THE KINGDOM OF BAHRAIN’S NATIONAL RISK ASSESSMENT 2025

24 virtual assets and mule accounts which has led to an increase in the ML threat level. As such, drug trafficking is considered to pose a medium-high threat to Money Laundering. Case Study No. 1 – ML using Virtual Assets Service Provider In 2023, the Financial Intelligence National Center (FINC) disrupted a money laundering operation linked to drug trafficking and laundered via Virtual Asset Service Providers (VASPs). CASE SPECIFICS: After receiving a Suspicious Transaction Report (STR), FINC initiated an investigation which revealed that Suspect A was operating a network from outside the jurisdiction. He hired associates who exploited an ancillary service provider application, due to its convenience and ease of use, to receive payments from buyers. The associates would provide their IBAN to the buyers, and once payment was received, the drugs would be placed at a hidden location and shared the coordinates with the buyer. A detailed operational financial analysis conducted by FINC revealed that proceeds from the drug sales were transferred through the ancillary service provider application. Once received, Suspect B, who played a key role in the complex layering and laundering process, would release an equivalent value in virtual currency to the associate’s wallet address via peer-to-peer (P2P) transactions, deducting his commission. The associates would then transfer the virtual currencies to Suspect A’s wallet address via P2P, completing the laundering cycle. OUTCOMES: After thorough investigation and legal proceedings, 22 individuals were found guilty. The perpetrators were: - Sentenced: 5-years of imprisonment and Fined: 100,000 BHD Confiscated Proceeds: Nearly 12 million BHD Deported: To be deported after their sentence ML Threat – Fraud Introduction 87. Fraud refers to instances in which a perpetrator collects funds from victims for the alleged purpose of investing those funds without gaining the required license. Without the knowledge of the victims, most perpetrators do not engage in any business investments and only intend on taking possession of their victim’s funds. Conclusion 88. The previous National Risk Assessment deemed the threat level of Fraud offences to be high to Money Laundering due to the amount of proceeds and the inclusion of sophisticated offenders capable of structuring and layering proceeds. 89. Coordinated & cooperation efforts by various law enforcement authorities under the Ministry of Interior proved to be effective, as authorities were able to curb the frequency of such crimes through the adoption of new technologies to aid in detection and successful awareness campaigns. Furthermore, the establishment of the National Cyber Security Center in 2020 also contributed