Qatar Central Bank Criticised by FATF for Lax Regulation
The Financial Action Task Force (FATF), a global watchdog against money laundering and terrorist financing, has criticised the Qatar Central Bank (QCB) for its lacklustre enforcement of regulations prohibiting virtual asset service providers.
Inadequate Understanding of Complex Financial Crimes
In a report released on May 31, the FATF emphasised the need for Qatar to improve its capabilities to counteract more sophisticated forms of criminal activity, which include sanctioning virtual asset service providers. The FATF statement said: “It needs to improve understanding of more complex forms of money laundering and terrorist financing.”
Regulatory Actions Against Virtual Asset Services
In 2019, the Qatar Financial Centre Regulatory Authority (QFCRA) announced that virtual asset services are not allowed to operate in or from the Qatar Financial Centre. At that time, QFCRA warned that penalties would be imposed on any company providing or facilitating the provision or exchange of crypto assets in accordance with its rights and obligations.
FATF’s Evaluation of Qatar’s Progress
Despite the criticism, the FATF’s report acknowledges some progress made by Qatar, especially in terms of gathering beneficial ownership information for its nearly complete unified register, a data consolidation of its citizens. However, it highlighted that more work is required: “There are still not sufficient controls to ensure that all information collected remains accurate and up-to-date.”
Call for Improved Investigative Efforts
Qatar’s authorities were urged to bolster their investigative efforts into money laundering. The FATF alleged that Qatar’s “sophisticated analysis capabilities” to identify instances of money laundering were underutilized.
Towards a Central Bank Digital Currency
Interestingly, while Qatar has banned virtual asset service providers, it is actively exploring the potential use cases for implementing a central bank digital currency (CBDC). It was previously reported in June 2022 that the QCB is in the “foundation stage” of issuing a CBDC. The governor of Qatar’s central bank, Sheikh Bandar bin Mohammed bin Saoud Al Thani, revealed that the QCB was “evaluating the pros and cons” of CBDCs, and was in the process of choosing the right technology and platform.
