Bahrain

Global sanctions guide

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  1. Does Bahrain have a sanctions regime in place?

Yes. However, details of the regime are not public and sanctions are imposed on a discretionary basis.

  1. Does Bahrain implement UN sanctions?

Bahrain has implemented UNSC Resolution 1373 (2001) concerning counter-terrorism. Pursuant to this Resolution, the Central Bank of Bahrain (the “CBB”) has promulgated Amiri Decree Law No. 4 of 2001 with respect to the Prevention and Prohibition of the Laundering of Money (the “AML Decree”).

  1. Does Bahrain implement an autonomous sanctions regime?

Yes.

  1. What is the nature of the sanctions regime in Bahrain?

Although Bahrain entered into a free trade agreement with the USA in 2006, the previously-imposed Israeli products boycott remains in place pursuant to Law No. 5 of 1963, Organising Israel Boycott Office in Bahrain and Dependencies (the “Boycott Law”).

In practice, the Customs Department in Bahrain exercises an “unofficial” enforcement of the boycott if it becomes aware of any Israeli-manufactured items imported into Bahrain (as evidenced by a certificate of origin submitted to the Customs Directorate for the purpose of clearing and payment of customs duty).

The CBB penalises any licensees which breach the AML Decree.

  1. Does Bahrain maintain a list of sanctioned individuals and entities?

It is likely that Bahrain maintains a list of sanctioned individuals and entities. However, this information is not publically available.

  1. Are there any other lists related to sanctions?

N/A.

  1. Does Bahrain have a licensing or authorisation system in place?

Yes. Bahrain has licensing regimes in place and authorisations originate from the concerned licensing authorities (e.g. the Customs Directorate, the Ministry of Industry and Commerce, the Bahraini Chamber of Commerce and Industry, etc.). Such authorities have broad discretion to reject or limit authorisations.

There is also a special permit mechanism for approval to import products originating from Israel. However, we are not aware of any such permit having been issued.

  1. What are the consequences for a breach of sanctions in Bahrain?

Products originating from Israel which are clearly marked as “made in Israel” will not be cleared for import into Bahrain.

The Boycott Law imposes a non-specified penalty for non-smuggling offences (e.g. submitting false import documentation). As well, the Boycott Law imposes a prison term of 3-10 years for violations of Articles 2, 3, and 4 as well as a penalty of 10,000 Rupees (being the Bahraini currency at the time). The amount in Bahraini Dinars today is unclear.

CBB licensees breaching the AML Decree and individuals breaching Article 3 of the AML Decree would be penalised as follows:

  • any person committing, attempting or participating in a money laundering offence shall be liable to imprisonment for a period not exceeding 7 years and a fine not exceeding 1,000,000 BD;
  • for any of the following offences, imprisonment for not less than 5 years and fine of not less than 100,000 BD:

(a) the accused has committed the offence through an organised criminal network;

(b) the accused has committed the offence by using his power or influence through an institution; or

(c) the accused has committed the offence for the purpose of disguising the source of proceeds which are derived from criminal activity to appear as of a lawful source; and

  • property which is the subject matter of the offence will be confiscated.

If the offence is committed by a corporate entity, responsible employee(s) may be penalised as set out above.

Individuals who commit any of the offences relating to money laundering shall be liable to imprisonment for a period not exceeding 2 years and/or a fine not exceeding 50,000 BD.  In the case of individuals, the term of imprisonment may be reduced to a period not exceeding 3 months and/or a fine not exceeding 20,000 BD.

  1. Who are the relevant regulators in Bahrain and what are their contact details?

The Central Bank of Bahrain is responsible for applying and enforcing anti-money laundering and counter terrorist financing laws.

Building No. 96
Road No. 170
Diplomatic Area 317
P.O. Box 27
Manama
Kingdom of Bahrain

T: (+973) 1754 7777
F: (+973) 1753 0399
www.cbb.gov.bh

The Ministry of Interior is responsible for customs and export controls.

Customs Affairs
P.O. Box 15
Manama
Kingdom of Bahrain

T: (+973) 1753 59808
F: (+973) 1791 0245
www.bahraincustoms.gov.bh

Contributor law firm

Ali Asghar Sheikh, ASAR - Al Ruwayeh & Partners, P.O.BOX 20517, Manama, Kingdom of Bahrain

T: (+973) 17 533 182/3
F: (+973) 17 533 185
asheikh@asarlegal.com
http://www.asarlegal.com/en/