Bahrain Country Summary

FATF Status

Bahrain is not currently on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The last follow-up Mutual Evaluation Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Bahrain was undertaken in 2022. According to that Evaluation, Bahrain was deemed Compliant for 9 and Largely Compliant for 30 of the FATF 40 Recommendations. It remains Highly effective for 0 and Substantially Effective for 3 of the Effectiveness & Technical Compliance ratings

Bahrain has made efforts to combat corruption, including the establishment of legislation under its Economic Vision 2030 and the National Anti-Corruption Strategy, as well as joining international conventions against corruption. Despite these measures, the implementation of bribery laws remains incomplete, and some officials reportedly engage in corrupt practices without facing consequences. The National Audit Office plays a crucial role in identifying fiscal irregularities, while local NGOs are less focused on corruption issues, although civil society activists have raised concerns.

Bahrain's economy is transitioning from a hydrocarbon dependency, with the oil and gas sector now contributing less than 20% to its GDP. The government is actively promoting foreign direct investment (FDI) across various sectors, including manufacturing, logistics, and financial services, while state-owned enterprises play a significant role in economic growth. In 2023, Bahrain's total FDI stock reached $33.8 billion, reflecting a stable investment climate despite a slight decrease in annual FDI inflows.

The investment climate in Bahrain is positive and stable, characterized by a business-friendly environment that actively attracts foreign investment. The government has prioritized expanding the private sector's role in the economy, reducing reliance on hydrocarbons, and has implemented policies to facilitate foreign direct investment across various sectors, including manufacturing, logistics, and financial services.