Bahrain’s measures to fight money laundering and the financing of terrorism and proliferation

Publication details

Language

English

Country

Bahrain

Mutual Evaluation Report of Bahrain - 2018

Filename
MER-Bahrain-2018.pdf
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2 MB
Format
application/pdf
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Paris, 4 September 2018 – The Kingdom of Bahrain has the foundation for an effective regime to combat money laundering and terrorist finance, but needs to further develop its measures based on risk.

The FATF and the Middle East and North Africa Financial Action Task Force (MENAFATF) jointly conducted an assessment of Bahrain's AML/CFT system, based on the 2012 FATF Recommendations, and using the 2013 Methodology. The assessment is a comprehensive review of the effectiveness of Bahrain's AML/CFT system and its level of compliance with the FATF Recommendations.

At the time of the on-site visit, Bahrain’s national risk assessment was ongoing. Although the country demonstrated a moderate level of understanding of its money laundering and terrorist financing risks, it should use the risk assessment, incorporating information from outside Bahrain, to further strengthen its measures. This includes amending the terrorism offence, which is currently inconsistent with the Terrorist Financing Convention, and pursuing both money laundering and terrorist financing in line with the country’s risk profile. 

Bahrain has identified a subset of non-profit organisations for potential terrorism abuse. However, the country currently applies restrictive obligations on all non-profit organisations operating in Bahrain. In line with the FATF’s requirements, the country should implement mitigation measures that are commensurate to the risks.

Banks, money value transfer services, insurance and securities sectors have a good understanding of money laundering and terrorist financing risks. Financial institutions are able to implement targeted financial sanctions without delay. However, designated non-financial businesses have a fragmented understanding of ML/TF risks and the majority do not implement targeted financial sanctions without delay.

Bahrain demonstrated a high level of domestic co-operation and information exchange. The country has also demonstrated that it co-operates well with counterparts in other countries, responding to formal requests for mutual legal assistance and informal requests for information.

FATF adopted this report at its Plenary meeting in June 2018 (Outcomes FATF-MENAFATF Joint Plenary, 27-29 June 2018).

Technical Compliance

Ratings which reflect the extent to which a country has implemented the technical requirements of the FATF Recommendations.

Bahrain Mutual Evaluation 2018

R.1 - Assessing risk & applying risk-based approach
PC
R.2 - National cooperation and coordination
LC
R.3 - Money laundering offence
LC
R.4 - Confiscation and provisional measures
C
R.5 - Terrorist financing offence
PC
R.6 - Targeted financial sanctions related to terrorism & terrorist financing
PC
R.7 - Targeted financial sanctions related to proliferation
PC
R.8 - Non-profit organisations
LC
R.9 - Financial institution secrecy laws
C
R.10 - Customer due diligence
LC
R.11 - Record keeping
C
R.12 - Politically exposed persons
LC
R.13 - Correspondent banking
LC
R.14 - Money or value transfer services
LC
R.15 - New technologies
C
R.16 - Wire transfers
LC
R.17 - Reliance on third parties
C
R.18 - Internal controls and foreign branches and subsidiaries
LC
R.19 - Higher-risk countries
LC
R.20 - Reporting of suspicious transactions
LC
R.21 - Tipping-off and confidentiality
LC
R.22 - DNFBPs: Customer due diligence
PC
R.23 - DNFBPs: Other measures
PC
R.24 - Transparency and beneficial ownership of legal persons
LC
R.25 - Transparency and beneficial ownership of legal arrangements
LC
R.26 - Regulation and supervision of financial institutions
LC
R.27 - Powers of supervisors
LC
R.28 - Regulation and supervision of DNFBPs
LC
R.29 - Financial intelligence units
C
R.30 - Responsibilities of law enforcement and investigative authorities
C
R.31 - Powers of law enforcement and investigative authorities
C
R.32 - Cash couriers
LC
R.33 - Statistics
LC
R.34 - Guidance and feedback
LC
R.35- Sanctions
LC
R.36 - International instruments
LC
R.37 - Mutual legal assistance
LC
R.38 - Mutual legal assistance: freezing and confiscation
LC
R.39 - Extradition
LC
R.40 - Other forms of international cooperation
LC

C = compliant   |   LC = largely compliant     |   PC = partially compliant   |   NC = non-compliant

Effectiveness

Ratings that reflect the extent to which a country's measures are effective. The assessment is conducted on the basis of 11 immediate outcomes, which represent key goals that an effective AML/CFT system should achieve.

Ratings that reflect the extent to which a country's measures are effective. The assessment is conducted on the basis of 11 immediate outcomes, which represent key goals that an effective AML/CFT system should achieve.

Bahrain Mutual Evaluation 2018

IO1
ME
IO2
SE
IO3
SE
IO4
ME
IO5
ME
IO6
SE
IO7
ME
IO8
ME
IO9
ME
IO10
ME
IO11
ME

HE = high level of effectiveness   |   SE = substantial level of effectiveness    |   ME = moderate level of effectiveness   |   LE = low level of effectiveness

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