The Kingdom of Bahrain contributed to the establishment of the Middle East and North Africa Financial Action Task Force (MENAFATF) in November 2004. The Kingdom then hosted the headquarters of the group and provided it with the necessary financial support and operational budget in its first 5 years. This reflected the Kingdom’s belief in the pivotal role of the group in combating money laundering and financing terrorism. It also came as part of the Kingdom’s support to international efforts in this field.
In 2005, the International Monetary Fund evaluated the procedures taken by the Kingdom of Bahrain to combat money laundering and terrorism financing. According to the resolutions of the report issued after the evaluation, the Kingdom developed all the legislation and practices related to money laundering and terrorism financing. The Kingdom’s effort resulted in making it one of the first countries and the region and the world to exit from the regular follow-up process (submitting annual reports) to the biennial update (a report every two years).
LEGISLATIVE DECREE NO. (4) OF 2001 Article 4
THE POLICY COMMITTEE FOR Prohibiting and Combating OF MONEY LAUNDERING and Terrorism Financing
4/1) The Minister of Interior shall in co-ordination with the Competent authorities appoint a policy committee for the Prohibiting and Combating of money laundering and Terrorism Financing.
4/2)The Committee in particular exercise the following:
4/3) The Committee in discharging its functions, may seek the assistance of such entities as it may determine necessary.
4/4)The Minister of Interior shall appoint the Enforcement Unit, which shall have exercise the following:
- Establish procedures to regulate the Committee's works;
- Establish general policies with respect to the Prohibiting and Combating of money laundering and Terrorism Financing
- In co-ordination with the Competent authorities issue guidelines on the reporting of suspicious transactions;
- Study and follow up regional and international developments in the field of money laundering and Terrorism Financing for the purpose of recommending updates to the guidelines and amendment to the Law;
- Co-ordinate with the Competent authorities for the implementing of the United Nations Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, the Arab Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances, the International Convention for the Suppression of the Financing of Terrorism, the United Nations Convention against Transnational Organized Crime and the Protocols thereto, and Relevant conventions, regulations and resolutions in force, and observance of the recommendations of the FATF on combating money laundering and the Terrorism Financing.
4/5) The Competent authorities shall in co-ordination with the Enforcement Unit issue instructions on procedures to Prohibiting and Combating money laundering, Terrorism Financing and illegal transfer of funds across board including the following:
- Receipt of reports on money laundering, Terrorism Financing and illegal transfer of funds across board crimes and related crimes;
- Conducting investigations and compiling evidence in money laundering Terrorism financing and illegal transfer of funds across board crimes and related crimes;
- Execution procedures relating to international co-operation under the provisions of this Law;
- Execution of decisions, orders and decrees issued by the competent courts in money laundering, Terrorism Financing and illegal transfer of funds across board crimes and related crimes.
- Regular reports from institutions on suspicious transactions;
- Institutions reporting on suspicious transactions;
- Institutions establishing the identity of the customers and the beneficiaries of customers and verification of that identity;
- Internal reporting requirements of institutions.
- The Kingdom of Bahrain cooperates with the following international organizations to combat money laundering:
- • Egmont Group of Financial Intelligence Units
- • The Financial Action Task Force (FATF)
- • Middle East and North Africa Financial Action Task Force (MENAFATF)