Charity Fundraisers Face Source-of-Funds Checks

The Shura Council will debate a decree-law that makes licensed charity fundraisers disclose where money comes from, how it is spent and file audited reports with the competent authority.

Decree-Law No. 39 of 2025 amends Bahrain’s 2013 law on raising money for public purposes. It changes the definition of a licence-holder, rewrites parts of the licensing rules, and gives the authority new room to check fundraising work according to the level of risk tied to each group or activity.

The Services Committee has recommended approval, saying the measure is aimed at stopping public donations from being misused for money laundering or terrorism financing while allowing lawful charity work to carry on.

Under the changes, licensed bodies would have to keep clearer records of the source of funds, the way money is spent and the purposes for which it is used. The committee said this would help make sure donations reach those meant to receive them.

The decree-law also brings in risk-based oversight. Rather than treating every fundraiser in the same way, the competent authority would be able to direct checks towards work seen as more exposed to misuse.

The committee said this would help regulators pick up warning signs earlier and focus on fundraising activities most open to abuse, without placing needless weight on lawful charity work.

It said: ‘The decree-law establishes a modern oversight approach based on risk analysis and assessment, allowing the competent authority to direct its supervisory tools according to the actual level of risk posed by each activity or licensed entity.’

Penalties would also change. The decree-law adds administrative fines alongside criminal sanctions, giving the authority a wider range of tools to deal with breaches according to their seriousness.

The Legislation and Legal Opinion Commission said the measure was issued because methods used in money laundering and terrorism financing continue to change. It also said Bahrain had to keep pace with Financial Action Task Force (FATF) standards and the National Risk Assessment.

The committee tied the measure to Bahrain’s FATF assessment in 2026. It warned that delay could raise the risk of Bahrain being placed on the FATF grey list, with harm to the financial sector, the wider economy and overseas trust in the kingdom’s investment climate.

The decree-law has three articles. The first amends parts of the 2013 law, the second adds two new articles, and the third deals with bringing the decree-law into force.