FATF & Qatar: Anti-Money Laundering Investigations & Compliance

Angelika Hellweger of Rahman Ravelli details the Financial Action Task Force’s assessment of Qatar’s attempts to tackle money laundering and terrorist financing.

The Financial Action Task Force (FATF) has recently published its mutual evaluation report on Qatar. This report assesses the effectiveness of Qatar's anti-money laundering and counter-terrorism financing (AML / CTF) measures in relation to compliance with FATF's 40 recommendations.

Qatar has won praise for the progress it made in its AML measures and its commitment to strengthening its legal and institutional framework at a national level. The fact that Qatar promotes cooperation and coordination when it comes to its financial intelligence unit (QFIU), its regulatory authorities and its law enforcement agencies was assessed positively. However, FATF has said that further progress is necessary to improve Qatar’s overall system for mutual legal assistance and extradition. But it also said that Qatar has made “positive and sustained progress” in amassing beneficial ownership information for its nearly complete unified register — a consolidation of data relating to its citizens.

The FATF report states that although Qatar’s QFIU is well-equipped, its sophisticated analytical capabilities are not being used fully. It was noted that the Qatari AML framework has not been tested in court and that Qatar has only secured a small number of terrorist financing convictions and prosecutions. There are allegedly major inconsistencies between Qatar’s risk profile and the type and extent of terrorist financing activity prosecuted and convicted. The report also recommended improvements regarding the supervision of non-financial sectors, such as real estate, precious metals and designated non-financial businesses and professions.

Although Qatar banned crypto in 2019, FATF suggests that this ban has not been effectively enforced. The report says Qatar had “not demonstrated that the competent authorities proactively identify and take enforcement action for potential breaches of this prohibition.” But FATF did accept that between 2020 and June 2022, 2007 transactions were rejected and 43 accounts were closed. Qatar is also effectively confiscating significant sums of money and property that are judged to be the proceeds of financial crime and has a targeted national strategy to confiscate all proceeds of crime and assets from higher-risk threats.

In order to boost Qatar’s AML / CTF measures and ensure improvements, FATF has proposed:

• Providing in-depth training to Qatar’s law enforcement agencies on AML law and on money laundering trends and typologies, as well as training on investigating and prosecuting money laundering and terrorist financing offences. This training should cover, for example, the scope of predicate offences, AML and CTF typologies, investigation techniques and familiarisation with prosecution of AML / CTF and the use of information technology.
• Introducing enhanced due diligence requirements for higher risk categories of customers, business relationships or transactions.
• Financial institutions ensuring they have appropriate risk management systems to determine whether a customer is a politically-exposed person - including obtaining senior management approval for establishing business relationships with such customers, taking reasonable measures to establish the source of wealth and source of funds, and conducting enhanced ongoing monitoring of the business relationship.
• Setting out clear requirements for all financial institutions to establish and maintain internal procedures, policies and controls so that the same requirements apply uniformly to policies and controls addressing customer due diligence, record retention, detection of unusual and suspicious transactions and reporting obligations.
• Establishing a mechanism that ensures that extradition requests and proceedings relating to AML / CTF are handled without undue delay.
• Pursuing confiscations as a matter of course in the criminal justice framework and developing more specific policy objectives in relation to recovery strategy, including asset seizure and confiscation targets.