Analysis of Bahrain’s anti-money laundering (AML) and combatting of terrorist financing (CTF) practices
Journal of Money Laundering Control
ISSN: 1368-5201
Article publication date: 24 January 2020
Issue publication date: 21 October 2021
Abstract
Purpose
This paper aims to examine the level of anti-money laundering (AML) and combatting terrorist financing (CTF) practices incorporated within the legal framework of 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-East region and is an integral part to the Gulf Cooperation Council (GCC). The paper analyzes Bahrain’s compliance to international AML/CTF standards and presents recommendations on remaining deficiencies.
Design/methodology/approach
The paper studies the level of AML/CTF legislation enacted by the Kingdom of Bahrain by first examining the 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’s compliance level to international standards of AML/CTF legislation and regulation.
Findings
The paper finds evidence of significant progress in the application of best practices of AML/CTF within the Kingdom of 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 strong reporting and enforcement mechanisms.
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’s policy on combatting terrorism financing.
Originality/value
Commentators have previously recognized key deficiencies in Bahrain’s enactment and application of AML/CTF legislation. However, the analysis does not incorporate externalities arising from regulatory delay in domestic AML/CTF policy. The following paper studies the progress made by Bahrain since 2000-2001 and subsequent attempts at improving enforcement to maintain international compliance.
Keywords
Acknowledgements
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.
Citation
Naheem, M.A. (2021), "Analysis of Bahrain’s anti-money laundering (AML) and combatting of terrorist financing (CTF) practices", Journal of Money Laundering Control, Vol. 24 No. 4, pp. 834-847. https://doi.org/10.1108/JMLC-04-2018-0033
Publisher
:Emerald Publishing Limited
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