On September 8, 2025, the Kingdom of Bahrain enacted Decree-Law No. (36) of 2025, amending certain provisions of Decree-Law No. (4) of 2001 with Respect to Prohibiting and Combating Money Laundering and Terrorism Financing. These amendments, which were endorsed by the Cabinet upon the Prime Minister’s proposal, strengthen Bahrain’s legal framework for anti-money laundering and countering the financing of terrorism (AML/CFT).
Proceeds of Crime
The amendments broaden the law’s definition of “proceeds of crime.” While the prior law defined this term to include “funds obtained, directly or indirectly, in whole or in part, through any criminal activity,” the amendments specify that it also includes “the profits, interest, returns, or other benefits derived from such funds, whether retained in their original form or converted into other assets or investments yields.” (Art. 1.)
Expanded Enforcement
While the amendments explicitly recognize the principle of “good faith” to protect individuals and entities who acquire assets without knowledge of their illicit origin (art. 4), they broaden criminal liability to explicitly cover all assets obtained through or connected to criminal activity and allow authorities to confiscate all such assets. (Art. 2(2).) Additionally, they provide that the court may investigate and address any additional assets belonging to the defendant that appear to be linked to the criminal activity if strong evidence suggests they are unlawfully obtained, and order the confiscation of all means used in committing the crime, even if the criminal case is terminated due to the death of the defendant, as long as the rights of third parties acting in good faith are safeguarded. (Art. 3(3).)
Corporate Liability and Penalties
The amendments reinforce corporate accountability by specifying that a legal entity may be held liable and subject to fines if any crime prescribed in the law is committed in its name, on its behalf, or through its representatives or partners, and that authorities may order the confiscation of assets involved in a crime, the proceeds of a crime, and the means used in committing a crime, or any assets of equivalent value, from a corporate entity. (Art. 3(4).)
Administrative Authority
Decree-Law No. (36) of 2025 expands the mandate of the Policy Committee for the Prevention and Prohibition of Money Laundering and Terrorism Finance, which was established in 2001 as an inter-ministerial body to coordinate the government’s AML/CFT policies and processes. The amendments expand the committee’s mandate to include the following:
- Risk-Based Approach: Preparing National Risk Assessments (NRAs) and evaluating the effectiveness of existing AML/CFT systems. NRAs, such as Bahrain’s 2025 NRA, are undertaken by member jurisdictions of the Financial Action Task Force (FATF) to identify and respond to money-laundering and terrorist financing risks.
- Regulations: Recommending regulations and procedures to implement UN Security Council resolutions under Chapter 7 of the UN Charter, as well as enforcing national terrorism lists and related obligations.
- Coordination: Coordinating with authorities such as the Companies Control Directorate at the Ministry of Industry and Commerce to ensure they report NRA results, manage risks, and comply with national AML/CFT strategies.
- Oversight: Overseeing coordination, cooperation, and information exchange among relevant authorities.
- Training: Developing training plans and programs for personnel in AML/CFT and related fields.
- Circulars: Issuing necessary circulars addressing gaps in AML/CFT systems in foreign countries and informing relevant authorities and institutions.
- Partnerships: Facilitating partnerships between public and private sectors to promote cooperation, raise awareness, ensure policy implementation, improve operational performance, and strengthen understanding of national risks and ways to mitigate them. (Art. 4(2).)
Decree-Law No. (36) of 2025 also addresses the responsibilities of Bahrain’s Financial Intelligence National Center (FINC). It provides that FINC may suspend or delay a financial transaction for up to 72 hours in cases where the commission of any crime specified in the law is suspected, to permit investigation of the transaction. (Art. 6(3).) FINC may also suspend or delay a transaction for up to 72 hours based solely on a request from a foreign counterpart agency concerning any crime specified in this law. (Art. 8(8).)
Prepared by Muneera Al-Khalifa, Scholar-in-Residence, under the supervision of George Sadek, Foreign Law Specialist
Law Library of Congress, November 21, 2025
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