BMA developing anti-money laundering laws for insurance firms, capital market

The Agency is also upgrading AML regulations for the banking sector, to incorporate recent changes made to the 40 Recommendations of the Financial Action Task Force (FATF), which sets international standards to combat money laundering and terrorist financing.

The new moves will reinforce Bahrain's established leadership as an international financial center of excellence as well as BMA's reputation as the most highly regarded regulator in the Middle East region.

"Money laundering is an ever-evolving threat ... and the BMA has been active in addressing the issues of money laundering and terrorism financing," said Dr Khalid Abdulla Ateeq, Executive Director, Banking Supervision, in his keynote address to the First Annual Anti-Money laundering & Terrorist Financing Conference and Workshop.

Dr Ateeq delivered the keynote address on behalf of H.E. Shaikh Ahmed bin Mohammed Al Khalifa, Governor of the BMA.

The event, on 15th and 16th February 2004, has been organized by the Bahrain Institute of Banking & Finance (BIBF), under the patronage of the BMA.

"Throughout the development of Bahrain as a financial center, the Government and BMA have recognized that a sound regulatory framework and clean market have been essential components of its long-term success," said Dr Ateeq.

"Implementing an effective AML regime forms an integral component of that strategy."

BMA began implementing Know Your Customer (KYC) requirements, in line with standards set by the Basel Committee on Banking Supervision, in the 1980s, followed by a comprehensive AML Law from the start of 2001.

The crafting of appropriate regulation has been complemented by enforcement, to ensure real on-ground compliance by banks.

BMA is now in the process of updating the AML law, to reflect the recent changes made to FATF's 40 Recommendations, to ensure continued compliance with international best practice, said Dr Ateeq.

"We will also be introducing proposals for similar AML requirements tailored for insurance businesses, as well as AML requirements for capital market players," he said.

"The intention with both these sectors is to apply the same basic requirements as is currently applied to banks, to ensure comparability of treatment whilst recognizing the specific differences that exist in these sectors."

Other recent efforts of the BMA have included the hosting of a meeting, last month, of officials of Arab central banks and certain G10 countries, as well as international organizations, to discuss the possibility of creating a regional FATF-style body for the Middle East and North Africa (MENA).

Bahrain has offered to host the secretariat of such an organization and to finance its start-up costs, Dr Ateeq pointed out.

Other speakers at the BIBF conference and workshop are focusing on such issues as money laundering practices, tax havens of the world, the USA Patriot Act and its impact on Middle East banking, special money laundering problems of emerging nations, AML tips, as well as money changers and the hawala system.