THE KINGDOM OF BAHRAIN’S NATIONAL RISK ASSESSMENT 2025

36 or other payment methods. However, corporate premiums are generally settled through non-cash transactions. 161. Given the ML threats faced by the sector, its vulnerabilities and the strengths of its controls, the sector’s overall ML risk is classified as low . Investment Business Firms Introduction 162. Investment business firms in Bahrain offer two main services: asset management and advisory services. These firms hold investment business licenses, classified into Categories 1, 2, and 4 (asset management) and Category 3 (for advisory services). It is worth noting that most investment business licensees are locally incorporated companies. 163. The client base of the licensees varies; some licensees target high net worth individuals or institutional clients, while others target retail clients. The licensees must classify their clients as retail, expert, or accredited investors, in accordance with the sophistication of clients and the level of risk they can undertake. 164. Investment business firms deal with resident and non-resident clients, mainly in securities and investment products locally and internationally. Although the flow of funds, both inward and outward, is through licensed financial institutions (mostly banks), complex structures and layers of ownership can exist in products those licensees offer, combined with the fact that most of the transactions they undertake are international in nature contributes to the risk of this category. Overall risks 165. In the Kingdom of Bahrain, investment businesses must be licensed by the CBB and are subject to AML/CFT/CPF rules and regulations. More specifically, investment businesses must comply with the provisions set out in the Financial Crime Module of Volume 4 of the CBB Rulebook, which outlines the regulatory requirements to combat ML, TF and PF. These provisions relate to conducting ML/TF/PF risk assessments, implementing CDD and EDD measures, filing suspicious transaction reports and maintaining customer records. 166. Given the ML threats faced by the sector, its vulnerabilities and the strengths of its controls, the sector’s overall ML risk is classified as low . Designated Non-Financial Businesses and Professions (DNFBPs) 167. Designated Non-Financial Businesses and Professions (DNFBPs) are required to follow strict anti- money laundering (AML) laws and regulations. The primary legal framework for DNFBPs in Bahrain is Decree Law No. (4) of 2001, which outlines the country's AML regulations. The Ministry of Industry, Commerce (MOIC), the Ministry of Justice and Islamic Affairs and Waqf (MOJ), and the Real Estate Regulatory Authority (RERA) are the main supervisory and regulatory authorities responsible for overseeing and regulating the DNFBPs sector in Bahrain.