Many assume a FATF evaluation is a government-only exercise. It is not. While FATF does not assess individual firms, it evaluates whether regulated entities understand risk, meet obligations, and implement controls effectively in practice, not just on paper. With Bahrain approaching its first Mutual Evaluation in nearly a decade, private-sector preparedness will be a decisive factor for national outcomes, investor confidence, and international trust.

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What You’ll Learn

What a FATF evaluation actually measures

FATF assesses countries using two pillars: Technical Compliance (laws, regulations, institutions, procedures aligned to the 40 Recommendations) and Effectiveness (how well the system works in practice across 11 Immediate Outcomes).

What is at stake for Bahrain’s economy and reputation

A strong outcome signals credibility to investors, global banks, and international partners. Weak outcomes, including grey-listing, can increase due diligence, raise compliance costs, and reduce capital inflows.

What changes in the 5th round and why private sector evidence matters

Assessors will look for outcome-proof over policy, embedded risk-based controls, beneficial ownership verification in practice, STR quality that supports investigations, and functioning sanctions and proliferation-financing controls.

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What’s Inside the Briefing Note

• ‍FATF Mutual Evaluation explained: what “technical compliance” and “effectiveness” mean in practice

• ‍What’s on the line: why outcomes influence confidence, correspondent banking, and investment perceptions ‍
• Global lessons:‍
  
  • Malta: how weak implementation can undermine strong laws
  • Morocco: how private-sector engagement can accelerate improvement and exit from increased monitoring ‍
    
• Bahrain’s starting point: 2018 Mutual Evaluation and 2022 follow-up progress, including remaining challenges FATF highlighted ‍
• National readiness updates: 2025 Decree-Law No. 36 of 2025, the National AML/CFT/CPF Strategy (2025–2027), and strengthened supervision ‍
• National Risk Assessment takeaways: where threats and vulnerabilities concentrate and what sectors are rated higher risk
• ‍Practical preparation guidance: what regulated companies should do now across risk, controls, governance, engagement, and training ‍
• AMAN readiness checklist: free self-assessment checklist and optional support to review results and gaps

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Why This Matters for Bahrain’s Private Sector

FATF evaluates whether AML/CFT measures work across the whole system. That means regulated firms form part of the evidence base: how risks are identified, how beneficial ownership is verified and used, how suspicious activity is escalated and reported, and how controls perform consistently over time. Private-sector readiness can materially influence national outcomes and reduce friction from elevated country-risk perceptions.