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 significant strides in addressing corruption through various legislative measures and strategies, including its Economic Vision 2030 and National Anti-Corruption Strategy, which emphasize accountability and oversight. While corruption is not widespread and is actively combated, challenges remain, particularly regarding the enforcement of conflict-of-interest laws and the political environment affecting civil society's role in addressing these issues.

In terms of crime resilience, Bahrain faces challenges from human trafficking and drug-related offenses, with organized crime primarily manifesting through loose networks rather than structured groups. The government is engaged in international efforts to combat organized crime and has established a robust regulatory framework; however, concerns about judicial independence and the effectiveness of law enforcement in tackling specific crimes persist.

Bahrain's economy and investment climate are characterized by a stable and business-friendly environment that actively encourages foreign investment across various sectors. While traditionally reliant on oil and gas, which now constitutes about 16% of its GDP, Bahrain is diversifying its economy with significant contributions from the financial services, tourism, and manufacturing sectors, supported by initiatives like the United States Trade Zone (USTZ) aimed at attracting U.S. companies. The government's Vision 2030 plan emphasizes job creation, strategic project launches, and fiscal sustainability, alongside a commitment to enhancing the regulatory framework to facilitate foreign direct investment and bolster Bahrain's position as a regional hub for startups and innovation.