In a bid to dry up terrorism funding channels and combat money laundering, Bahrain last week announced a stringent system of financial oversight mechanisms that will apply to all civil organisations.
Under new legislation approved by the government on Sunday (August 18th), fundraising for general and religious purposes will be supervised by the Ministry of Social Development and the Ministry of Justice, Islamic Affairs and Endowments.
The legislation stipulates that applicants for a fundraising license must submit their application to the Ministry of Social Development at least two months prior to the start of fundraising, including the method, duration, place and purpose behind the request.
Those who receive general donations from an unlicensed group must also inform the ministry of their value, purpose and donor within seven days, and the ministry will respond within 15 days of its approval or rejection thereof.
There are nearly 500 civil organisations in Bahrain, including professional, social, charitable, co-operative and political societies.
A ‘crucial recommendation’
Parliamentarian Adnan al-Maliki, a member of al-Asalah Islamic Society, said the recent decision requires all organisations to reconcile their administrative and financial statuses and encourages transparency.
“The decision will help significantly in eliminating [abuses] associated with fundraising for charity and supporting needy families, to ensure the funds do not go towards arming terrorists or extremists against the kingdom,” he told Al-Shorfa.
The ministries bear a great responsibility in implementing this “‘crucial’ recommendation” and in monitoring the inflow of funds, he said.
Key oversight tools include inspecting donation boxes placed at the doors of houses of worship.
Imams and worshipers should be urged to exercise caution when they collect funds for charity, zakat and other purposes, al-Maliki said.
The decision “is a powerful legal tool that will curb the raising of funds by unknown means and their disbursement for obscure purposes”, said political analyst Dr Yousef al-Meshaal.
The stringent oversight tools are crucial to ensure funds are “disbursed within the correct framework and do not end up in the hands of terrorists”, he said. “A good portion of these funds are collected from nameless, benevolent donors as alms or charitable donations, but their ultimate destination is unknown.”
Al-Meshaal said he hopes inspection teams from the ministries of social development and justice will be formed to inspect organisations and verify their funding sources and the nature of their expenditures.
“Because donated funds usually come from anonymous sources, it is imperative there is a law that institutes oversight over donations raised for religious or political quarters, which have unknown destinations and uses,” attorney Abdel Rahman Ghonaim told Al-Shorfa.
“The money laundering law addresses this issue, as does the anti-terrorism law,” he said. “However, those laws criminalise these acts in general, while the cabinet recommendation concerns itself with oversight of donations.”