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 efforts to combat corruption through various legislative measures and strategies, including its Economic Vision 2030 and National Anti-Corruption Strategy, as well as joining international conventions against corruption. Despite these initiatives, enforcement of anti-corruption laws remains weak, with reports of officials engaging in corrupt practices without facing consequences. While the National Audit Office plays a role in highlighting fiscal irregularities, the overall effectiveness of anti-corruption measures is hindered by a lack of accountability and transparency in public procurement processes.

Bahrain's economy is transitioning from a hydrocarbon dependency, with the oil and gas sector now contributing less than 20% to its GDP. The government is actively promoting foreign direct investment (FDI) across various sectors, including manufacturing, logistics, and financial services, while state-owned enterprises play a significant role in driving economic growth. Despite challenges such as rising inflation and global supply chain issues, Bahrain's diversified economy and proactive investment policies aim to foster long-term stability and growth.

The investment climate in Bahrain is characterized by a positive and stable environment that actively encourages foreign investment. The government permits 100 percent foreign ownership in various sectors, including manufacturing and tourism, and has established initiatives like the United States Trade Zone to attract U.S. companies. Despite a decrease in annual foreign direct investment inflows, Bahrain's total FDI stock has grown, reflecting its commitment to diversifying the economy beyond hydrocarbons.