The red flag raised 350 times: Bahrain sees spike in 'dirty money' activity

Published August 24th, 2014 - 08:28 GMT

 A spike in the number of suspicious transactions related to money laundering and terrorism financing has been recorded in Bahrain in the first half of this year, a report said.

When compared with the same period last year, authorities at the Financial Intelligence Directorate (FID) received 50 per cent more suspicious transaction reports (STRs) which are submitted by banks, money exchanges, insurance companies and the Industry and Commerce Ministry, reported the Gulf Daily News, our sister publication.

The STRs are designed to flag questionable financial activity and 354 were registered between January and June this year compared with just 237 in the first six months of last year.

Officials from the FID, which was founded in 2001 as the Anti-Money Laundering Unit, work in tandem with the Central Bank of Bahrain (CBB) and other government agencies in a bid to crack down on dubious financial dealings.

'Bahrain's prime location and its attractiveness to investors have led to a lot of criminals worldwide laundering their money here,' said FID director Shaikha Mai bint Mohammed Al Khalifa in a statement.

'Bahrain is the first country within the GCC to issue a decree to combat money laundering and terrorist financing.

'Under this decree, the financial intelligence unit (now directorate) was founded '“ the purpose of which is to combat money laundering and to serve as a national centre for the receipt and analysis of STRs and other information relevant to money laundering, terrorist financing and associated offences.'

Statistics in the FID's annual report  published last week show that of 647 STRs recorded last year, 226 were reported by banks and related to cash or cheque deposits and remittances, 243 were put forward by the Industry and Commerce Ministry and related to the buying, selling and exchange of gold and motor vehicles, 169 cases came from money exchange companies and nine STRs were made by insurance companies.

Teams at the FID routinely analyse such suspicious financial transactions to discover if the source of funds for the payments made is coming from illegal activities such as drug trafficking, terrorism or other crimes.

Last year, they received 42 requests from countries as far afield as India, Afghanistan, Indonesia and Russia to investigate cases of money laundering related to people or companies in Bahrain. In response, the directorate made 96 requests for assistance to countries such as Qatar, the UK, Saudi Arabia and the US to help in their investigations, according to the latest report.

Last year, authorities arrested 16 Indian men who were accused of being part of one of the biggest money laundering rings ever to operate in Bahrain.

According to information provided by the CBB, the men used an exchange company to illegally transfer SR 400 million ($106.6 million) overseas '“ which had allegedly been brought into Bahrain via King Fahad Causeway.

A verdict is due in the case on Monday. 

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