Financial Crime World

Bahrain Urged to Further Develop Measures Against Financial Crime

A recent joint assessment by the Financial Action Task Force (FATF) and the Middle East and North Africa Financial Action Task Force (MENAFATF) has revealed that Bahrain has a solid foundation for combating money laundering and terrorist financing. However, the report warns that the country needs to strengthen its measures based on risk.

Progress in Combating Money Laundering and Terrorist Financing

The assessment, conducted in June 2018, evaluated Bahrain’s Anti-Money Laundering/Combating the Financing of Terrorism (AML/CFT) system against the FATF Recommendations and methodology. The review found that Bahrain has made progress in understanding its money laundering and terrorist financing risks but needs to incorporate information from outside the country into its national risk assessment.

Areas for Improvement

The report highlights several areas where Bahrain can improve, including:

  • Amending terrorism offence: Aligning its terrorism offence with international standards
  • Pursuing cases in line with risk profile: Pursuing both money laundering and terrorist financing cases in accordance with the country’s risk profile
  • Implementing mitigation measures on non-profit organisations: Implementing mitigation measures on non-profit organisations that are commensurate with the risks they pose

Good Practices

Bahrain’s financial institutions have a good understanding of money laundering and terrorist financing risks, but designated non-financial businesses and professionals (DNFBPs) have a fragmented understanding of these risks and often fail to implement targeted financial sanctions without delay. The report praises Bahrain’s domestic co-operation and information exchange, as well as its ability to co-operate with other countries in responding to formal requests for mutual legal assistance and informal requests for information.

Next Steps

The FATF has called on Bahrain to address the areas of concern identified in the report and to further develop its measures against financial crime. The country’s progress will be closely monitored by the FATF and MENAFATF in the coming months.