Financial Crime World

Qatar’s Financial System Faces Risks of Money Laundering and Terror Financing

Qatari Authorities Identify Significant Risks of Money Laundering and Terror Financing

DOHA, QATAR - Qatar, a small but wealthy country in the Middle East, has been identified as having significant risks of money laundering (ML) and terror financing (TF). Despite its strong law enforcement and regulatory framework, Qatar faces threats from various sources, including smuggling, fraud, drug crimes, corruption, and terrorist organizations.

National Risk Assessment Highlights Medium-High ML Risk

According to a recent National Risk Assessment (NRA) conducted by the Qatari authorities, the country’s ML risk is assessed as medium-high. The NRA identifies high-risk sectors in banks, exchange houses, dealers in precious metals or stones, trust and company service providers, cash-intensive businesses, and provision of financial services without a license.

Terror Financing Channels Identified

The NRA also identifies abuse of charities and non-profit organizations (NPOs), exchange houses, cross-border transfer services, and the transfer of funds through banks, cash, bearer negotiable instruments, and precious metals or stones as medium-high risk channels for TF.

Qatari Authorities’ AML/CFT System Effective in Some Respects

The Qatari authorities have implemented an anti-money laundering and counter-terrorist financing (AML/CFT) system that is effective in some respects. Strong results are being achieved in relation to:

  • Understanding of risks
  • Supervision of financial institutions and designated non-financial businesses and professions
  • Confiscation of proceeds of crime
  • Implementation of targeted financial sanctions related to TF

Areas for Improvement Identified

However, major improvements are needed in relation to:

  • International cooperation
  • Preventive measures by financial institutions and designated non-financial businesses and professions
  • Measures to improve the transparency of legal persons and arrangements
  • Use of financial intelligence
  • Investigation and prosecution of ML activity
  • TF-related prosecutions
  • Investigation and prosecution of TF activity

Technical Compliance with FATF Standards

In terms of technical compliance with the Financial Action Task Force (FATF) Standards, Qatar has fundamentally overhauled its AML/CFT regime since its last evaluation. The country introduced a new AML/CFT law in 2019 and has introduced a range of other reforms to improve its institutional and legislative framework.

Qatari Authorities’ Understanding of ML/TF Risks

The Qatari authorities have a good overall understanding of their major ML/TF risks at a national level, but there is scope for moderate improvements in relation to certain threats, such as ML associated with human trafficking and certain sectors.

National AML/CFT Policies and Activities

Qatar’s national AML/CFT policies and activities largely address its identified ML/TF risks, but further work is necessary to ensure that the actions of law enforcement, supervisors, and judicial system are implementing these reforms and delivering expected outcomes.

Interagency Coordination and Awareness

The Qatari authorities have strong interagency coordination on ML/TF/PF through formal and informal means, with policy and operational cooperation happening frequently and smoothly. Financial institutions, designated non-financial businesses and professions, and NPOs demonstrate a strong awareness of the main results of the NRA.

Conclusion

While Qatar has made significant progress in addressing its AML/CFT risks, further improvements are needed to strengthen its financial system and prevent the misuse of its financial infrastructure for ML and TF purposes.