New measures on combating money laundering, terror funding

Justice, Islamic Affairs and Endowments Minister Shaikh Khalid bin Ali Al-Khalifa issued edict 64 of 2017 stipulating the commitments of lawyers and foreign legal firms to measures on combating and prohibiting money laundering and terror funding.

The edict is in line with the criteria set by the Middle East and North Africa Financial Action Task Force (MENAFATF) against Money Laundering and Terrorist Financing as well as the UN conventions and agreements and the UN Security Council resolutions.

The edict makes it mandatory for lawyers’ offices, foreign legal offices and firms to comply with law 4 of 2001 on prohibiting and combating money laundering and terror funding to ensure their operations are not used for money laundering and terror funding.

The edict makes it mandatory to notify the follow-up and monitoring unit (Interior Ministry’s Financial Investigation Directorate) about any suspicious or abnormal activities, when conducting transactions on behalf of their customers – including real estate transactions, fund and asset management and all types of banking accounts.

Lawyers’ offices, foreign legal offices and firms are required to verify the information provided by their customers as well clients who demand legal opinion regarding the powers of attorney and write down details in special records accredited by the Ministry of Justice, Islamic Affairs and Endowments and inform the follow-up unit about any suspicious information.

The edict which was issued by the minister defines suspicious and abnormal activities as being “the operations which are suspected to be linked, directly or indirectly, to the crimes involving money-laundering and terror funding.

The edict also makes it mandatory for licensed lawyers and foreign firms to open accounts for professional purposes in a bank accredited by the Central Bank of Bahrain (CBB) – all payments or funds collected from or on behalf of customers shall be deposited in the bank.

Lawyers and foreign firms are also required to set up special e-records to register all lawyers’ activities, legal opinions provided to customers – citing the following details (customer’s name and data, subject of the power of attorney or legal opinion and date of the service provided to customers, amount of money paid to the legal firm, financial transaction serial number, name of the bank and date of the transfer).

Source: BNA