Financial Crime World

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Financial Crime Prevention Strategies in Bahrain: A Comprehensive Review

The Financial Action Task Force (FATF) has released its Follow-Up Report on Bahrain, which provides an assessment of the country’s implementation of the technical requirements of the FATF Recommendations. The report highlights Bahrain’s efforts in preventing financial crimes such as money laundering and terrorist financing.

Assessment of Risk and Application of a Risk-Based Approach

According to the report, Bahrain is largely compliant with Recommendation R.1, Assessing Risk and Applying a Risk-Based Approach. The country has established a robust risk assessment framework to identify high-risk individuals and entities.

National Cooperation and Coordination

In terms of National Cooperation and Coordination (R.2), Bahrain is also largely compliant, with effective coordination between law enforcement agencies, financial institutions, and other stakeholders in the fight against financial crimes.

Measures to Prevent Financial Crimes

The report notes that Bahrain has made significant progress in implementing measures to prevent:

  • Money Laundering Offences (R.3) and Confiscation and Provisional Measures (R.4)
  • Terrorist Financing Offences (R.5)
  • Targeted Financial Sanctions related to Terrorism and Terrorist Financing (R.6) and Proliferation (R.7)

Other Implementations

In addition, Bahrain’s implementation of measures to prevent the misuse of:

  • Non-Profit Organisations (R.8)
  • Financial Institution Secrecy Laws (R.9)
  • Customer Due Diligence (R.10)
  • Record Keeping (R.11)
  • Politically Exposed Persons (R.12)
  • Correspondent Banking (R.13) and Money or Value Transfer Services (R.14)
  • New Technologies (R.15), such as cryptocurrencies
  • DNFBPs (R.22)
  • Transparency and Beneficial Ownership of Legal Persons and Arrangements (R.24 and R.25)
  • Regulation and Supervision of Financial Institutions (R.26) and DNFBPs (R.28)

Areas for Improvement

While Bahrain’s efforts to prevent financial crimes are commendable, there is still room for improvement in certain areas, including the implementation of measures to prevent the misuse of:

  • Correspondent Banking (R.13)
  • Money or Value Transfer Services (R.14)

Overall, Bahrain’s efforts to prevent financial crimes are notable, with the country largely compliant with many of the FATF Recommendations. However, continued improvement is necessary to ensure effective prevention and detection of money laundering and terrorist financing.