• FC-1.1 FC-1.1 General Requirements

    • Verification of Identity and Source of Funds

      • FC-1.1.1

        Licensees must establish effective systematic internal procedures for establishing and verifying the identity of their customers and the source of their funds. Such procedures must be set out in writing and approved by the licensee's senior management. They must be strictly adhered to.

        Amended: January 2020
        Added: October 2010

      • FC-1.1.2

        Licensees must implement the customer due diligence measures outlined in Chapters 1, 2 and 3 when:

        (a) [This Sub-paragraph was deleted in July 2018];
        (b) Carrying out wire transfers (of the equivalent of US$1,000 or above) (particularly relevant for money changers);
        (c) Establishing business relations with a new or existing customer;
        (d) A change to the signatory or beneficiary of an existing account or business relationship is made;
        (e) Customer documentation standards change substantially;
        (f) The licensee has doubts about the veracity or adequacy of previously obtained customer due diligence information;
        (g) A significant transaction takes place (see FC-2.2.3);
        (h) There is a material change in the way that an account is operated or in the manner in which the business relationship is conducted; or
        (i) There is a suspicion of money laundering or terrorist financing.
        Amended: January 2021
        Amended: July 2018
        October 2010

      • FC-1.1.2A

        Licensees must understand, and as appropriate, obtain information on the purpose and intended nature of the business relationship.

        Added: October 2017

      • FC-1.1.2B

        Licensees must conduct ongoing due diligence on the business relationship, including:

        (a) Scrutinizing transactions undertaken throughout the course of that relationship to ensure that the transactions being conducted are consistent with the institution's knowledge of the customer, their business and risk profile, including, where necessary, the source of funds; and
        (b) Ensuring that documents, data or information collected under the CDD process is kept up-to-date and relevant, by undertaking reviews of existing records, particularly for higher risk categories of customers.
        Added: October 2017

      • FC-1.1.3

        Representative office licensees are not allowed to undertake business directly with customers. However, they may be assigned by the Head Office to contact new or existing customers on their behalf, in this case they must pay regard to (c) – (f) and (h-i) customer due diligence measures listed under FC-1.1.2 above.

        October 2010

      • FC-1.1.4

        For the purposes of this Module, "customer" includes counterparties such as financial markets counterparties, except where financial institutions are acting as principals where simplified due diligence measures may apply. These simplified measures are set out in Section FC 1.10. For the representative office licensees, 'customer' includes customers of the HO that the Representative office liaises with for general purposes. Examples might include general inquiries and inquiries regarding the accuracy of customer information.

        October 2010

      • FC-1.1.5

        The CBB's specific minimum standards to be followed with respect to verifying customer identity and source of funds are contained in Section FC-1.2 and in the Guidance Notes (See Supplementary Information, FC-7 in Part B of the Rulebook). Enhanced requirements apply under certain high-risk situations: these requirements are contained in Sections FC-1.3 to FC-1.9 inclusive. Additional requirements apply where a licensee is relying on a professional intermediary to perform certain parts of the customer due diligence process: these are detailed in Section FC-1.7. Simplified customer due diligence measures may apply in defined circumstances: these are set out in Section FC-1.10.

        October 2010

      • FC-1.1.5A

        Financing company licensees and payment service providers must not onboard natural persons resident in countries outside the GCC through digital onboarding process. Onboarding of customers resident outside Bahrain must be subject to the enhanced due diligence requirements outlined in Section FC-1.3.

        Added: January 2021

      • FC-1.1.5B

        Money changers must not register persons identified as having high-risk profiles, including those whose CPR has expired, for the purposes of the use of online channels or applications, without conducting the enhanced due diligence requirements outlined in Section FC-1.3.

        Added: January 2021

    • Verification of Third Parties

      • FC-1.1.6

        Licensees must obtain a signed statement from all new customers (or for one-off transactions above the BD6,000 threshold for moneychangers) confirming whether or not the customer is acting on their own behalf or not. This undertaking must be obtained prior to conducting any transactions with the customer concerned.

        October 2010

      • FC-1.1.7

        Where a customer is acting on behalf of a third party, the licensee must also obtain a signed statement from the third party, confirming they have given authority to the customer to act on their behalf. Where the third party is a legal person, the licensee must have sight of the original board resolution (or other applicable document) authorising the customer to act on the third party's behalf, and retain a certified copy. Representative office licensees must obtain a signed statement from all new customers confirming whether or not the customer is acting on their own behalf or not.

        October 2010

      • FC-1.1.8

        Licensees must establish and verify the identity of the customer and (where applicable) the party/parties on whose behalf the customer is acting, including the Beneficial Owner of the funds. Verification must take place in accordance with the requirements specified in this Chapter.

        October 2010

      • FC-1.1.9

        Where financial services are provided to a minor or other person lacking full legal capacity, the normal identification procedures as set out in this Chapter must be followed. In the case of minors, licensees must additionally verify the identity of the parent(s) or legal guardian(s). Where a third party on behalf of a person lacking full legal capacity wishes to open business relations, the licensee must establish the identity of that third party as well as the person conducting the business.

        October 2010

    • Anonymous and Nominee Accounts

      • FC-1.1.10

        Licensees must not establish or keep anonymous accounts or accounts in fictitious names. Where licensees maintain a nominee account, which is controlled by or held for the benefit of another person, the identity of that person must be disclosed to the licensee and verified by it in accordance with the requirements specified in this Chapter.

        October 2010

    • Timing of Verification

      • FC-1.1.11

        Licensees must not commence a business relationship or undertake an occasional transaction (above the threshold) with a customer before completion of the relevant customer due diligence measures specified in Chapters 1, 2 and 3. However, verification may be completed after receipt of funds in the case of non face-to-face business, or the subsequent submission of CDD documents by the customer after initial face-to face contact, providing that no disbursement of funds takes place until after the requirements of this Chapter have been fully met.

        October 2010

    • Incomplete Customer Due Diligence

      • FC-1.1.12

        Where a licensee is unable to comply with the requirements specified in Chapters 1, 2 and 3, it must consider whether to terminate the relationship or not proceed with the transaction. If it proceeds with the transaction (to avoid tipping off the customer), it should additionally consider whether it should file a suspicious transaction report.

        October 2010

      • FC-1.1.13

        See also Chapter FC-5, which covers the filing of suspicious transaction reports.

        October 2010