Central Bank of Bahrain Tightens Rules on Customer Due Diligence for Specialised Licensees

The Central Bank of Bahrain has issued new guidelines to strengthen customer due diligence requirements for specialized licensees operating in the country.

Enhancing Customer Due Diligence Practices

Effective immediately, financial institutions and other licensed entities must ensure that they obtain and verify accurate information about their customers, including legal entities and trusts. This includes verifying the identity of individuals with a direct interest in the entity or trust, as well as obtaining certified copies of relevant documents.

Obtaining Identification Documents

Under the new rules, licensed firms are required to obtain original identification documents from customers, which must be certified by an authorized official. In cases where customers provide copy documents, these must be certified by a professional such as a lawyer, accountant, or notary public from a GCC or FATF member state.

Information Gathering and Verification

For legal entities and trusts, licensees must obtain and record specific information from original identification documents, databases, or websites, including details about the entity’s structure, business activities, and ownership. This information must be verified through certified copies of relevant documents, such as certificates of incorporation, trust deeds, and articles of association.

Direct Contact with Customers

The Central Bank has also emphasized the importance of direct contact with customers to confirm their residential address information and other relevant details.

Objectives of the Guidelines

These new guidelines aim to enhance the effectiveness of customer due diligence practices in Bahrain, thereby reducing the risk of financial crime and money laundering. Specialized licensees operating in the country are expected to comply with these requirements immediately.

Key Requirements

• Obtain original identification documents from customers, certified by an authorized official
• Verify identity of individuals with a direct interest in the entity or trust
• Obtain certified copies of relevant documents for legal entities and trusts
• Record specific information about entity structure, business activities, and ownership
• Verify information through certified copies of relevant documents
• Establish direct contact with customers to confirm residential address information and other details