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's government has made strides in addressing corruption through various legislative measures and international commitments, including the establishment of the National Strategy to Combat Corruption and participation in the United Nations Convention Against Corruption. Despite these efforts, challenges remain, such as the inconsistent enforcement of anti-corruption laws and the influence of political repression, which hinder the effectiveness of governance and judicial independence.

In terms of crime resilience, Bahrain faces significant issues, particularly with human trafficking and drug-related offenses, while also contending with cyber crimes and financial fraud facilitated by its robust financial sector. Although the government is proactive in combating organized crime, the lack of dedicated judicial resources and the limited role of civil society organizations in addressing these issues further complicate the situation.

Bahrain's economy is characterized by a stable and welcoming investment climate, with the government actively promoting foreign direct investment (FDI) across various sectors, including manufacturing, logistics, and financial services. The economy, historically reliant on oil and gas, has diversified significantly, with hydrocarbons now contributing less than 20% to the Gross Domestic Product (GDP), and state-owned enterprises (SOEs) playing a crucial role in economic growth while the government seeks to bolster private sector involvement. Despite facing challenges such as fluctuating FDI inflows and rising inflation, Bahrain's strategic initiatives, including the establishment of the U.S. Trade Zone and a focus on sustainable development, position it as an attractive destination for investors looking to tap into the Gulf Cooperation Council (GCC) market.