Narcotics Control Strategy Report

Qatar

March 2005

Volume II: Money Launderng and Financial Crimes

On September 11, 2002, the Emir of the State of Qatar signed the Anti-Money Laundering Law. According to Article 28 of the law, money laundering offenses involve the acquisition, holding, disposing of, managing, keeping, exchanging, depositing, investing, transferring, or converting of funds from illegal proceeds. The law imposes penalties of imprisonment of five to seven years, in addition to fines. The law expanded the powers of confiscation of proceeds gained from the commission of a crime, and instrumentalities used to commit a crime, to include the identification and freezing of assets as well as the ultimate confiscation of the illegal proceeds upon conviction of the defendant for money laundering.

The law requires all financial institutions to report suspicious transactions to the QCB and retain records for up to 15 years. The law also gives the QCB greater powers to inspect suspicious bank accounts, and grants the authorities the right to confiscate money in illegal transactions. Article 17 permits Qatar to extradite convicted criminals in accordance with international or bilateral treaties.

The Anti-Money Laundering Law established the National Anti-Money Laundering Committee (NAMLC) to oversee and coordinate money laundering combating efforts. It is chaired by the Deputy Governor of the Qatar Central Bank, in addition to ten other members from the Ministries of Interior, Civil Service Affairs and Housing, Economy and Commerce, Finance, Justice, QCB, Customs and Ports Authority and the State Security Bureau.

In February 2004, passed the Combating Terrorism Law. According to Article Four of the new law, any individual or entity that provides financial or logistical support, as well as raises money for activities considered terrorist crimes according to this statute are to be punished. The punishments are listed in Article Two of the law, which include the death penalty, life imprisonment, and 10 or 15 year jail sentences depending on the crime.

On October 17, 2004 the Government of Qatar appointed a member of the ruling Al-Thani family as director of the Financial Intelligence Unit (FIU). The FIU is responsible for reviewing all financial transaction reports, identifying suspicious transactions and financial activities of concern, ensuring that all government ministries and agencies have procedures and standards to ensure proper oversight of financial transactions, and recommending actions to be taken by the NAMLC if suspicious transactions or financial activities of concern are identified. Qatar’s FIU has been active during the new director’s appointment. The FIU is coordinating closely with the Doha Securities Market (DSM) to establish procedures and standards to monitor all financial activities that occur in Qatar’s stock market. In November 2004, the FIU established monitoring standards in coordination with the National Post Office to ensure that post offices throughout the country monitor carefully all cash transfers. The FIU is also taking steps to monitor financial activities that take place in the Ministry of Justice’s Registration Department and Qatar’s camel market.

In addition to reporting suspicious transactions, all financial institutions (including businesses conducting hawala transactions) must report transactions Qatari Riyals (QR) 100,000 (approximately $33,000) or above to the QCB. Any repeated cash transactions of QR 30,000 (approximately $10,000) or higher made by an individual or entity must be reported. Any transaction of QR 100,000 or higher and repeated transactions of QR 30,000 or higher will be investigated by the FIU in coordination with the Ministries of Justice and Interior. Exchange houses must report any transaction of QR 40,000 or higher. All financial institutions also must identify the person entering into a business relationship or conducting a transaction. In December 2004, QCB installed a central reporting system to assist the FIU in monitoring all financial transactions made by banks.

Qatar has taken steps to combat the financing of terrorism, including requiring banks to freeze the assets of the individuals and entities listed on the UN 1267 Sanctions Committee’s consolidated list. In 2002, the GOQ established a national committee, to review the consolidated designation lists and to recommend any necessary actions against individuals or entities found in Qatar. On August 24, 2003, the Anti-Money Laundering law was amended (amendment 21/2003) and published in the official gazette. Amendment 21 revised three articles in the anti-money laundering law. Article 2 was amended to broaden the definition for money laundering to include any activities related to terrorist financing. Article 8 added the customs and ports authority to the NAMLC. Article 12 authorized the Central Bank governor to freeze suspicious accounts up to ten days and to inform the attorney general within three days of any action taken. The Attorney General may renew or nullify the freeze order for a period of up to three months. After this process, a freeze order may not be renewed unless authorized by court order.

In March 2004, The Government of Qatar passed a law to establish the Qatar Authority for Charitable Works, which monitors all charitable activity in and outside of Qatar. This law incorporates the Charitable Societies Law (Law No. 8/1998), which outlines the monitoring and supervision of Qatar’s charities. The Secretary General of the Authority will approve all international fund transfers by the charities. The Authority will have primary responsibility for monitoring overseas charitable, development, and humanitarian projects that were previously under the oversight of several government agencies such as the Ministry of Foreign Affairs, the Ministry of Finance and the Ministry of Economy and Commerce. Overseas activities must be undertaken in collaboration with a non-governmental organization (NGO) that is legally registered in the receiving country. The Authority will prepare an annual report on the status of all projects and submit the report to relevant ministries. The Authority is in the process of developing concrete measures to exert more control over domestic charity collection.

Article 37 of Law Number 8 of 1998, concerning the establishment and governance of private associations and institutions, stipulates that the Ministry of Awqaf (Endowments) and Islamic Affairs shall oversee and monitor all the activities of private institutions within the boundaries that are regulated by executive provisions. The Ministry may examine the institution’s books, records, and documents that are related to its activities, and it may amend its bylaws. The institution shall provide the Ministry with any information, documents, or other data it requests. According to Article 1 of Law 15 of 1993, banks practicing in offshore business shall be formed either as joint stock companies having their head offices in the State of Qatar or as branches of Qatari or foreign banks.

The QCB, Public Prosecutor and the Criminal Investigation Division (CID) of the Ministry of Interior are the principal entities that have the responsibility for investigating and prosecuting money laundering cases. The FIU receives all suspicious transaction reports and conducts an initial analysis. The FIU also obtains additional information from the banks and other government ministries before determining whether to forward the suspicious report to the Ministry of Interior. The Public Prosecutor and CID work closely on all criminal cases, although in financial cases they often seek the assistance of the QCB. There are no specialized units within the Public Prosecutor or CID’s offices that initiate or investigate financial crimes.

Qatar does not yet have any cross-border reporting requirements for financial transactions. Immigration and customs authorities are reviewing this policy and are increasingly interested in expanding their ability to detect trade-based money laundering. The Government of Qatar has established a subcommittee under the NAMLC to implement cross-border reporting requirements. The subcommittee is composed of the QCB, Customs Authority, FIU, and members of the NAMLC. In 2003, the Government of Qatar (GOQ) concluded the investigation of a seizure that occurred in November 2002, involving approximately $400,000 worth of gold that had been smuggled into the country. The GOQ confiscated all the gold.

Qatar is a party to the 1988 UN Drug Convention but not the UN Convention for the Suppression of the Financing of Terrorism or the UN Convention against Transnational Organized Crime. Qatar is one of the original signatories of the memorandum of understanding governing the establishment of the Middle East and North Africa Financial Action Task Force (MENAFATF), a FATF-style regional body that promotes best practices to combat money laundering and terrorist financing in the region. MENAFATF was inaugurated on November 30 in Bahrain by 14 Arab countries. Qatar also participates in the activities of the FATF through its membership in the Gulf Cooperation Council (GCC).

The passage of the Combating Terrorism Law and the establishment of a Financial Intelligence Unit (FIU) demonstrate the Government of Qatar’s commitment to fight terrorist financing. Implementation and enforcement of the new law and regulations are essential to the success of Qatar’s efforts. Qatar has demonstrated a willingness to work with other countries in the fight against terrorist financing and other financial crimes. Qatar should continue to work to ensure that law enforcement, prosecutors, and customs authorities receive the necessary training and technical assistance to improve their capabilities in recognizing and pursuing various forms of terrorist financing, money laundering and other financial crimes. Qatar should become a party to the UN International Convention for the Suppression of the Financing of Terrorism and the UN Convention against Transnational Organized Crime.