Financial Crime World

Qatar’s Financial Institutions Take the Lead in Crime Prevention: New Anti-Money Laundering and Terrorism Financing Law

In a bold move to bolster Qatar’s financial security and combat money laundering (ML) and terrorism financing (TF), His Highness Sheikh Tamim Bin Hamad Al Thani, the Emir of the State of Qatar, issued Law No. (32) of 2019 on Combatting Money Laundering and Terrorism Financing.

The new law merges various existing legislations and strengthens the roles of financial institutions and regulatory authorities in preventing ML and TF.

  • Requirement for Financial Institutions
  • Banks and designated non-financial businesses and professions (DNFBPs) to take stringent measures
  • Identify, assess, understand, and monitor ML/TF risks
  • Implement internal policies, procedures, and controls
  • Apply a risk-based approach to managing these risks

Compliance with Targeted Financial Sanctions

Financial institutions are required to:

  • Set up systems and apply preventive measures
  • Submit reports and maintain records for at least ten years
  • Prohibited from opening anonymous or obviously fictitious accounts

Enhanced Customer Due Diligence (CDD) Measures

Financial institutions and DNFBPs must:

  • Identify customers and beneficiary owners
  • Verify their identities using reliable sources
  • Understand the purpose and nature of business relationships and transactions

Relying on Third Parties for CDD Measures

Financial institutions may rely on third parties for CDD measures but remain ultimately responsible for their implementation.

High-Risk Business Relationships and Transactions

Enhanced due diligence (EDD) is required for high-risk business relationships and transactions with natural or legal persons, including those from high-risk countries.

Correspondent Relationships and Wire Transfers

  • Prohibition of correspondent relationships with shell banks
  • Rules for carrying out wire transfers between financial institutions

Money or Value Transfer Services

  • Licensed and supervised by the Qatar Central Bank
  • Appropriate punitive measures against unlicensed providers

Penalties for Non-Compliance

Financial institutions’ failure to comply with the new law will result in penalties, including fines, license revocation, and criminal prosecution.

Alignment with International Standards

The law’s provisions align with international standards set by the Financial Action Task Force (FATF), reinforcing Qatar’s commitment to an effective global response to ML and TF.

Ensuring a Secure and Transparent Environment

With the issuance of Law No. (32) of 2019, Qatar reinforces its position as a responsible and committed member of the international community in the fight against financial crimes. This comprehensive legal framework will ensure that financial institutions operate in a secure and transparent environment, promoting investor confidence and protecting the nation’s financial stability.