Bahrain’s Fight Against Financial Crime Needs a Boost, Says Global Watchdog

The Kingdom of Bahrain has been advised to strengthen its measures against financial crime by the global watchdog, the Financial Action Task Force (FATF) and the Middle East and North Africa Financial Action Task Force (MENAFATF).

Foundation for a Robust Anti-Money Laundering Regime

While Bahrain has a moderate level of understanding of money laundering and terrorist financing risks, it needs to use its national risk assessment to further strengthen its measures. According to a joint assessment by the FATF and MENAFATF, Bahrain’s AML/CFT system has the foundation for a robust anti-money laundering regime.

Areas of Improvement

• Amending the Terrorism Offence: The current terrorism offence is inconsistent with the Terrorist Financing Convention. Bahrain needs to amend this to bring it in line with international standards.
• Mitigation Measures for Non-Profit Organisations: Bahrain should implement mitigation measures on non-profit organisations that are commensurate to the risks, rather than applying restrictive obligations on all organisations operating in the country.

Financial Institutions and Designated Non-Financial Businesses

• Understanding of Money Laundering Risks: Bahrain’s financial institutions have a good understanding of money laundering risks. However, designated non-financial businesses have a fragmented understanding of these risks.
• Implementation of Targeted Financial Sanctions: The majority of these businesses do not implement targeted financial sanctions without delay.

Domestic Co-operation and Information Exchange

Bahrain demonstrated a high level of domestic co-operation and information exchange with other countries. It responded well to formal requests for mutual legal assistance and informal requests for information.

Conclusion

The FATF’s assessment is based on the 2012 FATF Recommendations and the 2013 Methodology. The report was adopted at the FATF Plenary meeting in June 2018.