Back Custom print Link Text Only Rich Text Print

  • FC-4.3 FC-4.3 Compliance monitoring

    • Annual Compliance Review

      • FC-4.3.1

        An Islamic bank licensee must review the effectiveness of its AML/CFT procedures, systems and controls at least once each calendar year. The review must cover the Islamic bank licensee and its branches and subsidiaries both inside and outside the Kingdom of Bahrain. The scope of the review must include:

        (a) a report, containing the number of internal reports made in accordance with Section FC-5.1, a breakdown of all the results of those internal reports and their outcomes for each segment of the licensee's business, and an analysis of whether controls or training need to be enhanced;
        (b) a report, indicating the number of external reports made in accordance with Section FC-5.2 and, where a Islamic bank licensee has made an internal report but not made an external report, noting why no external report was made;
        (c) a sample test of compliance with this Module's customer due diligence requirements; and
        (d) a report as to the quality of the Islamic bank licensee's anti-money laundering procedures, systems and controls, and compliance with the AML Law and this Module.

      • FC-4.3.2

        The reports listed under Paragraph FC-4.3.1 (a) and (b) must be made by the MLRO. The sample testing required under Paragraph FC-4.3.1 (c) must be undertaken either by the licensee's internal audit function or its external auditors. The report required under Paragraph FC-4.3.1 (d) must be made by the licensee's external auditors.

      • FC-4.3.3

        The reports listed under Paragraph FC-4.3.1 must be submitted to the licensee's Board, for it to review and commission any required remedial measures, and copied to the licensee's senior management.

      • FC-4.3.4

        The purpose of the annual compliance review is to assist a licensee's Board and senior management to assess, amongst other things, whether internal and external reports are being made (as required under Chapter FC-5), and whether the overall number of such reports (which may otherwise appear satisfactory) does not conceal inadequate reporting in a particular segment of the licensee's business (or, where relevant, in particular branches or subsidiaries). Islamic bank licensees should use their judgement as to how the reports listed under Paragraph FC-4.3.1 (a) and (b) should be broken down in order to achieve this aim (e.g. by branches, departments, product lines, etc).

      • FC-4.3.5

        Islamic bank licensees must instruct their external auditors to produce the report referred to in Paragraph FC-4.3.1 (d). The report must be submitted to the BMA by the 30th of April of the following year. The findings of this review must be received and acted upon by the licensee.

      • FC-4.3.6

        The external auditors may rely upon work performed by the licensee's internal audit function, as part of their procedures for producing the statement referred to in Paragraph FC-4.3.5.