THE KINGDOM OF BAHRAIN’S NATIONAL RISK ASSESSMENT 2025

11 25. The above key concepts and terminology have been used in this assessment, however, the ‘consequences’ assessment has been considered during the analysis of threats and vulnerabilities to elaborate on the impact or harm that ML/TF/ PF may cause. Includes three factors: threat, vulnerability and consequence. An ML/TF risk assessment is a process that attempts to identify, analyze and understand ML/TF risks and serves as a first step in addressing them. Ideally, a risk assessment involves making judgments about threats, vulnerabilities and consequences. Risks •Potential harm caused to for example, the state, society, the economy, etc. by a person or group of people, object or activity. In the ML/TF context this includes criminals, terrorist groups, their facilitators, their funds, as well as past, present and future ML or TF activities. Threat serves as an essential starting point in understanding of ML/TF risk. Threats •The state of being exposed to the possibility of harm from threat. In this context, looking at vulnerabilities as distinct from threat means focusing on factors that represent weaknesses in things, including but not limited to, systems, processes, or controls in place in a country. Vulnerabilities •Refers to the impact or harm that ML or TF may cause and includes the effect of the underlying criminal and terrorist activity on financial systems and institutions, as well as the economy and society more generally. The consequences of ML or TF may be short or long term in nature and may also relate to populations, specific communities, the business environment, national or international interests, as well as the reputation and attractiveness of a country’s financial sector. Consequence