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  • AML-3.3 AML-3.3 Compliance Monitoring

    • Annual Compliance Review

      • AML-3.3.1

        Capital Market Licensees must take appropriate steps to identify and assess their money laundering and terrorist financing risks (for customers, countries or geographic areas; and products, services, transactions or delivery channels). They must document those assessments in order to be able to demonstrate their basis, keep these assessments up to date, and have appropriate mechanisms to provide risk assessment information to the CBB. The nature and extent of any assessment of money laundering and terrorist financing risks must be appropriate to the nature and size of the business.

        Amended: January 2022
        Added: July 2016

      • AML-3.3.1A

        Capital Market Licensees should always understand their money laundering and terrorist financing risks, but the CBB may determine that individual documented risk assessments are not required, if the specific risks inherent to the sector are clearly identified and understood.

        Amended: January 2022
        Added: July 2016

      • AML-3.3.1B

        A Capital Market Licensee must review the effectiveness of its AML/CFT procedures, systems and controls at least once each calendar year. The review must cover the Capital Market Licensees and its branches and subsidiaries both inside and outside the Kingdom of Bahrain. A Capital Market Licensee must monitor the implementation of those controls and enhance them if necessary. The scope of the review must include:

        (a) A report, containing the number of internal reports made in accordance with section AML-4.1, a breakdown of all the results of those internal reports and their outcomes for each segment of the Capital Market 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 AML-4.2 and, where a Capital Market 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 Capital Market Licensee's anti-money laundering procedures, systems and controls and compliance with the rules of a licensed exchange and licensed clearing house or central depository, AML Law and this Module.
        Amended: January 2022
        Amended: July 2016
        Added: October 2010

      • AML-3.3.2

        The reports listed under rule AML-3.3.1B (a) and (b) must be made by the MLRO. The sample testing and report required under rule AML-3.3.1B (c) and (d) must be made by the Capital Market Licensee's external auditors or a consultancy firm approved by the CBB.

        Amended: January 2022
        Amended: January 2020
        Amended: January 2019
        Added: October 2010

      • AML-3.3.2A

        In order for a consultancy firm to be approved by the CBB for the purposes of Paragraph AML-3.3.2, such firm should provide the CBB’s Compliance Directorate with:

        (a) A sample AML/CFT report prepared for a financial institution;
        (b) A list of other AML/CFT related work undertaken by the firm;
        (c) A list of other audit/review assignments undertaken, specifying the nature of the work done, date and name of the licensee; and
        (d) An outline of any assignment conducted for or in cooperation with an international audit firm.
        Added: January 2020

      • AML-3.3.2B

        The firm should indicate which personnel (by name) will work on the report (including, where appropriate, which individual will be the team leader) and demonstrate that all such persons have appropriate qualifications in one of the following areas:

        (a) Audit;
        (b) Accounting;
        (c) Law; or
        (d) Banking/Finance.
        Added: January 2020

      • AML-3.3.2C

        Capital Market Licensees must ensure that the personnel conducting the review are qualified, skilled and have adequate experience to conduct such a review. At least two persons working on the report (one of whom should be the team leader) must have:

        (a) A minimum of 5 years professional experience dealing with AML/CFT issues; and
        (b) Formal AML/CFT training.
        Amended: January 2022
        Added: January 2020

      • AML-3.3.2D

        Submission of a curriculum vitae for all personnel to be engaged on the report is encouraged for the purposes of evidencing the above requirements.

        Added: January 2020

      • AML-3.3.2E

        Upon receipt of the above required information, the CBB Compliance Directorate will assess the firm and communicate to it whether it meets the criteria required to be approved by the CBB for this purpose. The CBB may also request any other information it considers necessary in order to conduct the assessment.

        Added: January 2020

      • AML-3.3.3

        The reports listed under rule AML-3.3.1B must be submitted to the Capital Market Licensee's Board for it to review and commission any required remedial measures and copied to the Capital Market Licensee's senior management.

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

      • AML-3.3.4

        The purpose of the annual compliance review is to assist a Capital Market Licensee's Board and senior management to assess, amongst other things, whether internal and external reports are being made (as required under Chapter AML-4), and whether the overall number of such reports (which may otherwise appear satisfactory) does not conceal inadequate reporting in a particular segment of the Capital Market Licensee's business (or, where relevant, in particular branches or subsidiaries). Capital Market Licensees should use their judgement as to how the reports listed under rule AML-3.3.1B (a) and (b) should be broken down in order to achieve this aim (e.g. by branches, departments, product lines, etc).

        Amended: January 2022
        Amended: January 2019
        Added: October 2010

      • AML-3.3.5

        Capital Market Licensees must instruct their external auditor to produce the report referred to in rule AML-3.3.1B (c) and (d). The report must be submitted to the CBB by the 30th of June of the following year. The findings of this review must be received and acted upon by the Capital Market Licensee.

        Amended: January 2022
        Amended: January 2020
        Amended: January 2019
        Added: October 2010

      • AML-3.3.6

        [This Paragraph was deleted in January 2022].

        Deleted: January 2022
        Added: October 2010