Global Watchdog Warns Qatar About Deficiencies Investigating Money Laundering

Despite substantial progress in the combat against money laundering and terrorism financing, Qatar is being urged to improve its criminal justice response, especially in relation to terrorist financing, said the Financial Action Task Force (FATF).

The Gulf state, known for its wealth and primarily expatriate workforce, has low domestic crime rates.

Yet, the country is exposed to risks of money laundering from smuggling, fraud, drug crimes and corruption.

In addition, Qatar's citizens have become targets for fundraising efforts related to terrorism domestically and internationally.

The recent joint assessment by FATF and the Middle East & North Africa Financial Action Task Force (MENAFATF) noted that although Qatar demonstrated a comprehensive understanding of the money laundering and terrorist financing risks it faces, the nation needs to increase its grasp of more complex forms of these illicit activities.

While Qatar adopted a risk-based approach to assess these risks and supervise the financial sector, the same level of scrutiny applied to the non-financial sector is still in its early stages.

Qatar is commended for its significant progress in collecting beneficial ownership information for its nearly completed unified register.

But, the FATF warns further measures are required to ensure the collected information's accuracy and timeliness.

While the country's financial intelligence unit is well-resourced and has access to a broad range of information, the watchdog stresses that the country's advanced analytical capabilities are under-utilized in detecting money laundering and terrorist financing activities.

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The low rate of money laundering investigations and prosecutions has been a point of concern.

Authorities have been encouraged to improve their investigative methods, particularly in identifying Qatar's potential role in complex or professional money laundering schemes.

Despite a small number of terrorist financing convictions and prosecutions, there are significant discrepancies between Qatar's risk profile and the degree of prosecuted and convicted terrorist financing activities.

The FATF acknowledged Qatar's efforts in confiscating large sums related to crime and prioritizing international cooperation. Nonetheless, the country needs to bolster its overall system for mutual legal assistance and extradition.

Lastly, Qatar's framework for implementing targeted financial sanctions related to terrorist financing has been effective in seizing a large number of assets.

The FATF urged the nation to shift its focus more toward the enforcement of proliferation financing sanctions.

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