THE KINGDOM OF BAHRAIN’S NATIONAL RISK ASSESSMENT 2025

26 Foreign Predicate Offence 90. A type of money laundering involves laundering proceeds from predicate offenses committed outside the Kingdom. There have been instances of money laundering involving proceeds from foreign predicate offenses. 91. Bahrain's Financial Intelligence National Center, with the support of international cooperation have proven highly effective in identifying a case that involved illicit financial flows across multiple jurisdictions. These funds were transferred using trade-based methods through financial institutions in the Kingdom. The Kingdom was successful in dismantling a major international Hawala network, thereby disrupting attempts to exploit its financial system as a conduit for illicit funds originating from foreign predicate offences. This case demonstrates the Kingdom’s ability to identify, analyse, and dismantle complex financial crime networks through accurate analysis of suspicious activity, and the investigation led to positive prosecution following a successful conviction and the confiscation of illicit proceeds of crime. 92. Based on the risk analysis, money laundering related to foreign predicate offenses presents a medium threat. A justification to such assessment is that there have been complex cases that involve cross- border transactions and officials from foreign jurisdictions being involved during the sample period. Case Study No. 3 – Trade-Based ML using Money or Value Transfer Services In early 2023, the FINC successfully investigated and disrupted a significant transnational money laundering network originating from the Kingdom of Bahrain. The network utilized money or value transfer services to facilitate illicit financial flows across multiple jurisdictions. Suspicious Transaction Reports (STRs) analysis identified unusual cash deposits and international transfers lacking supporting documentation, FINC uncovered a sophisticated trade-based money laundering operation. CASE SPECIFICS: Two expatriates based in Bahrain were the primary actors in this transnational money laundering network. They employed a sophisticated network of companies and money lenders to facilitate the illegal movement of illicit funds. By leveraging the informal characteristics of MVTS, Suspect A and Suspect B were able to bypass traditional banking channels and regulatory oversight. To enhance its understanding of the suspicious transfers of funds, FINC initiated international cooperation with five FIUs to investigate the beneficiary companies in their respective jurisdictions. Counterpart FIUs provided essential information, revealing that many of these companies had been previously identified in STRs as potential subjects of money laundering. As the Suspects were exploiting their company to conduct transfers to companies abroad, international cooperation was pivotal in understanding the nature of the transfers. FINC, through Egmont Secure Web (ESW), engaged with FIUs of four countries concerning the companies in their jurisdictions. Some companies were revealed to have had a history of sales and purchases with the Suspect’s company in Bahrain. OUTCOMES: FINC's investigation led to the conclusion that the financial activities of the suspects and their company were highly suspicious. As a result, the suspects were summoned for questioning. During the interrogation, one of the suspects confessed to operating an illegal funds transfer network on behalf of an accomplice (Suspect C) from their home country. The suspects also disclosed that Suspect C and their clients were of the same nationality. The evidence collected during the investigative process, comprising