Bahrain Updates Anti-Money Laundering Law with Stronger Measures

His Majesty King Hamad bin Isa Al Khalifa has issued Decree-Law No. 36 of 2025, amending certain provisions of Decree-Law No. 4 of 2001 on the Prevention and Combating of Money Laundering and Terrorism Financing, following a proposal by the Prime Minister and approval by the Cabinet.

The law introduces key updates to definitions, procedures, and responsibilities related to combating financial crimes.

Key Amendments Include:

• Definitions Updated:

  • Implementing Unit now refers to the National Financial Investigations Unit.

  • Proceeds of Crime includes any funds obtained, directly or indirectly, from criminal activity, including profits, interest, or other yields derived from such funds.

  • Risk-Based Approach: Measures to identify, assess, monitor, and mitigate risks of money laundering, terrorism financing, and proliferation financing.

  • Good Faith: Individuals or entities who acquire assets without knowledge of their illicit origin.

• Expanded Legal Measures:

  • Those engaging in actions that conceal, transfer, or retain criminal proceeds can be charged with money laundering.

  • Courts can confiscate funds obtained from crimes, including cases where the criminal dies, while protecting the rights of third parties acting in good faith.

  • Companies may be fined and have criminally obtained assets confiscated if crimes are committed under their name or by their representatives.

• National Anti-Money Laundering Committee:

  • Tasked with developing policies, issuing guidelines, and coordinating with local and international authorities.

  • Oversees compliance with UN conventions, counter-terrorism financing, and national terror lists.

  • Enhances public-private partnerships to strengthen risk awareness and operational effectiveness.

• National Financial Investigations Unit:

  • Receives reports of suspicious transactions, conducts investigations, tracks financial flows, and implements international cooperation measures.

  • Can request documents, access financial records, and temporarily suspend transactions for up to 72 hours for investigation purposes.

  • Coordinates with other agencies to ensure effective monitoring, reporting, and financial tracking.

• International Cooperation:

  • Facilitates exchange of information with foreign authorities regarding suspicious transactions and criminal proceeds.

  • Joint investigations, asset tracing, and recovery can be undertaken through bilateral or multilateral agreements.

• Enforcement & Oversight:

  • Competent authorities monitor and inspect institutions for compliance.

  • Any contracts or actions intended to prevent seizure or confiscation of criminal assets are considered void.

The decree also repeals certain outdated provisions and updates institutional responsibilities to ensure a modern, risk-based approach to preventing money laundering, terrorism financing, and the illegal proliferation of weapons.

Implementation:
The Prime Minister and relevant Ministers are tasked with enforcing the provisions of this law, which comes into effect immediately.