Analysis of Bahrain’s anti-money laundering (AML) and combatting of terrorist financing (CTF) practices
| DOI | https://doi.org/10.1108/JMLC-04-2018-0033 |
| Published date | 24 January 2020 |
| Date | 24 January 2020 |
| Pages | 834-847 |
| Subject Matter | Accounting & Finance,Financial risk/company failure,Financial compliance/regulation,Financial crime |
| Author | Mohammed Ahmad Naheem |
Analysis of Bahrain’s anti-money
laundering (AML) and combatting
of terrorist financing (CTF)
practices
Mohammed Ahmad Naheem
Mayfair Compliance, Frankfurt, Germany
Abstract
Purpose –This paper aims to examine thelevel of anti-money laundering (AML) and combatting terrorist
financing (CTF)practices incorporated within the legal frameworkof the Kingdom of Bahrain. The paper also
studies the application of AML/CTF legislation in regulatory practice and implementation. Bahrain is an
important state within the Middle-Eastregion and is an integral part to the Gulf Cooperation Council (GCC).
The paper analyzes Bahrain’s compliance to international AML/CTF standards and presents
recommendationson remaining deficiencies.
Design/methodology/approach –The paper studies the level of AML/CTF legislation enacted by the
Kingdom of Bahrain by first examiningthe regulatory application, and then, the level of implementation. To
understand the level of AML/CTF implementation, the paper uses literature on increased prosecution,
penalties and reports for AML/CTF crimes in the Kingdom of Bahrain. In addition, the paper analyzes
Bahrain’scompliance level to international standards of AML/CTF legislationand regulation.
Findings –The paper finds evidence of significant progress in the application of best practices of
AML/CTF within the Kingdomof Bahrain. The paper also finds an increase in levels of implementation–i.e.
suspicious transaction reports, investigations and prosecutions –with respect to AML/CTF violations.
Additionally,the paper finds a limited number of deficiencies in Bahrain’s effort to establish strongreporting
and enforcementmechanisms.
Practical implications –Bahrain is an important member of the international trade network and one of the
fastest growing non-oil economies in the region. The country sought to diversify the economy, with more industry-
and service-intensive sectors. The level of AML/CTF implementation represents an important risk-averse
approach to financial services in the country. Evidence of the country’s strengthening approach is an important
factor in determining foreign investment confidence and the country’spolicy on combatting terrorism financing.
Originality/value –Commentators have previously recognized key deficiencies in Bahrain’senactment
and applicationof AML/CTF legislation.However, the analysis does not incorporateexternalities arisingfrom
regulatory delay in domestic AML/CTF policy. The following paper studies the progress made by Bahrain
since2000-2001 and subsequent attemptsat improving enforcementto maintain internationalcompliance.
Keywords Bahrain, The Gulf Cooperation Council (GCC), Combating terrorist financing (CTF),
Financial intelligence units (FIUs), MENAFATF, Anti-money laundering
Paper type Case study
Please note that this paper was composed and submitted for review to this journal in September 2017 –All
the content was current at that point in time (September 2017). The banking and regulation industries
alongside governmental policy-making have evolved greatly since September 2017, with new material from
academic research emerging. These points need to be taken into consideration when reading this paper.
The author explicitly states that this research article is not a propaganda piece and in no way has the
author received any form of funding or assistance from any party towards this piece of research. This
paper sets out an approach to extend the discussion on the Gulf region from an independent academic
perspective, employing tools that separate AML/CTF analysis from media opinion.
JMLC
24,4
834
Journalof Money Laundering
Control
Vol.24 No. 4, 2021
pp. 834-847
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-04-2018-0033
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