THE KINGDOM OF BAHRAIN’S NATIONAL RISK ASSESSMENT 2025

7 EXECUTIVE SUMMARY Overview 5. The Kingdom of Bahrain conducted its first comprehensive National Risk Assessment in 2017 which was adopted by the Cabinet of Ministers in the year 2018. The outcomes of the report guided the enhancement to the Kingdom’s AML/CFT framework. This included amendments to rules and regulations, and enhancements to supervisory efforts across several governmental agencies. Although the NRA was updated in the year 2021, this report is intended to reassess the risks given the emerging threats and inherent risks. This is mainly because the AML/CFT Committee risk assessment working groups recommended it, citing the increase in technological advancements and the development of new products and services across the assessed sectors. 6. Overall, the report provides an analysis of the national risks and vulnerabilities related to ML, TF and PF risks and the associated criminal activities. Such an assessment is a result of utilizing the World Bank tool which aids in the identification of the threats and vulnerabilities of the assessed sectors. The report also outlines the methodology used to assess these risks and examines the national ML risk landscape and identifies the key sources and methods of ML, TF and PF activity. 7. The threat assessment takes into account the identification of threats considering the geographical feature of the Kingdom of Bahrain. As such, the vulnerabilities in the assessed sectors, namely financial services, VASPs and DNFBPs, are assessed to determine the level of risks in the context of the identified threats. More specifically, the assessment included a review on the existing AML/CFT/CPF controls adopted by the different supervisory bodies. National Cooperation and Coordination 8. In compliance with Bahrain's commitment to international standards and best practices in Anti- Money Laundering (AML), Countering the Financing of Terrorism (CFT) and Countering Proliferation Financing (CPF), the AML/CFT Committee is established under the Ministerial Order (116) of 2023, and composed of representatives from various government agencies, including regulators, law enforcement agencies and other relevant competent authorities. One of the strategic objectives and primary responsibilities of the Committee is to assess the Kingdom’s risks and vulnerabilities arising from its national, regional and international context, and monitor advancements in the effectiveness of Kingdom’s risk-based approach to AML/CFT/CPF and the application of a risk-based approach (RBA) to ensure that measures are being enforced to prevent or mitigate money laundering and terrorist financing are commensurate with the risks identified. 9. The Financial Intelligence National Centre, represented by the Director of Evaluation and Follow-up Directorate, has been appointed as the secretary of the Committee, and is responsible for following- up on the progress of the Committee and liaising with the Working Group to ensure adequate coordination and progress.