FATF claims that although Qatar made “positive and sustained progress,” it was still lacking necessary regulations.
The Financial Action Task Force (FATF), an international entity focused on money laundering and terrorism financing, has criticized the Qatar Central Bank (QCB) for its insufficient regulation of Virtual Asset Service Providers (VASPs).
On May 31st, the FATF published a report emphasizing that Qatar needs to strengthen its response to growing forms of criminal activity, specifically pointing to the need for stronger sanctions for VASPs.
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In the report, the Financial Action Task Force stated:
Qatar needs to improve understanding of more complex forms of money laundering and terrorist financing.
The report highlighted that while Qatar has made “positive and sustained progress” in gathering beneficial ownership data for a near-complete unified register, the control measures for ensuring the accuracy and relevance of this information are still insufficient.
It is worth noting that in December 2019, the Qatar Financial Centre Regulatory Authority (QFCRA) warned that conducting virtual asset services in or from the Qatar Financial Centre would not be allowed.
The authority had also declared that any firm facilitating the provision or exchange of crypto assets would face penalties in line with the QFCRA’s jurisdiction.
However, according to the recent FATF report, Qatar’s enforcement of these rules has been less than adequate. The FATF report strongly recommended that Qatari authorities ramp up their investigative efforts in the money laundering area. It implied that Qatar is under-utilizing its “sophisticated analysis capabilities” to identify money laundering instances.
On the other hand, Qatar has been actively exploring the potential for a central bank digital currency (CBDC) despite its ban on virtual asset service providers.
At the end of May, the news broke that FATF ordered Pakistan to ban crypto. In light of these allegations, FATF responded, noting that it “does not require countries to indiscriminately ban virtual assets and virtual asset service providers.”
