (Financial Action Task Force). Licensees must take adequate precautions and risk mitigation measures before onboarding non-resident customers from high-risk jurisdictions.

FC-1.1.12A: Restrictions on Accepting Non-Resident Customers

• Conventional retail bank licensees must not accept non-resident customers from high-risk jurisdictions, subject to a call for action by FATF.
• Licensees must take adequate precautions and risk mitigation measures before onboarding non-resident customers from high-risk jurisdictions.

Informing Non-Resident Customers of Service Limitations

Where a non-resident account is opened, the customer must be informed by the conventional bank licensee of any services which may be restricted or otherwise limited as a result of their non-resident status. Examples of limitations or restrictions for non-resident accounts may include limitations on banking services being offered.

FC-1.1.15: Informing Non-Resident Customers

• Where a non-resident account is opened, the customer must be informed by the conventional bank licensee of any services which may be restricted or otherwise limited as a result of their non-resident status.
• Examples of limitations or restrictions for non-resident accounts may include limitations on banking services being offered.

Customer Due Diligence and Customer Onboarding Requirements

Conventional bank licensees must follow customer due diligence (CDD) and customer onboarding requirements:

• For Bahrainis, GCC nationals, and expatriates resident in Bahrain: No enhanced due diligence is required.
• For others: Enhanced due diligence is required.

FC-1.1.17: Customer Due Diligence

• Conventional bank licensees must follow customer due diligence (CDD) and customer onboarding requirements:
  • For Bahrainis, GCC nationals, and expatriates resident in Bahrain: No enhanced due diligence is required.
  • For others: Enhanced due diligence is required.

These guidelines aim to ensure that conventional retail bank licensees operating in Bahrain conduct thorough due diligence and risk assessments when dealing with non-resident customers, particularly those from high-risk jurisdictions. The goal is to prevent money laundering, terrorist financing, and other illicit activities while ensuring compliance with international standards and regulations.