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| WHAT
IS MONEY LAUNDERING ? |
Money
laundering is a global phenomenon that affects all countries
in varying degrees. For the purposes of these Regulations
“money laundering” is defined as the process
by which criminals attempt to conceal the true origin
and ownership of the proceeds of their criminal activities.
If undertaken successfully, it also allows the perpetrator(s)
to maintain control of those proceeds and, ultimately,
provides a legitimate cover for their source of income.
There
are three stages to the money laundering process:
Placement
- is the physical disposal of cash proceeds derived
from illegal activity.
Layering
- is the process of separating illicit proceeds from
their source by creating complex layers of financial
transactions designed to disguise the audit trail and
provide anonymity.
Integration
- is the provision of apparent legitimacy to criminally
derived wealth. If the layering process has succeeded,
integration schemes place the laundered proceeds back
into the economy in such a way that they re-enter the
financial system and appear to be normal business funds. |
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| HOW
CAN A PERSON BE COMMITTED THE OFFENCE OF MONEY LAUNDERING
? |
Any
person who have committed any of the following acts
for the purpose of showing that the source of the property
is lawful, knowing or believing or having reason to
know or believe that such property is derived from criminal
activity or from an act of participation in criminal
activity shall have committed the offence of money laundering:
Conducting
a transaction with the proceeds of crime.
The
concealment or disguise of the nature, source, location,
disposition, movement, rights with respect of, in or
over, or ownership of the proceeds of crime
The
acquisition or receipt or transfer of the proceeds of
crime.
The
retention or possession of the proceeds of crime.
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| HOW
CAN A PERSON BE A PARTICIPANT OF THE OFFENCE OF MONEY
LAUNDERING ? |
Any
of the following acts shall be deemed to be an act of
participation in the offence of money laundering :
Destruction,
misappropriation, concealment or forgery of any document
which could be used as evidence in the offence or
against the accused
Knowledge
of the intent of any person who commits the offence,
and provision of any facilities or information which
may assist such person to conceal the offence or escape
from prosecution.
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WHAT
ARE THE PUNISHMENTS RELATED TO THE MONEY LAUNDERING
OFFENCE ? |
Any
person committing, attempting or participating in a
money laundering offence shall be liable to imprisonment
for a period not exceeding Seven (7) years and a fine
not exceeding Bahrain Dinars One Million (BD. 1,000,000)
(US $2.65 Million).
Any person who commits any of the offences related to
the offence of money laundering shall be liable to imprisonment
for a period not exceeding Two (2) years and /or a fine
not exceeding Bahrain Dinars Fifty Thousands (BD 50,000)
( US $132,626).
A
person convicted of the offence of money laundering
shall in addition to the punishment prescribed, be liable
to confiscation or property which is the subject matter
of the offence, or any other property owned by him or
by his spouse or his minor children, equivalent in value
to the property which is subject matter of the offence.
A
person can be punished for the offence of money laundering
even if he is not convicted in the underlying criminal
activity.
A
person can be separately charged and convicted of both
a money laundering offence and of an offence constituted
by an underlying criminal activity from which the property
or the proceeds, in respect of which he is charged with
money laundering, were derived.
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| WHAT
IS REQUIRED FROM THE FINANCIAL INSTITUTIONS IN ORDER TO
COMPLY WITH THE ANTI-MONEY LAUNDERING LAW ? |
Keep
for a period not less than five (5) years a copy of
the evidence of identity of each client .
Keep a transaction record of any new or unrelated transaction
for a period not less than five (5) years after the
termination of the transaction so recorded.
Report
to the Enforcement Unit and the relevant entities
any transactions suspected by the relevant officer
by reason of the identity of the persons involved,
the nature of the transaction or any other circumstances
(using the STR).
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| WHAT
IS FATF ? |
The
Financial Action Task Force on Money Laundering (FATF)
is an inter-governmental body whose purpose is the development
and promotion of policies to combat money laundering
-- the processing of criminal proceeds in order to disguise
their illegal origin. These policies aim to prevent
such proceeds from being utilized in future criminal
activities and from affecting legitimate economic activities.
The FATF currently consists of 29 countries and two
international organizations. Bahrain is an active member
of the FATF through the GCC The FATF originally issued
the Forty Recommendations (FR) in 1990, and these were
then revised in 1996 to include coverage of new and
evolving methods of money-laundering, and again in 2001
the FR were extended to cover the issue of terrorist
financing by the creation of Eight Special Recommendations
on Terrorist Financing.
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