Financial Crime World

Bahrain Urged to Strengthen AML/CFT Regulations

FATF and MENAFATF Joint Assessment Recommends Improvements

A recent joint assessment by the Financial Action Task Force (FATF) and the Middle East and North Africa Financial Action Task Force (MENAFATF) has identified areas for improvement in Bahrain’s anti-money laundering (AML) and combating the financing of terrorism (CFT) regime. While Bahrain has a solid foundation for an effective AML/CFT system, there are several key recommendations that need to be addressed.

Key Recommendations

  • Comprehensive Risk Assessment: Bahrain needs to strengthen its understanding of its risks through a comprehensive risk assessment that incorporates information from outside the country.
  • National Risk Assessment: The ongoing national risk assessment should inform further action, including amending the terrorism offence and pursuing both money laundering and terrorist financing in line with the country’s risk profile.
  • Targeted Approach to Regulating Non-Profit Organisations: Bahrain needs to take a more targeted approach to regulating non-profit organisations, which are at risk of being abused for terrorist financing purposes.

Progress in AML/CFT Implementation

While there is still room for improvement, the report notes that:

  • Banks and Financial Institutions: Have a good understanding of AML/CFT risks and are implementing measures effectively.
  • Designated Non-Financial Businesses: Need to improve their understanding and implementation of AML/CFT measures, including lawyers and accountants.

Domestic Co-operation and Information Exchange

The report praises Bahrain’s level of domestic co-operation and information exchange with international partners. The country has demonstrated a high level of effectiveness in responding to requests for mutual legal assistance and informal information sharing.

By addressing the key recommendations outlined in this joint assessment, Bahrain can further strengthen its AML/CFT regime and ensure that it is effective in combating money laundering and terrorist financing.