The effectiveness of Anti-Money Laundering policies and procedures within the Banking Sector in Bahrain
| Published date | 13 March 2020 |
| Pages | 769-781 |
| Date | 13 March 2020 |
| DOI | https://doi.org/10.1108/JMLC-10-2019-0080 |
| Author | Mark Eshwar Lokanan,Noor Nasimi |
The effectiveness of Anti-Money
Laundering policies and
procedures within the Banking
Sector in Bahrain
Mark Eshwar Lokanan
Faculty of Management, Royal Roads University, Victoria, Canada, and
Noor Nasimi
Gulf International Bank, Bahrain
Abstract
Purpose –The purpose of this paper is to identify the anti-money laundering (AML) policies and
proceduresapplied by the banks operating in Bahrain and assess the effectiveness of these policies.
Design/methodology/approach –Data for the study came from semi-structured interviews with
complianceofficers in Bahrain’s banking sector. A total of 22 interviews wereconducted with Bahraini money
launderingreporting officers and bankers.
Findings –The findings indicate thatthe banks in Bahrain comply with international AML proceduresin
combating money laundering.Despite Bahrain being ranked as having strongcompliance policies and AML
procedures among the Gulf CooperationCouncil region, there are still issues with regulatory technologythat
needs to be addressed.
Practical implications –While there has been a positive impact of AML procedures,there are always
more proceduresthat can be taken into considerationby banks in Bahrain to have more robustmechanisms to
mitigateagainst the threat of money laundering.
Originality/value –To the best of authors’knowledge, this paper is among the first to conduct an
informed study of the effectiveness of compliance in the Bahrain’sfinancial sector. It can be used as a
foundationpaper for more mix-research on money launderingthreats facing Bahrain’s banks.
Keywords Compliance, Banks, Anti-money laundering, FATF
Paper type Research paper
1. Introduction
Money laundering is a global phenomenon affecting financial institutions across the globe. Briefly
put, money launderingis considered to be illegal activity whereby criminal networksdisguise their
illegal activities with a goal of generating profit(
Ryder, 2012). Recently, in line with Basel III
guidelines and requirements (BIS, 2016), more emphasis has been placed on anti-money laundering
(AML) procedures and the roles of the compliance officers –money laundering reporting officer
(MLRO). In this paper, we use Bahrain as a prototypical jurisdiction to evaluate the effectiveness of
AML policies in the financial sector. More specifically, the objective of the paper is to identify the
AML policies and procedures applied by the banks operating in Bahrain and assess the
effectiveness of their compliance policies. The following questionswill guide the inquiry:
Q1. What are the AML policies and procedures appliedby banks in Bahrain?
Q2. How effective are the AMLpolicies and procedures applied in Bahrain?
Procedures
within the
banking sector
in Bahrain
769
Journalof Money Laundering
Control
Vol.23 No. 4, 2020
pp. 769-781
© Emerald Publishing Limited
1368-5201
DOI 10.1108/JMLC-10-2019-0080
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