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  • AML-1.1 AML-1.1 General Requirements

    • Verification of Identity and Source of Funds

      • AML-1.1.1

        Capital Market 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 Capital Market Licensees senior management and must be strictly adhered to.

        Amended: January 2022
        Amended: January 2020
        Amended: July 2016
        Added: October 2010

      • AML-1.1.2

        Capital Market Licensees must implement the customer due diligence measures outlined in Chapter AML-1 when:

        (a) [This Sub-paragraph was deleted in July 2018];
        (b) Establishing business relations with a new or existing customer;
        (c) A change to the signatory or beneficiary of an existing account or business relationship is made;
        (d) Customer documentation standards change substantially;
        (e) The Capital Market Licensees has doubts about the veracity or adequacy of previously obtained customer due diligence information;
        (f) A significant transaction takes place (as per rule AML-2.2.3);
        (g) There is a material change in the way that an account is operated or in the manner in which the business relationship is conducted;
        (h) There is a suspicion of Money Laundering or terrorist financing; or
        (i) Carrying out accepted crypto-assets transfers and/or wire transfers irrespective of value and/or amount.
        Amended: January 2022
        Amended: January 2020
        Amended: July 2018
        Added: October 2010

      • AML-1.1.2A

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

        Amended: January 2022
        Added: October 2017

      • AML-1.1.2B

        Capital Market 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.
        Amended: January 2022
        Added: October 2017

      • AML-1.1.2C

        A capital market licensee must also review and update the customers’ risk profile based on their level of ML/TF/PF risk upon onboarding and regularly throughout the life of the relationship. The risk management and mitigation measures implemented by a capital market licensee must be commensurate with the risk profile of the customer or type of customer.

         

        Added: January 2022

      • AML-1.1.3

        For the purposes of this Module, 'customer' includes counterparties such as financial markets counterparties, except where Capital Market Licensees are acting as principals where simplified due diligence measures may apply. These simplified measures are set out in section AML-1.10.

        Amended: January 2022
        October 2010

      • AML-1.1.4

        The CBB's specific minimum standards to be followed with respect to verifying customer identity and source of funds are contained in section AML-1.2. Enhanced requirements apply under certain high-risk situations: these requirements are contained in sections AML-1.3 to AML-1.7 inclusive. Additional requirements apply where a Capital Market Licensee is relying on a professional intermediary to perform certain parts of the customer due diligence process: these are detailed in section AML-1.8. Simplified customer due diligence measures may apply in defined circumstances: these are set out in section AML-1.10.

        Amended: January 2022
        October 2010

    • Verification of Third Parties

      • AML-1.1.5

        Capital Market Licensees must obtain a signed statement, in hard copy or through digital means from all new customers confirming whether or not the customer is acting on his own behalf or not. This undertaking must be obtained prior to conducting any transactions with the customer concerned.

        Amended: January 2022
        Added: October 2010

      • AML-1.1.6

        Where a customer is acting on behalf of a third party, the Capital Market Licensees 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 Capital Market Licensees 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.

        Amended: January 2022
        Added: October 2010

      • AML-1.1.7

        Capital Market 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.

        Amended: January 2022
        Added: October 2010

      • AML-1.1.8

        Where capital market 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, Capital Market 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 Capital Market Licensee must establish the identity of that third party, as well as the person conducting the business.

        Amended: January 2022
        Added: October 2010

    • Anonymous and Nominee Accounts

      • AML-1.1.9

        Capital Market Licensees must not establish or keep anonymous accounts or accounts in fictitious names. Where Capital Market 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 Capital Market Licensees and verified by it in accordance with the requirements specified in this Chapter.

        Amended: January 2022
        Added: October 2010

    • Timing of Verification

      • AML-1.1.10

        Capital Market Licensees must not commence a business relationship or undertake a transaction with a customer before completion of the relevant customer due diligence (‘CDD’) measures specified in Chapter AML-1. Capital Market Licensees must also adopt risk management procedures with respect to the conditions under which a customer may utilise the business relationship prior to verification. 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 undertaking initial customer due diligence provided that no disbursement of funds takes place until after the requirements of this Chapter have been fully met.

        Amended: January 2022
        Added: October 2010

    • Incomplete Customer Due Diligence

      • AML-1.1.11

        Where a Capital Market Licensee is unable to comply with the requirements specified in Chapter AML-1, 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.

        Amended: January 2022
        Added: October 2010

      • AML-1.1.12

        See also Chapter AML-4, which covers the filing of Suspicious Transaction Reports.

        October 2010

      • AML-1.1.13

        The CBB will monitor the application of these requirements to Capital Market Licensees existing customer base.

        Amended: January 2022
        Added: October 2010

    • Suspicious Wallet Addresses

      • AML-1.1.14

        A crypto-asset licensee must establish and implement policies for identification of wallet addresses that are suspected of ML/TF (suspicious wallet addresses).

        Added: January 2020

      • AML-1.1.15

        A crypto-asset licensee must not establish or continue business relationship with or transact with suspicious wallet addresses referred to in Paragraph-1.1.14.

        Added: January 2020

      • AML-1.1.16

        Where a crypto-asset licensee identifies or becomes aware of a suspicious wallet address, it must immediately file a Suspicious Transaction Report (STR) and also notify the CBB.

        Added: January 2020

    • Non-Resident Accounts

      • AML-1.1.17

        Capital Market Licensees that establish a business relationship or transact or deal with non-resident customers must have documented criteria for acceptance of business with such persons. For non-resident customers, assessed as high risk, licensees must ensure the following:

        (a) Ensure there is a viable economic reason for the business relationship;
        (b) Perform enhanced due diligence where required in accordance with Paragraph AML-1.1.24;
        (c) Obtain and document the country of residence for tax purposes where relevant;
        (d) Obtain evidence of banking relationships in the country of residence;
        (e) Obtain the reasons for dealing with licensee in Bahrain;
        (f) Obtain an indicative transaction volume and/or value of incoming funds; and
        (g) Test that the persons are contactable without unreasonable delays.
        Amended: October 2023
        Added: January 2022

      • AML-1.1.18

        Capital Market Licensees must not accept non-residents customers from high risk jurisdictions subject to a call for action by FATF.

         

        Added: January 2022

      • AML-1.1.19

        Capital Market Licensees must take adequate precautions and risk mitigation measures before onboarding non-resident customers from high risk jurisdictions. The licensees must establish detailed assessments and criteria that take into consideration FATF mutual evaluations, FATF guidance, the country national risk assessments (NRAs) and other available guidance on onboarding and retaining non-resident customers from the following high-risk jurisdictions:

        (a) Jurisdictions under increased monitoring by FATF;
        (b) Countries upon which United Nations sanctions have been imposed except those referred to in Paragraph AML-1.1.18; and
        (c) Countries that are the subject of any other sanctions.

         

        Added: January 2022

      • AML-1.1.20

        Capital Market Licensees must establish systems and measures that are proportional to the risk relevant to each jurisdiction and this must be documented. Such a document must show the risks, mitigation measures for each jurisdiction and for each non-resident customer.

         

        Added: January 2022

      • AML-1.1.21

        Capital Market Licensees must establish a comprehensive documented policy and procedures describing also the tools, methodology and systems that support the licensee’s processes for:

        (a) The application of RBA;
        (b) Customer due diligence;
        (c) Ongoing transaction monitoring; and
        (d) Reporting in relation to their transactions or dealings with non-resident customers.

         

        Added: January 2022

      • AML-1.1.22

        Capital Market Licensees must ensure that only the official/government documents are accepted for the purpose of information in Subparagraphs AML-1.2.1 (a) to (f) in the case of non-resident customers.

         

        Added: January 2022

      • AML-1.1.23

        [This Paragraph has been deleted in October 2023].

        Deleted: October 2023
        Added: January 2022

      • AML-1.1.24

        Capital Market Licensees must follow the below CDD and customer onboarding requirements:

          Enhanced Due Diligence Digital Onboarding
        Bahrainis and GCC nationals (wherever they reside) and expatriates resident in Bahrain No Yes
        Others Yes Yes
        Added: October 2023