Law tightening financial crime penalties heads to Parliament

Amendment

Strengthening trust in Bahrain’s financial system will be among the issues discussed during the upcoming parliamentary session, as MPs review the Financial and Economic Affairs Committee's report concerning Decree Law No. 37 of 2025.

The decree law amends Article 161 of the Central Bank of Bahrain and Financial Institutions Law (Law No. 64 of 2006) as part of broader efforts to enhance the efficiency of the Kingdom’s financial and regulatory framework.

According to the committee’s report, the amendment forms part of ongoing work to develop Bahrain’s legislative and supervisory structure for the financial sector, strengthening the Kingdom’s ability to combat financial crimes while ensuring compliance with international standards related to anti money laundering and counter terrorism financing.

Compliance

The report noted that the legislative amendment represents a balanced step aimed at reinforcing legal deterrence and improving compliance mechanisms. These measures are expected to support financial stability, strengthen investor confidence and safeguard the national financial system from illicit activities.

It also highlighted that stricter penalties for violating entities, particularly virtual asset service providers, would enhance both general and specific deterrence while ensuring penalties are proportionate to the seriousness of violations and their potential impact on the national financial system.

The decree law also comes as Bahrain prepares for upcoming international evaluations measuring the Kingdom’s compliance with recommendations issued by the Financial Action Task Force concerning anti-money laundering and counter-terrorism financing. 

Confidence

The report indicates that the amendments strengthen Bahrain’s position as a regional financial centre aligned with international best practices.

The changes are expected to improve financial stability, enhance transparency and compliance within the financial sector, and reinforce investor confidence in Bahrain’s economic environment.

Behind the technical language of financial legislation lies a broader goal: protecting the stability of the national economy and ensuring that the financial system continues to serve businesses, investors and society with integrity and trust.