Qatar

Qatar Corruption Report

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Snapshot

Qatar_249x122.pngCorruption in Qatar is relatively low and is among the lowest in the Middle East and North African region. Despite that petty corruption is almost non-existent in all sector, patronage networks and clientelism are institutionalized, particularly in public procurement. The use of influential middlemen - known as 'wasta', and gift-giving play a major role in the business culture of Qatar. The Penal Code No. 11/2004 is Qatar's primary piece of corruption-related legislation. Anti-corruption laws are effectively enforced, and the country has substantial penalties for corrupt practices. Notwithstanding, the ruling family bypass laws with impunity and high-ranking officials are rarely prosecuted for corruption acts. The likelihood of encountering demands for facilitation payments is low, nonetheless, companies should be aware that facilitation payments are illegal under Qatari laws.

Last updated: September 2016
GAN Integrity

Judicial System

The judicial system carries a low corruption risk for companies. Bribery and irregular payments are almost never exchanged in return for favorable judicial decisions (GCR 2015-2016). The constitution provides for an independent judiciary, but the judiciary is not completely impartial as all judges are appointed by the head of state (HRR 2015). Further, foreign nationals report being discriminated against in court cases in favor of Qatari nationals (ERCAS, Dec. 2013). Corruption cases involving well-connected persons never make it to the courts revealing entrenched favoritism and patronage networks dominating Qatari society (ERCAS, Dec. 2013). 

Companies perceive the courts to be quite efficient in settling disputes and challenging government regulations (GCR 2015-2016). Enforcing contracts in Qatar is less time-consuming than the regional average (DB 2016). Qatar is a member of the International Centre for Settlement of Investment Disputes (ICSID) and has accessed the New York Convention 1958 on the Recognition and Enforcement of Foreign Arbitral Awards.

Police

The police carry a low corruption risk for business in Qatar and business executives report that Qatari law enforcement officials are reliable (GCR 2015-2016). The government effectively investigates and punishes abuses and there were no reports on police abuse during 2015 (HRR 2015).

Public Services

Corruption risks in the public service are low. The high salaries of public officials coupled with the fear of deportation of officials from migrant communities have kept the occurrence of bribes and petty corruption to a minimum (ERCAS, Dec. 2013). In fact, business executives report that bribes and irregular payments are rarely exchanged in return for obtaining public utilities (GCR 2015-2016). The burden of government regulations is relatively low, yet inefficient bureaucracy still ranks as a problematic factor to doing business (GCR 2015-2016). Starting a business and obtaining a construction permit in Qatar is easier in comparison to Middle East and North African countries (DB 2016). 

Land Administration

Private ownership of property is protected by law and investors perceive that property rights are fairly protected in Qatar (GCR 2015-2016). Foreign-national land ownership is limited to certain conditions and to designated investment zones (BTI 2016). Registering property is easy in Qatar in comparison with neighboring countries; taking 13 days and seven procedures to accomplish (DB 2016).

Tax Administration

Companies contend with low corruption risks when dealing with the tax administration. Businesses report that bribes or irregular payments are rarely offered to tax officials (GCR 2015-2016). Qatar is the second easiest country to pay taxes in, and tax payments are considered to be among the least problematic factors when doing business in the country (PwC 2016). Qatari nationals are exempt from income and corporate taxes while company tax rates are the lowest in the world (PwC 2016). Foreign corporations operating in Qatar pay a 10% corporate tax rate, except in oil and gas operations, where the general tax rate is 35% (QH 2016).

Customs Administration

Companies face low corruption levels when trading across the borders of Qatar and report that irregular payments are rarely demanded in the process (GCR 2015-2016). Undocumented customs payments are reported to be rare, and the border administration is considered transparent (GETR 2014). The Qatari e-government portal Hukoomi provides all the necessary information concerning customs and port laws. The General Authority of Customs website is a one-stop shop for customs-related matters.

The average time required to import and export of goods is lower than the regional average (DB 2016).

Public Procurement

Companies dealing with public procurement in Qatar face moderate corruption risks. Although, bribes and irregular payments are rarely offered in return for obtaining public contracts and licenses, foreign companies still complain of a lack of transparency and of preferential treatment, or use of connections - known as 'wasta' (ICS 2016ICS 2014). Reportedly, companies must rely on intermediaries or agents with good political connections to participate in large public procurement tenders (ERCAS, Dec. 2013). Transparency concerns include uncertain tender criteria, improper notification or explanation to non-qualifying companies, irregularities in the award process and the inability to formally challenge awards (EG 2014). Government procurement regulations offer Qatari-bidders a 10% preference and Gulf Cooperation Council (GCC) bidders a 5% preference. Furthermore, preferential treatment is accorded to companies using local content in bids for government procurement (ICS 2016). 

A new procurement law entered into force in June 2016 rendering the procurement process simpler, speedier and more transparent (ICS 2016). The main aim of the changes brought to the procurement law is to bring its provisions in line with international best practices (White & Case, Jun. 2016). The new law mainly decentralizes procurement by abolishing the Central Tendering Committee and permitting each regulated government entity to create its own tender committee (White & Case, Jun. 2016). Dispute resolution over tenders is also decentralized to ensure that each dispute is assigned to a committee with the requisite technical know-how. 

Natural Resources

Companies should beware of corruption risks when operating in the natural resource and extractive industries. This is mainly owing to the lack of transparency as there are few published laws and regulations guiding Qatar's petroleum industry and a general lack of information on the legal framework governing the sector (NRGI 2013). Government agencies provide very little information on the legal framework governing natural resources. No supervisory or regulatory body oversees resource extraction or revenue management (NRGI 2013).

 Much of Qatar's economy depends on the production of oil and liquefied gas. The state-owned company Qatar Petroleum is wholly responsible for all the phases of the oil and gas industry in Qatar and signs production sharing contracts with private companies following direct negotiations (Latham & Watkins 2013, NRGI 2013). The government does not publish any information regarding contract terms or negotiations with oil companies and revenues from Qatar's natural resources are unknown (NRGI 2013). Likewise, audit mechanisms and public oversight over the sector are insufficient (NRGI 2013). 

Foreign businesses operating in the exploitation and development of natural resources and, energy and mining in Qatar are allowed to own up to 100 percent of the capital (ICS 2016). 

Legislation

The Qatari Penal Code, No. 11/2004 criminalizes extortionactive briberypassive bribery, bribing a public official and abuse of office. Private sector corruption is also criminalized under the Penal Code (United Nations Office on Drugs and Crime 2015). Bribery penalties for individuals include up to 10 years' imprisonment and a fine equalling the amount of the bribe (but not less than QAR 5,000). Penalties can be increased for offences involving certain public officials (ICS 2016). Money laundering is criminalized under the Anti-Money Laundering Law, No. 4/2010. Anti-corruption laws are enforced in practice (HRR 2015). Government officials are not subject to any financial disclosure laws and no public official disclosed assets or income in practice (HRR 2015). There are no laws in place addressing the protection of whistleblowers or NGOs with focus on anti-corruption (BTI 2016). There were reports of government corruption during 2015 (HRR 2015). Top government officials guilty of corruption are rarely prosecuted, if so, investigations are usually politically motivated (BTI 2016).

Qatar has signed and ratified the United Nations Convention Against Corruption.

Civil Society

Freedom of expression is guaranteed by the Constitution; however, journalists are subject to prosecution for criticizing the Qatari government, the ruling family, or Islam (FotP 2015). Defamation laws and broadly framed antiterrorism legislation also restrict the freedom of journalists (FotP 2015). Publications are subject to government licensing, and the government, the Qatar Radio and Television Corporation, and customs officers are authorized to censor domestic and foreign publications and broadcast media prior to distribution (FotP 2015). Qatar cybercrime law restricts freedom of speech online and offenders may receive penalties of up to three years' imprisonment and a fine of more than USD 130 thousand (FotP 2015). Online content is censored through the country’s sole, state-owned internet service provider (FotP 2015). In an effort to increase government transparency, the government of Qatar approved an Open Data Policy in late 2014. The policy compels government entities to release official information to the public, nonetheless, there are many exceptions to the law and implementation in general is unclear (FotP 2015). The media environment in Qatar is described as 'not free' (FotP 2015).

Civil society does not play a significant role in Qatar, and cooperation and coordination between the government and civil society is rather lacking (BTI 2016). Setting up NGOs requires approval from the Ministry of Labor and Social Affairs, which can reject these if it deems the organizations a threat to public interest (HRR 2015). Furthermore, establishing an NGO is extremely expensive and is burdened by red tape (BTI 2016). Qatar’s only associations are sponsored and run by either the government or by quasi-governmental organizations (BTI 2016). 

Sources

Topics: Middle East & North Africa