ANTI-MONEY LAUNDERING

FATF Status

Qatar is not on the FATF List of Countries that have been identified as having strategic AML deficiencies

Compliance with FATF Recommendations

The last Mutual Evaluation Evaluation relating to the implementation of anti-money laundering and counter-terrorist financing standards in Qatar was undertaken in 2023. According to that Evaluation, Qatar was deemed Compliant for 32 and Largely Compliant for 8 of the FATF 40 Recommendations. It was deemed Highly Effective for 0 and Substantially Effective for 4 of the Effectiveness & Technical Compliance ratings.

US Department of State Money Laundering assessment (INCSR)

Qatar was deemed a Jurisdiction of Concern by the US Department of State 2016 International Narcotics Control Strategy Report (INCSR). Key Findings from the report are as follows: -

Qatar has become an increasingly important banking and financial services center in the Gulf region. Despite the growth of the banking sector and increasing options for financial services, Qatar still has a largely cash economy. The expansion of the financial and trade sectors, the large number of expatriate laborers who send remittances to their home countries, the liberalization and growth in the real estate sector, uneven corporate oversight, and Iran’s efforts to bypass sanctions through Gulf economies make Qatar increasingly vulnerable to the threat of money laundering. The exploitation of charities and private donations to finance terrorism continues to be a concern, as does the ability of individuals to bypass the formal financial sector for illicit financing.

Rating                                                                           (100-Good / 0-Bad)

Transparency International Corruption Index                           58

World Governance Indicator – Control of Corruption             79

Corruption in Qatar is relatively low and is among the lowest in the Middle East and North African region. Despite that petty corruption is almost non-existent in all sector, patronage networks and clientelism are institutionalized, particularly in public procurement. The use of influential middlemen - known as 'wasta', and gift-giving play a major role in the business culture of Qatar. The Penal Code No. 11/2004 is Qatar's primary piece of corruption-related legislation. Anti-corruption laws are effectively enforced, and the country has substantial penalties for corrupt practices. Notwithstanding, the ruling family bypass laws with impunity and high-ranking officials are rarely prosecuted for corruption acts. The likelihood of encountering demands for facilitation payments is low, nonetheless, companies should be aware that facilitation payments are illegal under Qatari laws. For further information - GAN Integrity Business Anti-Corruption Portal

The State of Qatar is one of the world’s largest exporters of liquefied natural gas (LNG) and has one of the highest per capita incomes in the world. Qatar’s gross domestic product (GDP) neared $180 billion in 2021, increasing by 24 percent year-on-year owing to higher hydrocarbons sales and overall economic recovery from the COVID-19 pandemic. According to the International Monetary Fund’s (IMF) projections, Qatar’s real GDP is projected to increase by 2.4 percent in 2023. This positive outlook is driven mainly by QatarEnergy’s ambitious plans to expand LNG production by more than 60 percent over the next five years. Qatar’s government projects a budgetary surplus of $8 billion in 2023, based on an oil price assumption of $65 per barrel.

The government remains the dominant actor in the economy, though it encourages private investment in many sectors and continues to take steps to encourage more foreign direct investment (FDI). The primary driver of Qatar’s economy is the energy sector, which has attracted tens of billions of dollars in FDI. In line with the country’s National Vision 2030’s goal of establishing a knowledge-based and diversified economy, the Government of Qatar (GoQ) has recently introduced reforms to its foreign investment and foreign property ownership laws. This recent legislation allows up to 100 percent foreign ownership of businesses in most sectors and real estate in newly designated areas. In 2020, the government also enacted legislation to regulate and promote public-private partnerships.

Significant opportunities for foreign investment exist in infrastructure, healthcare, education, tourism, energy, information and communications technology, and the service sector. The government allocated $20 billion for major projects in these sectors in 2022. Measured by the amount of inward FDI stock, manufacturing, mining and quarrying, finance, and insurance are the primary sectors that attract foreign investors. The government provides various incentives to attract local and foreign investments, including exemptions from customs duties and certain land-use benefits. The corporate tax rate is 10 percent for most sectors, and there is no personal income tax. One notable exception is the corporate tax of 35 percent on foreign firms in the extractive industries, including but not limited to those in natural gas extraction.

The GoQ recently adopted measures to prosecute human rights violations, improve its human trafficking legislation, address forced labor, and set a minimum wage, but the country continues to face challenges that may affect foreign businesses. These challenges include restrictions on free expression and peaceful assembly, a prohibition on collective bargaining for foreign nationals, discrimination against women in law and practice, and cases of forced labor.

To curb corruption and anti-competitive practices, the GoQ created a regulatory regime consisting of various enabled government agencies, including the Transparency Authority, the National Competition Protection Authority, and the Anti-Monopoly Committee. To improve transparency, the government streamlined its procurement processes in 2016, creating an online portal for all government tenders. Nonetheless, personal connections reportedly play a significant role in concluding business deals.

In recent years, Qatar has significantly bolstered its U.S. investments through its sovereign wealth fund, the Qatar Investment Authority (QIA), and its subsidiaries, notably Qatari Diar. In 2019, QIA pledged to allocate $45 billion to U.S. investments; it opened an office in New York City in 2015 to facilitate its U.S. investments. The fifth U.S.-Qatar Strategic Dialogue took place in Doha from November 2022 to March 2023 and further strengthened strategic and economic partnerships and addressed obstacles to investment and trade.

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Country Links

Qatar Financial Information Unit (QFIU)

Qatar Financial Markets Authority (QFMA)

Qatar Central Bank