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 Report relating to the implementation of anti-money laundering and counter-terrorist financing standards in Qatar was undertaken by the Financial Action Task Force (FATF) in 2008. According to that Evaluation, Qatar was deemed Compliant for 2 and Largely Compliant for 10 of the FATF 40 + 9 Recommendations. It was Partially Compliant or Non-Compliant for all 6 of the Core Recommendations.
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.
Saudi Arabia, Bahrain, the United Arab Emirates UAE, Egypt, Yemen, Libya's eastern-based government and the Maldives all cut diplomatic ties with Qatar following accusations that Qatar backs militant groups including so-called Islamic State (IS) and al-Qaeda.
The Arab League (comprising 22 Arab member states), of which this country is a member, has approved imposing sanctions on Syria. These include: -
Cutting off transactions with the Syrian central bank
Halting funding by Arab governments for projects in Syria
A ban on senior Syrian officials travelling to other Arab countries
A freeze on assets related to President Bashar al-Assad's government
The declaration also calls on Arab central banks to monitor transfers to Syria, with the exception of remittances from Syrians abroad.
The Arab League has also boycotted Israel in a systematic effort to isolate Israel economically in support of the Palestinians, however, the implementation of the boycott has varied over time among member states. There are three tiers to the boycott. The primary boycott prohibits the importation of Israeli-origin goods and services into boycotting countries. The secondary boycott prohibits individuals, as well as private and public sector firms and organizations, in member countries from engaging in business with any entity that does business in Israel. The Arab League maintains a blacklist of such firms. The tertiary boycott prohibits any entity in a member country from doing business with a company or individual that has business dealings with U.S. or other firms on the Arab League blacklist.
BRIBERY & CORRUPTION
Rating (100-Good / 0-Bad)
Transparency International Corruption Index 62
World Governance Indicator – Control of Corruption 77
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
Qatar has prospered in the last several years with continued high real GDP growth, but low oil prices have dampened the outlook. Qatar was the only Gulf Cooperation Council member that avoided a budget deficit in 2015, but it projects a $12.8 billion deficit, 6% of GDP in 2016.
GDP is driven largely by the oil and gas sector; however, growth in manufacturing, construction, and financial services have lifted the non-oil sectors to just over half of Qatar’s nominal GDP. Economic policy is focused on sustaining Qatar's non-associated natural gas reserves and increasing private and foreign investment in non-energy sectors, but oil and gas still account for roughly 92% of export earnings, and 56% of government revenues. Oil and gas have made Qatar the world's highest per-capita income country and the country with the lowest unemployment. Proved oil reserves in excess of 25 billion barrels should enable continued output at current levels for about 56 years. Qatar's proved reserves of natural gas exceed 25 trillion cubic meters, about 13% of the world total and third largest in the world.
Qatar's successful 2022 World Cup bid is accelerating large-scale infrastructure projects such as its metro system, light rail system, construction of a new port, roads, stadiums and related sporting infrastructure.
Agriculture - products:
fruits, vegetables; poultry, dairy products, beef; fish
liquefied natural gas, crude oil production and refining, ammonia, fertilizers, petrochemicals, steel reinforcing bars, cement, commercial ship repair
Exports - commodities:
liquefied natural gas (LNG), petroleum products, fertilizers, steel
Exports - partners:
Japan 25.4%, India 14.6%, China 8.4%, UAE 6.8%, Singapore 5.6%, UK 5.5%, Thailand 4.2% (2015)
Imports - commodities:
machinery and transport equipment, food, chemicals
Imports - partners:
China 11.9%, US 11.3%, UAE 9%, Germany 7.7%, Japan 6.7%, UK 5.9%, Italy 4.6%, Saudi Arabia 4.4% (2015)
Investment Climate - US State Department
This past year Qatar experienced its first budget deficit in fifteen years due primarily to lower oil prices. Despite this, the Government of Qatar has maintained high levels of government spending in pursuit of its 2030 National Vision. As the world's leading supplier of liquefied natural gas (LNG), Qatar has had one of the fastest growing economies with the highest per capita income in the world and due to its long-term LNG supply contracts and relatively low production costs it has been shielded from the oil crisis better than many other oil-dependent economies. Qatar’s economic growth rate is projected to accelerate slightly to 6.8 percent in 2016 from 6.6 percent in 2015, according to World Bank estimates.
Qatar continues to undergo massive transformation under the rubric of the 2030 National Vision, which aims to modernize infrastructure, establish an advanced, knowledge-based, and diversified economy, no longer reliant on the hydrocarbon sector. The government is heavily involved in Qatar's economy, although it encourages Qatari private investment in many sectors. As Qatar plans to spend USD 200 billion in the lead up to the 2022 FIFA World Cup and in implementation of the 2030 National Vision, there are enormous opportunities for foreign investment in various sectors including infrastructure, health care, education, tourism and financial services, among others. Qatar’s budgetary spending is heavily focused in particular on infrastructure, health, and education.
Qatar this past year also began to heavily invest in the United States through its sovereign wealth fund, the Qatar Investment Authority (QIA), and its subsidiaries, such as Qatari Diar. QIA announced plans to invest $35 billion in the U.S. over the course of the next five years and opened an office in New York City in September 2015 to help facilitate these investments.
The U.S. and Qatar launched the Economic and Investment Dialogue in October 2015 in Washington, DC to further strengthen the bilateral economic relationship and help address obstacles to investment and trade. The next round of talks is expected to take place in Qatar in the fall of 2016.
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