Bahrain Accuses Activists of Terror, Subversion .

Bahrain accused 23 Shiite activists, including political leaders and prominent clerics, of promoting terrorism and plotting to overthrow the monarchy, a move expected to add to sectarian tensions ahead of elections in the small Gulf Arab nation.

The accusations come after a wave of arrests last month of members of the country's majority Shiite community, which has long complained of discrimination by Bahrain's Sunni leadership, despite political overhauls ushered in by King Hamad bin Isa al Khalifa. Activists say the arrests and charges against respected leaders of the community could further alienate disaffected Shiites.

Bahrain's experiment with limited democracy is often viewed as a barometer of political and sectarian tensions in the wider region, where Sunni regimes fear an expansionistic Iran and the growing clout of Shiites in Middle East affairs. Saudi Arabia, in particular, fears that instability among Bahrain's Shiites could prove a trigger point for that country's own restive Shiite minority, who live close to Bahrain in Saudi Arabia's main oil-producing region.

Bahrain is home to the U.S. Fifth Fleet, which is responsible for U.S. naval forces in the Mideast and off the coast of East Africa. Political unrest is unlikely to affect the status of the base.

On Saturday, state prosecutors announced charges against 23 men, including the heads of two splinter political groups and prominent Shiite clerics, including plotting against the king, terrorist financing, arson and sabotage.

"This sophisticated terrorist network with operations inside and outside Bahrain has undertaken and planned a systematic and layered campaign of violence and subversion aimed squarely at undermining the national security of Bahrain," said Abdulrahman al Sayed, an official at the Public Prosecutors office, in a statement.

Lawyers for the charged men weren't available for comment.

The Bahraini authorities have issued a gag order on local media about the case. They also recently banned opposition websites in the kingdom, including the site run by largest Shiite political organization in Bahrain, the Islamic National Accord Association, known as al Wefaq, which controls 17 of the 40 seats in the lower house of parliament.

In the 1990s, Bahrain, an island city-state, was plagued by widespread civil unrest by Shiites fighting Sunni-dominated security forces. Tensions calmed after King Hamad took over in 1999, instituted constitutional changes and allowed Shiite political organizations to participate in elections for the lower house of parliament, which helps shape laws in conjunction with a second body whose members are handpicked by the king.

Local human-rights activists said the crackdown was part of a wider strategy by the government to undermine an increasingly effective political opposition ahead of national elections scheduled for Oct. 23.

"The opposition is divided between participation and opposing participation in the vote. When you arrest one side of the debate, it makes it harder for the other supporters to vote without appearing to be puppets of the regime," said Nabeel Rajab, the vice president of the Bahrain Center for Human Rights, whose website has been banned in the kingdom.

On Sunday, King Hamad said in a national address that the recent arrests were necessary for national security and didn't signal a reversal of civil rights.

The government has released few details about the alleged terrorist network, and Western diplomats based in Bahrain said they didn't know what evidence the government had to support the charges.

The crackdown began with the Aug. 13 arrest of Abduljalil Al-Singace when he returned from a trip to London. Mr. Singace, named by prosecutors as a leader of the alleged terrorist network, and most of the 23 men charged with terrorism offenses, are members of Haq, or the Movement of Liberties and Democracy, a splinter group of al Wefaq.

Late-night clashes between security forces and young Shiite protesters, many of whom are unemployed and affiliated with Haq, are a frequent occurrence in Bahrain. Security forces face gangs burning tires and armed with crude Molotov cocktails.

Haq leaders said last month that they would boycott the upcoming October elections, as they did with polls held in 2006.

Last month, al Wefaq leader Sheikh Ali Salman warned that the uptick in arrests among Shiites would lead to more protests.

Colleagues of the men charged with terrorism go a step further, saying that the arrests will strengthen the extremist edge of the Shiite opposition movement. "Calling [the detained leaders] terrorists, this is something that no one believes here in Bahrain. This move shows that government does not tolerate any opposition," says Mr. Rajab, the activist. "This branch of opposition, those outside the mainstream, will now become stronger."

Write to Margaret Coker at margaret.coker@wsj.com

Source: The Wall Street Journal

Bahrain’s anti-terror efforts lauded

Bahrain has efficiently worked to combat the financing of terrorism and boosted its border patrol capabilities, contributed manpower to international anti-terror operations, said a report.

Bahrain also conducted successful court trials under its anti-terror act, added an annual report issued by the anti-terror liaison office in the US State Department.

It confirmed that Bahrain worked successfully to combat financing of terrorism and hosted the general-secretariat of the Finance Task Force. Bahrain also liaised with its banks regarding cases of money laundering and financing of terror.

The report said Bahrain, since it ratified the international anti-nuclear terrorism initiative in March 2008, has expanded its aviation and marine patrol, increased the number of checkpoints, conducted more drills for internal co-ordination and stationed more border patrol officers capable of identifying nuclear proliferation-related substances such as centrifuges and commercially-banned components.

The report praised the Justice, Islamic Affairs and Endowments Ministry for exerting persistent efforts to combat radicalism and extremism.

The ministry organised forums and workshops for imams and also expanded its scholarships programme and finalised its annual revising of religious education curricula for its schools to update the interpretation of Islamic texts, the report added.

Source: TradeArabia News Service

Libya's Membership Application To MENAFATF Approved

Members of the anti-money laundering and anti-terrorist financing organization, the Middle East and North Africa Financial Action Task Force, or MENAFATF, approved Libya's membership application Tuesday, MENAFATF President Abdulrahim Al Awadi said.

"The plenary of 17 members approved the application of Libya to be a member and the application of the World Customs Organization to be an observer member," Al Awadi told reporters in Fujeirah, United Arab Emirates.

Libya will become the 18th member state of the organization, which was set up in November 2004 and includes Saudi Arabia, Bahrain, Oman, Sudan, Iraq and Egypt. The U.S., U.K., France and Spain are observer members, as well as the International Monetary Fund and the World Bank. The U.A.E. currently holds the presidency.

The U.A.E., which is keen to expand membership, also proposed that Djbouti, Comoros Islands, Seychelles and Maldives become members. The proposal is still being studied by member states.

Al Awadi added that the taskforce will meet next in Bahrain, which takes over the presidency of the organization in May 2009.

He also said that the global credit crisis won't draw attention away from fighting money laundering and terrorist financing.

"Members reiterate the financial crisis should not affect progress and, on the contrary, will add resolve to progress," Al Awadi said.

Source: Zawya

Is Terrorist Funding Adapting to Post-9/11 Laws?

Terrorist networks are adapting their financing methods to circumvent new anti-terror laws passed after 9/11, say Michael Jacobson and Matthew Levitt of the Washington Institute for Near East Policy. Both are also former officials with the Treasury Department's Office of Terrorism and Financial Intelligence. In their report released this month, The Money Trail: Finding, Following, and Freezing Terrorist Finances (CLICK TO DOWNLOAD), the pair argue that terrorist networks like Al Qaeda are increasingly relying on criminal operations, private donations, and informal transfers of cash to avoid the extensive methods of electronic surveillance enacted after 9/11.

The report was discussed in a Sunday RFE/RL interview with Jacobson, who was also a counsel on the 9/11 Commission. (Levitt wrote a concise summary of the report in his Counterterrorism Blog last week.) He warns:

"[I]n that period after 9/11, when there was greater international willingness and cooperation on counterterrorism, a lot of countries took steps to improve their own capabilities. As you've gotten further away from 9/11 – as the threat seems less clear, and along with some specific feelings in foreign governments and in the private sector wondering about the importance of combating terrorist financing – I think you've seen the international effort slipping.

[...]

That's one of the ironies of the success since 9/11. You've seen as the United States and the Europeans and other governments have cracked down on the use of the formal financial system of banks, you've seen a shift away from banks to terrorists using cash, to terrorists using cash couriers, to terrorists using Hawala and other informal financial-transfer mechanisms."

One interesting point raised was the idea that some countries are "passive supporters" of Al Qaeda. Iran, for instance, actively supports Hezbollah and Hamas, but maintains a mistrustful tolerance of Al Qaeda:

"Iran has a very tenuous relationship with Al-Qaeda. It is a balancing act for them. They do not trust each other. They do not really like each other. But I think, at times, enemies of the United States can find things to agree on. And so I think even before 9/11 you've actually seen Iran let Al-Qaeda members go through Iran on the way to Afghanistan and Pakistan and not stamp their passports so they wouldn't have a record of going into Afghanistan and Pakistan."

Additionally, on top of the lucrative opium trade in Afghanistan, terrorists are beginning to use other criminal means to raise money for operations. For example, the cell in Madrid responsible for the 2004 train bombings raised most of their money by selling hashish, while one of the UK cells behind the 7/7 attacks acquired part of their funding by defaulting on a bank loan. Well, what about the efficacy of freezing financial assets?:

"This is one of the misunderstood areas of terrorist financing, where the public and the media tend to view the public designations, the public blacklisting and the freezing as the sum total of what is being done in the terrorist financing area. To use that as the metric, I think, is misleading. It has to be coupled with a really aggressive and effective intelligence – a 'following the money approach.'

One of the difficulties the U.S. has encountered in this area has been in terms of the Gulf countries where they have made a lot of improvements since 9/11 but where a lot of improvements still could be made. There are a few problems in this area. One of them is that a few of the Gulf countries – like the United Arab Emirates and Qatar and Bahrain – are very focused on trying to make themselves international financial centers. Obviously, in that respect, it is very important to draw in capital from around the world and be an attractive place for money to come. But at the same time, you've got to make sure that the money coming in is clean and that you've put adequate controls in place to regulate. So I think that has been a hard balance to strike in the Gulf."

Jacobson also echoed what CIA Director General Michael Hayden stressed last week in a speech at the Atlantic Council: Al Qaeda has constantly been on the run since the Taliban were toppled in Afghanistan and now spends much of its resources strictly on securing the safety of its leadership. As such, "a lot of the cells, for example in the United Kingdom and elsewhere, have been raising the funds themselves at this point. So you really have seen a shift from central control of the funding for terrorist cells and terrorist plots."

In a recent piece for the New Atlanticist, my colleague James Joyner discussed Hayden's remarks on the recurring trend of Al Qaeda establishing a base in a country, being chased out, and reconstituting elsewhere. Under the Taliban's Afghanistan, Al Qaeda's fundraising activities were definitely more centralized than they are now. However, it would be very interesting to look at whether the organization's financing methods in the transitional period between Yemen and Afghanistan mimic its present methods. If parallels do indeed exist, it would seem that this knowledge could be used to improve laws aimed at stopping terror funding.

Jacobson states:

"[T]he reality is that if you don't know what you are looking for – if you don't understand terrorist financing – then you are not going to stop it. One of the things we recommend, now that they have this good rules-based structure in place, is that they have got to shift to more of a risk-based structure. You've got to figure out whether countries are actually stopping it. That would be an important shift."

Knowing what to look for may be half the battle.

Peter Cassata is an assistant editor with the Atlantic Council. Photo credit: Popsci.com.

Source: ACUS

Bahrain to Issue New Bills on March 17

The Central Bank of Bahrain, which has already received 300 million Bahraini dinars worth of all-new-look currency notes, will issue the first of the new currency through the monetary supply chain starting tomorrow, a senior official at the central bank said yesterday.

Dr. Abdul Rahman Saif, executive director banking operations, at the CBB told a Press conference that the CBB had new currency notes worth 300 million Bahraini dinars and the new notes contained security features. The CBB official dismissed speculations behind the CBB move to issue new notes and said that the issuance of new currency was in line with new law changing Bahrain Monetary Agency (BMA) into Central Bank of Bahrain (CBB).

Bahrain as the regional financial centre, Dr. Saif said, has implemented the highest standards of transparency backed by a stringent regulatory regime making it impossible for counterfeit or money laundering businesses.

He added: "Bahrain has never witnessed any major operation of money laundering and obviously the new currency notes with six security features will minimize the chances of counterfeit money business. The latest security features used in new currency has made the Bahraini Dinars the first in the GCC to have those features including for the blind or brail users."

He also announced that new Bahrain banknotes in all denominations will come into circulation from tomorrow.

The new banknotes are being issued in the existing denominations of 20, 10, 5, 1 and BD1/2. No change is being made to the coins in circulation.

The existing banknotes will remain a legal tender until further notice from the CBB. The new banknotes and the existing banknotes will co-circulate for a period of time, to allow for all existing banknotes to be returned to the CBB in the normal course of business. Earlier, the CBB began working with Bahrain's retail banks to coordinate the process of introducing the new banknotes, to enable banks to prepare automated teller machines (ATMs) to begin dispensing the new banknotes from 12.01 a.m. tomorrow.

All five denominations of banknotes are of uniform size (measuring 154mm x 74mm), which is slightly larger than the existing banknotes.

"The change to the new currency was necessitated by the enactment of the Central Bank of Bahrain and Financial Institutions Law (CBB Law) in September 2006," said Dr. Saif.

"The new currency reflects this significant change and each denomination of new banknotes bears the name of the Central Bank of Bahrain."

He stressed that the existing currency will remain a legal tender for a period of time and until further notice from the CBB.

"People do not need to rush out and exchange existing currency for the new. The existing banknotes will continue to be accepted as money for at least one year, and they will remain redeemable by the CBB for a further period of time after being withdrawn from circulation," he said.

"The new banknotes also incorporate enhancements to the security features, as well as some new features. This is designed to make the new currency easier to authenticate, harder to duplicate and more secure than ever before," said Dr. Saif.

In addition to the security features, the new banknotes also incorporate, for the first time, a feature to enable the visually-impaired to easily recognize the value of each note. The feature comprises a series of short, raised lines, which appear at the top right on the front face of the note. The BD1/2 has one line; BD1 has two lines and so on, up to BD20, with five lines.

"The CBB has been working with Bahrain's retail banks, money changers and other relevant Government and private organizations, to ensure a smooth and efficient changeover to the new banknotes," said Dr. Saif.

A CBB helpline will also be activated tomorrow, to receive any inquiries regarding the new banknotes. The CBB helpline numbers are 17547700 and 17547707, 17547711 and 17547703.

http://www.amlosphere.com/asia/legislation/bahrain-to-issue-new-bills-on-march-17.html

BisB arranges special awareness sessions on AML

As part of its endeavor to enhance transparency and to share collective
efforts to prevent money laundering worldwide, the Bahrain Islamic Bank (BisB),
in conjunction with the Bahrain Financial Services Training Centre (BFST), has
recently arranged special sessions on this subject.

The Bank's Assistant General Manager of Human Resources & Services, Abdul Aziz Ashoor has said: 'These special sessions demonstrate the Bank's firmed belief in the importance of anti money laundering and the consequences of such operations in terms of Islamic Sharia'a, and the Bank's proactive processes to eliminate any such incidents.'

'These sessions are intended to emphasize the Bank's prudence towards such operations and its insistence on keeping the Bank's staff in particular and stakeholders in general away from any insecure or suspected transactions,' he added.

Mr. Ashoor explained that the contents of the sessions included detailed presentations on money laundering, the due diligence required to quickly discover such operations and how to understand your customers and business partners and their sources of income. The sessions also covered reporting of suspected dealings and how laundered money is used in financing various terrorist activities.

He continued: 'It is recognized worldwide that banks must take every possible action to prevent and report such activities. Our Bank's staffs are well trained on how to handle suspects and on how to subject financial systems to the Islamic Sharia'a rules and regulations.'

Mr. Abdul Aziz Ashoor the Bank's Assistant General Manager of Human Resources & Services concluded 'In Bahrain, we are fully aware of the illegal processes taking place worldwide. Under the policy of the Central Bank of Bahrain (CBB), all banks are required to provide training on anti money laundering to all their staff members.'

The training sessions which were attended by a large number of the Bank's staff, including top and middle management, were facilitated by Mr. Hussam Al Abed, Consultant of Anti Money Crimes and Anti Money Laundering, at Jordan's Banking Association. He is also a prominent member of the Advisory Board of the Association of Certified Anti Money Laundering Specialists (ACAMS).

http://www.ameinfo.com/156511.html

BIsB move to curb money laundering

MANAMA: Bahrain Islamic Bank (BIsB) conducted special sessions aimed at preventing money laundering.

The sessions were held in co-ordination with the Bahrain Financial Services Training Centre (BFST).

The bank's human resources and services assistant general manager Abdul Aziz Ashoor said these special sessions show the bank's keenness to combat money laundering and promote Sharia-compliant transactions.

Mr Ashoor said the sessions included presentations on money laundering, the due diligence required to quickly discover such operations and how to understand your customers and business partners and their sources of income.

The sessions also covered reporting of suspected dealings and how laundered money is used in financing various terrorist activities.

"It is recognised worldwide that banks must take every possible action to prevent and report such activities. Our bank's staffs are well trained on how to handle suspects and on how to subject financial systems to Sharia rules and regulations," he said. "In Bahrain, we are fully aware of the illegal processes taking place worldwide. Under the policy of the Central Bank of Bahrain, all banks are required to provide training on anti money laundering to all their staff members."

http://www.amlosphere.com/asia/aml/bisb-move-to-curb-money-laundering.html

US hails Bahrain's anti-terror battle

AMLOSPHERE- Bahrain is actively monitoring terrorist suspects, but its ability to detain and prosecute them is sometimes hampered by the country's legal constraints, according to a US Department of State report.

The report for 2007 released by the office of the co-ordinator for counterterrorism highlights Bahrain's use of its new 2006 counter terrorism law with which it was able to track down and arrest a Bahraini in August last year.

The questioning of the man and the investigation led to the arrest of several others.

According to the report, the men were charged with membership in a terrorist organisation, undergoing terrorist training, facilitating the travel of others abroad to receive terrorist training, and financing terrorism.

The report also highlighted the US decision to impose sanctions on Bahrain-based Future Bank.

The US moved against the bank because it claims one of its shareholders, the Iranian Bank Melli, supported terrorism by investing in Iran's nuclear programme.

The Bahrain report was part of a larger document on terrorism for the Middle East and North Africa.

The US Department of State report concludes that most governments in the region had co-operated with the US in counterterrorism activities and had made efforts to strengthen their capabilities to fight the war on terror.

"These efforts included participation in USG-sponsored anti-terrorism assistance (ATA) programmes and taking steps to bolster banking and legal regimes to combat terrorist financing," it said.

"Many countries continued to provide some form of assistance to coalition efforts to bring peace and stability to Iraq and Afghanistan."

Al Qaeda and associated networks were highlighted as the greatest terrorist threats to the US and its partners in 2007.

"It (Al Qaeda) has reconstituted some of its pre-9/11 operational capabilities through the exploitation of Pakistan's Federally Administered Tribal Areas (Fata), replacement of captured or killed operational lieutenants, and the restoration of some central control by its top leadership, in particular Ayman Al Zawahiri," stated the report.

"Although Osama bin Laden remained the group's ideological figurehead, Zawahiri has emerged as its strategic and operational planner."

The US report claims that state sponsorship of terrorism, particularly by Iran, had continued to undermine efforts to eliminate terrorism.

It said an important element of Iranian national security strategy was its ability to conduct terrorist operations abroad.

"Iranian leaders believe this capability helps safeguard the regime by deterring US or Israeli attacks, distracting and weakening the US, enhancing Iran's regional influence through intimidation, and helping to drive the US from the Middle East," it said.

"Hizbollah, a designated foreign terrorist organisation, is key to Iran's terrorism strategy."

According to the report, there have been several achievements in defeating terrorism, including the capture or killing of key terrorist leaders in Pakistan, Ethiopia, Iraq, and the Philippines.

It urged governments, multilateral institutions, business organisations, private citizens and organisations to work together to defeat violent extremism.

"Where governments co-operate, build trusted networks, seek active, informed support from their people, provide responsive, effective, and legitimate governance, and engage closely with the international community, the threat from terrorism has been significantly reduced," stated the report.

"Where governments have lacked commitment in working with their neighbours and engaging the support of their citizens, terrorism and the instability and conflict that terrorists exploit, have remained key sources of threat."

http://www.amlosphere.com/off-shore/cft/us-hails-bahrains-anti-terror-battle.html

Bahrain: Cash laundered 'through ports'

By Soman Baby

A number of Gulf ports are being used for trade-based money laundering, experts said yesterday. Under or over-invoicing of goods can take place at intermediary ports in the Gulf while re-exporting goods to the final destination, said International Chamber of Commerce's (ICC) Bahrain Trade Finance Forum chairman Pradeep Taneja.

Mr Taneja, who was speaking at a seminar on trade-based money laundering, did not specify which ports in the Gulf were being used for such activities.

"Several invoices issued and routed through various financial institutions lead to multiple payments for the same goods," he said.

The seminar was organised by the forum at the Bahrain Chamber of Commerce and Industry (BCCI), in Manama.

It was aimed to increase awareness of various stakeholders in international trade finance about trade-based money laundering, said ICC Bahrain chairman Ebrahim Zainal.

"Most bankers feel that they deal in documents and not in goods," he said.

"But this is not the real case in today's complex world, where money laundering, compliance and due diligence have become issues of concern.

"It is important to understand if the presentation under a Documentary Credit is a fraudulent one aimed to abuse the banking system to siphon off money against a cargo which is non-existent.

"Also, it is essential to know if the money is diverted for tax evasion, terrorist funding or the like."

Banks take millions of dollars worth of decisions based on documents, but these documents can be forged, said Mr Zainal.

"It is vital for banks, exporters and importers alike to be aware as to how the abuse of trade finance system has increasingly become attractive to the money launders," he added.

There have been several cases of misrepresentation of quality and type of goods and services, said Mr Taneja.

"Shipping and customs documents may differ from what is actually shipped," he added.

Mr Taneja stressed the need for increasing awareness on trade-based money laundering through training, international co-operation and information sharing amongst competent authorities.

Forum secretary Mohammed Essa Al Gassab said that money laundering was a process by which criminals attempt to hide the true origin and ownership of the proceeds of their criminal activities.

"The term money laundering is also used in relation to the financing of terrorist activity where funds may, or may not, originate from crime," he said.

"Bahrain's Anti-Money Laundering Law of 2001 describes money laundering as committing an act for the purpose of showing that the source of property is lawful, while knowing or believing that it is unlawful.

"The law imposed obligation on an institution to maintain client and transaction record, and report a suspicious transaction to the enforcement unit."

Source: Gulf Daily News

Bahrain Central Bank Governor Denies Laundering A Serious Threat

Central Bank of Bahrain (CBB) governor Rasheed Al Maraj said Wednesday that money laundering in Bahrain, which is one of the Gulf's major financial hubs, was not a serious problem problem but that authorities had to remain vigilant.

"There is no reason for concern as we have all the necessary regulations in place and we work very closely with the law enforcement agencies," Al Maraj said at the opening of a two-day training seminar on money laundering in Manama.

"We have not noticed any serious violations, but we have to be vigilant about this," he said. "This is a crime which can originate from distant jurisdictions that is why we need to make sure the system is able to detect these crimes and control them."

Al Maraj said that financial crime was an international phenomenon which required a coordinated international response.

"With relatively low levels of domestically generated criminal proceeds, the greatest risk of money laundering and terrorist financing comes from questionable proceeds that transit Bahrain and the region," he said.

Al Maraj's remarks came amid a warning by a French crime official that efforts to combat money laundering was "not at its best."

Jean-Pierre Bernard of the French Department of Justice, said that France had been "finding it difficult to identify money laundering operations related to drug trafficking because of lack of cooperation from governments in Eastern Europe and some instances the US."

He said that money laundering of drug trafficking from America and South America on one side and from the East on another, topped the concerns of the French authorities.

"International cooperation to combat money laundering however is not at is best despite a strong push to improve intelligence sharing following the September 11th terrorist attacks on New York and Washington," Bernard said.

He also cited cases of money laundering related to the petroleum industry from Iraq, Iran, Nigeria, and Gabon pointing out that the money being laundered was in the billions.

The two-day training seminar is a joint effort carried out by the CBB and the French Embassy in Bahrain focusing on issues relating to detection, investigation and prosecution techniques in the so-called CFT, or combating the financing of terrorism.

Bahrain has some 365 banking and financial institutions operating in it with a consolidated balance sheet of 140.4 billion dollars in 2005, of which 116.2 billion dollars came from offshore banks.

According to Bahrain's Ministry of Interior, the anti-money laundering unit, which was established in 2002, had handled 128 cases in 2006, down from 235 cases the year before.

http://www.playfuls.com/news_10_21422-Bahrain-Central-Bank-Governor-Denies-Laundering-A-Serious-Threat.html

Banks 'are vulnerable to money laundering'

By Geoffrey Bew

MANAMA: Banks in Bahrain are not doing enough to protect themselves from rising levels of money laundering, an expert said yesterday.

Swiss-based IMTF president Mark Busser said that some financial institutions were guilty of using outdated monitoring systems that fail to keep up with evolving criminal techniques used to avoid detection.

The firm is a leading provider of information technology solutions for tackling fraud detection, operational risk management, trading compliance and due diligence.

Mr Busser was speaking at Regulation, Risk and Compliance conference on money laundering and other challenges facing the financial services industry.

The one-day event was held under the patronage of the Central Bank of Bahrain (CBB) in association with the Central Informatics Organisation.

Bahrain-based Gulf United Technology Solutions hosted the event, which took place at the Gulf Hotel's Gulf International Convention and Exhibition Centre.

"Banks have to invest in anti-money laundering systems," said Mr Busser.

"Money laundering does not happen from a simple transaction, but changes in behaviour and with the development of sophisticated tools.

"Normally it is not one person, but a group thing and it is something that is growing all the time.

"If we do not do anything about it there is a reputation risk to the whole industry.

"A lot of banks started to introduce some kind of simple in-house filtering tool, but the success rate of such systems has decreased to almost zero."

Mr Busser said no specific figures are available on what money laundering costs Bahrain's economy annually, but the problem is valued at billions worldwide.

He said Bahrain's position as the financial hub of the Middle East puts it most at risk of being targeted by criminals, who are looking to "clean" money gained from illegal activity to conceal its identity, source and destination.

Terrorists and drug dealers were among the chief players in money laundering activity, but Mr Busser said they could not do it alone.

"In a lot of cases bank employees are involved and they will not do it for free, they will ask for money," he said.

CBB financial institutions supervision executive director Abdulrahman Al Baker stressed the importance of banks adhering to the country's strict regulations at the event.

"Money laundering is an ever-evolving threat," he told delegates.

"Combating it effectively requires a high degree of awareness and personal responsibility among all financial services professionals.

"The authorities in Bahrain have always placed a great deal of importance on compliance with international regulatory standards.

"We believe that this has been a major factor in Bahrain's success as a financial centre.

"High regulatory standards help give Bahrain international credibility and attract reputable international players in the financial market.

"They also contribute to financial stability and long-term growth."

http://www.gulf-daily-news.com/Story.asp?Article=163490&Sn=BUSI&IssueID=29259

Laundering clamp hailed

06/Dec/2006
Gulf Daily News
Bahrain has won high praise for its efforts in combating money laundering and terrorist financing.

The praise came from delegates attending the Middle East and North Africa Financial Action Task Force (MENAFATF) meeting in the UAE.

The meeting was attended by about 120 experts from MENAFATF member countries, including Jordan, UAE, Bahrain, Tunisia, Algeria, Saudi Arabia, Sudan, Syria, Morocco, Mauritania and Yemen.

It was also attended by representatives from observer members, namely Palestine, France, UK, USA, IMF, World Bank, GCC General Secretariat, FATF, United Nations Office on Drugs and Crime and the Egmont Group.

Bahrains delegation to the meeting was led by the Central Bank of Bahrain deputy governor Anwar Khalifa Al Sadah, who is also chairman of Bahrains Policy Committee for the Prohibition and Combating of Money Laundering and Terrorist Financing.

A key highlight of the meeting was the assessment of anti-money laundering and combating financial terrorism (AML/CFT) efforts in Bahrain.

The assessment of AML/CFT efforts in Bahrain was based on the countrys Financial Sector Assessment Programme (FSAP) report, issued by the IMF earlier this year.

The meeting commended Bahrain for its achievements in the area of AML/CFT and praised the government for its commitment to implement the FATF Recommendations.

The IMF delegation head Joy Smallwood thanked Bahrain government for its many initiatives and achievements in combating money laundering and financial crime.

She said Bahrain was a model for other countries in the MENA region.

http://www.gulfbase.com/site/interface/NewsArchiveDetails.aspx?n=33863