Financial Crime World

Title: Bahrain’s Central Bank Updates Financial Crime Reporting Requirements for Specialised Licensees

The Central Bank of Bahrain (CBB) has announced updates to the financial crime reporting requirements for specialised licensees with the release of the revised Rulebook Volume 5: Specialised Licensees, Common Module. This new framework is aimed at strengthening Bahrain’s financial sector’s resilience to financial crimes and aligns with the recommendations of the Financial Action Task Force (FATF).

Key Changes in the Updated Module

  1. Customer Due Diligence The module introduces enhanced requirements for the customer due diligence process. Financial institutions must:

    • Verify the identity of beneficial owners, Politically Exposed Persons (PEPs), and high-risk profiles.

  2. Risk-Based Approach Licensees are required to apply a risk-based approach to establish Anti-Money Laundering/Countering the Financing of Terrorism (AML/CFT) programs and assess potential money laundering, terrorist financing, and proliferation financing risks.

  3. Correspondent Banking Relationships Institutions must conduct enhanced due diligence for correspondent banking relationships.

  4. Suspicious Transaction Reporting Financial institutions must report suspicious transactions internally and externally to the relevant authorities when detected.

  5. Group-Wide Programs Implementation of group-wide programs against money laundering and terrorist financing for financial groups and their subsidiaries is mandatory.

Comprehensive Guidelines

The new framework covers other important aspects as well:

  • Employee Training: Regular training for staff handling financial transactions.
  • Record Keeping: Proper recordkeeping procedures for AML/CFT-related data.
  • Enforcement Measures: Measures for enforcing AML/CFT policies and procedures.

Examples of Suspicious Activities

The updated module provides examples of suspicious activities and guidance from international bodies. It also includes reporting forms to streamline the process.

Effective Date

These updates will become effective as of the publication date of the Revised Rulebook.

Ongoing Efforts

The CBB will continue reviewing and updating its regulatory measures to ensure they remain effective in combatting financial crimes. Specialised licensees are expected to comply with the new requirements and adapt their internal procedures accordingly.