Compliance with International Standards on AML/CFT in Qatar: Gap Analysis

Compliance with International Standards on AML/CFT in Qatar: Gap Analysis

This technical compliance report seeks to pre-empt the findings of the 2017 Mutual Evaluation Report by the Financial Action Task Force (FATF) Qatar Taskforce. This will enable the QFIU (Qatar Financial Information Unit) to propose the required amendments needed in Qatar’s laws prior to the arrival of the Taskforce, so that Qatar may comply more fully with the FATF Recommendations and achieve a higher rating than in previous evaluations. The technical compliance report herein identifies the recommendations in which Qatar meets the requirements and those where further amendments are required. Authors: Reem Safar, Ghada Kafoud, Noora Ahmad Al-Romaihi, Hessa Thani Alkuwari, Sarah Suliman, and Batool Al Atawneh


Executive Summary.

Executive Summary

This technical compliance report (the “Report”) seeks to pre-empt the findings of the 2017 Mutual Evaluation Report by the Financial Action Task Force (FATF) on Qatar. This will enable the Qatar Financial Information Unit (QFIU) to propose the required amendments needed in Qatar’s laws prior to the arrival of the FATF and in order that Qatar may comply more fully with the FATF Recommendations (the “Recommendations”) and achieve a higher rating than the previous evaluations. The Report herein identifies the Recommendations in which Qatar meets the requirements and those where further amendments are required.

The Report applies the latest FATF evaluation methodology. The FATF methodology is framed to a set of Recommendations which cover several sectors to maintain the security in the domestic and in the international level with regards to the issue stated. Countries that are part of the FATF organization shall meet with those Recommendations to get full compliance. Recommendations are divided into forty (40) basic headings that cover measures and procedures which shall be implemented by the competent authorities in their respective countries.

Despite its small geographical space, Qatar like its neighbouring GCC countries, is one of the wealthiest countries in the world. It is considered as a strong economic and financial asset internationally. Qatar played a huge political role in spreading peace and mediating between countries or parties in dispute especially in the MENA region. However, for a long time now Qatar has been facing accusations of sponsoring terrorism by having easy and flexible laws and regulations which enable terrorists and those who finance terrorism to operate freely within its borders. Due to its legislative deficiency, the Emir of Qatar was put in a weak position and had to personally respond to these allegations in a live interview to clarify Qatar’s standing towards terrorism and its refusal for such actions. 

Therefore, measuring Qatar’s compliance to the FATF AML/CFT standards is fundamental to support Qatar’s case and emphasize its efforts in combating and financing terrorism. Since 2008 MENAFATF follow-up report, Qatar has made huge progress in improving its AML/CFT policies by amending or issuing new legislation that provides a strict and supervised framework for the flow of money inside and outside of Qatar. Qatar has stepped forward against those claims by implementing AML/CFT Law No. 4 of 2010 (the “AML/CTF Law”) which is a specific and comprehensive law tailored to include the AML/CFT in FATF standards.

In 2010, the FATF plenary meeting acknowledged Qatar’s significant progress in developing an enhanced AML/CFT policy. As a result, Qatar was excluded from FATF’s ongoing global AML/CFT compliance review and worked with the MENAFATF to further pursue its compliance with the issues stipulated in the FATF Mutual Report. Qatar shall further develop its legislation to meet with the non-compliant or partially compliant Recommendations before the FATF Mutual Evaluation Report in 2017.

The purpose of this Report is to clarify the compliance and the non-compliance of Qatar on the forty (40) Recommendations with regards to the last updated methodology of 2013 by the FATF.

The Report covers the technicalities of the legislation however it unable to include the risk based approach and enforcement which is the first Recommendation in the FATF 2012 standards because the researchers do not have access to the information required in the Recommendations. The QFIU is the unit responsible and who must take actions and collaborate with the rest of the authorities in Qatar to cover the risk-based approach and the enforcement.

This Report is made to be provided to the Rule of Law and Anti-Corruption Centre in Doha, whom the vision is to seek the combating of corruption. The influence of the Report would fall mostly on the legislation of Qatar and revealing the shortcomings of it, therefore assisting the Rule of Law and Anti-Corruption Centre in filling the void in the legislation.