Bahrain Introduces Stricter Anti-Money Laundering Measures for Lawyers

Strengthening Efforts Against Money Laundering and Terrorist Financing

The Kingdom of Bahrain has introduced a new decision aimed at enhancing its efforts to combat money laundering and terrorist financing in the legal profession. This move is part of a broader effort to increase transparency and accountability within the industry.

Key Requirements

• Lawyers are prohibited from receiving cash payments exceeding BD 1,000 (approximately USD 2,600).
• Electronic database must be established to record client details, subject matter, and funds transfer transactions.
• Enhanced due diligence measures must be carried out in certain circumstances, including:
  • Verifying the identity of clients and ultimate beneficiaries
  • Ascertain the purpose of complex transactions
  • Ensure suitability of legal work

Penalties for Non-Compliance

• Imprisonment and fines of up to BD 100,000 (approximately USD 262,000)
• Administrative fines of up to BD 50,000 (approximately USD 131,000)

Compliance Requirements

• Lawyers must nominate a general officer and a compliance officer responsible for implementing anti-money laundering measures.
• Legal professionals must undergo training on anti-money laundering procedures.
• Financial audits must be submitted within three months of the end of each year.

Enforcement and Monitoring

The Bahraini Ministry of Justice has established an Enforcement and Monitoring Unit to oversee compliance with the new rules. Lawyers are required to:

• Notify the unit of any suspicions or breaches within 24 hours
• Provide regular reports on their anti-money laundering activities

Impact and Expectations

The decision is seen as a major step forward in enhancing Bahrain’s efforts to combat money laundering and terrorist financing, and is expected to increase transparency and accountability within the legal profession.