Bahrain

3. Does Bahrain implement an autonomous sanctions regime?

Yes.

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

While public access to Bahrain’s sanctions regime and list of sanctioned individuals and entities is restricted, the CBB, the authority responsible for issuing directives and regulations against money laundering (AML) and to combat the financing of terrorism (CFT) from time to time moves certain individuals and organizations to an AML/CFT blacklist, which is circulated through the financial sector. Bahrain is also a member of the OECD Financial Action Taskforce (FATF) and is a founding member of the MENA-FATF.

Additionally, an Israeli products boycott formally remains in place via Law No. 5 of 1963, Organising Israel Boycott Office in Bahrain and Dependencies (the “Boycott Law”), and the Customs Department in Bahrain may still exercise an enforcement of the boycott if it becomes aware of any Israeli-manufactured items imported into Bahrain without a prior permit. Please note however that in 2004, Bahrain entered into the United States-Bahrain Free Trade Agreement ("USBFTA"), and in September 2020 Bahrain further normalized its relations with Israel by endorsing the Abraham Accords: Declaration of Peace, Cooperation, and Constructive Diplomatic and Friendly Relations with the US and Israeli governments, alongside the UAE. As such, the future enforceability of Israeli boycotts or sanctions remains uncertain.

Since the 5 June 2017, Bahrain imposed sanctions and restrictions against the state of Qatar, its government, certain Qatari companies and Qatari citizens and residents. This included the withdrawal of air, land and sea links pursuant to a resolution by the Minister of Interior prohibiting Bahraini citizens from residence, travel or passing through the state of Qatar.

On 5 January 2021 at the Gulf Co-operation Summit, Bahrain formally agreed to end the embargo and aforementioned restrictions that have been imposed on Qatar since June 2017. Following this agreement, Bahrain will re-open its air and sea links with Qatar.

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

It is likely that Bahrain maintains a list of sanctioned individuals and entities, as well as the AML/CFT blacklist.

6. Are there any other lists related to sanctions?

N/A.

7. Does Bahrain have a licensing or authorization system in place?

Yes. Bahrain has licensing regimes in place and authorizations originate from the concerned licensing authorities (eg 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 authorizations.

There is also a special permit mechanism for approval by the Ministry of Interior to import products originating from Israel.

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

The Boycott Law imposes a non-specified penalty for non-smuggling offenses (eg submitting false import documentation). As well, the Boycott Law imposes a prison term of three to ten 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).

CBB licensees who breach the AML Decree and individuals who breach Article 3 of the AML Decree would be penalized as follows:

• any person committing, attempting or participating in a money laundering offense shall be liable to imprisonment for a period not exceeding seven years and a fine not exceeding 1,000,000 BD

• for any of the following offenses, imprisonment for not less than five years and fine of not less than 100,000 BD: (a) the accused has committed the offense through an organized criminal network (b) the accused has committed the offense by using his power or influence through an institution (c) the accused has committed the offense for the purpose of disguising the source of proceeds which are derived from criminal activity to appear as of a lawful source

• property which is the subject matter of the offense will be confiscated

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

Individuals who commit any of the offenses relating to money laundering shall be liable to imprisonment for a period not exceeding two 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 three months and/or a fine not exceeding 20,000 BD.

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