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Information on key security and political risks which UK businesses may face when operating in Qatar
1. Political and Economic
Qatar has transformed itself over the past two decades from a relatively unknown Gulf State to a prominent player on the world stage. Exploiting its significant oil and gas reserves, it has embarked on one of the largest and most ambitious infrastructure programmes in the world with projected spend of around £140bn to deliver its 2030 Qatar National Vision (focused on economic, social, human and environmental development) and the 2022 FIFA World Cup. Large-scale infrastructure projects include Lusail City and tram system, the three line, 81 station Doha Metro system, the New Hamad Port and major road construction.
Qatar’s economy is fundamentally strong but has been impacted by the fall in oil price and the ongoing blockade by Saudi Arabia, the UAE, Bahrain and Egypt. Economic growth is forecast at 2.5% in 2017. The Government is implementing reforms to tackle public spending and diversify the economy away from oil and gas, including through promoting the role of the private sector and SMEs.
The bilateral economic relationship is strong and growing. Bilateral trade flows have increased significantly in recent years and Qatar is a significant investor in the UK with government investments worth over £35 billion. In March 2017 the first Qatar-UK Business & Investment Forum was held in London and Birmingham. Led by both the UK and Qatari Prime Ministers, Qatar announced they would invest a further £5 billion in the UK over the next three to five years.
Despite rapid economic and social change, Qatar continues to attach great importance to traditional Arab and Islamic values that consider the family to be a central pillar of society.
The UK remains very concerned by the ongoing tensions in the Gulf. The Prime Minister, Foreign Secretary and other Ministers are engaging with our Gulf friends to encourage de-escalation and to get firmly behind Kuwait’s mediation efforts.
We are continuing to monitor the current situation closely and are actively engaging with UK businesses in the UK and the region.
The closure of borders between Saudi Arabia / UAE / Bahrain / Egypt and Qatar has so far impacted on the movement of people and goods for UK businesses operating in the region. Many UK companies have found work-arounds to ensure impact is kept to a minimum, but we are aware there are longer term concerns.
In discussions with regional counterparts, UK Ministers are making clear that finding a resolution to the current situation will be important to protect UK interests in the region, including those of British businesses.
The British Government supports the Kuwaiti Government mediation efforts.
Where appropriate, we advise affected companies to check for updates to the Foreign Office travel advice, speak to DIT representatives in the UK and the region, as well as continue to monitor wider media for updates on the situation.
Those affected may wish to contact their logistics service providers to understand what options may become available.
Under the leadership of His Highness Sheikh Tamim bin Hamad Al Thani, The Emir of the State of Qatar, the country plays an active role on the international stage. Qatar is a member of several international organisations, including the League of Arab States, the Gulf Cooperation Council (GCC), the Organisation of the Islamic Conference (OIC), the United Nations (where it was a member of the Security Council from 2005 to 2007), the Organisation of the Petroleum Exporting Countries (OPEC), and the Gas Exporting Countries Forum (GECF).
Information on political risk, including political demonstrations is available in FCO Travel Advice.
Qatar’s economy has been built on exploiting its significant oil and gas reserves. It remains strong but has been impacted by the falling oil price and the ongoing blockade by some of its regional neighbours. The Government is implementing reforms to tackle public spending and diversify the economy away from oil and gas, including through promoting the role of the private sector and SMEs. The blockade has accelerated these plans, and a range of reforms to improve ease of business are being explored.
The IMF released figures in October 2017 that forecasts growth of 2.5% in 2017, 3.1% in 2018 and 3.2% in 2019. This is lower than earlier estimates due primarily to the impact of the crisis, but is still among the strongest growth in the region. The main risks to Qatar’s economic outlook in the short-term are related to international oil price movements and delays or cost overruns to infrastructure projects.
For the 2017 budget (January to December), total revenue is forecast at $46.7bn (+9% on 2016) and expenditure at $54.5bn (-2% on 2016). This assumes an oil price of $45. This leaves a deficit of $7.8bn (around 4% of GDP), which is smaller compared to the forecast deficit in the 2016 budget of $12.8bn (around 8% of GDP) - Qatar’s first in 15 years. A post-blockade revision has not been issued by the government. A main focus of the budget is on delivering infrastructure projects for the 2022 World Cup and 2030 National Vision, as well as increasing the efficiency of public spending.
The UK and Qatar are key trading partners. Qatar is the UK’s third largest export market in the Middle East and North Africa region. British exports of goods to Qatar rose from £1.31 billion in 2013 to £2.13 billion in 2016. Exports included industrial machinery & equipment, electrical machinery, vehicles, luxury goods, foodstuffs and power generation equipment. The UK also exports a significant amount of services to Qatar, particularly finance, legal and consultancy. Qatar is a significant investor in the UK with investments worth over £35bn. Qatar also supplies 24% of the UK’s gas imports, so is important to the security of UK energy supplies.
2. Business and Human Rights
90% of the 2.6m population of Qatar is non-Qatari. Foreign workers are entirely dependent on their employer for residency rights. While the sponsorship (kafala) system was officially abolished in December 2016 and replaced with a contract-based system, employers still have a significant amount of power over their employees, including when some of them can leave the country and whether they can change employer.
In February 2015, the Emir of Qatar approved an amendment to the national labour law involving the payment of workers. Under the new Wage Protection System, companies are required to pay their employees through direct bank transfers, making it easier to scrutinise and document any late or non-existing payments. This law came into force on 2 November 2015 and 85% of workers are now paid this way. In February 2017, the government announced any company not taking steps to pay this way would be black-listed.
In October 2015, Law 21 was passed on the Entry, Exit, and residency of Foreign Nationals. The new law, which came into effect in December 2016, introduced a new contract-based system rather than a sponsorship system. Employers are still responsible for issuing exit permits for an employee to leave the country, but if an employer objects to the request for leave, the employee now has the right to appeal to a new government grievance committee. However further work is underway to further relax the rules around exit permits, with only some workers who have financial responsibility subject to these in future.
The former law governing No Objection Certificates (allowing employees to change employer within Qatar) meant that foreign workers could not return to work in Qatar for two years after their contract ended unless they had their employer’s approval. Employees are now able to change jobs at the end of their fixed-term contract (usually at least two years). Foreign workers with open-ended contracts are able to change jobs after five years. Workers may be able to change jobs before the end of the contract if permission is granted by the employer and the Ministry of Interior (MOI). New implementation laws have been announced in 2017, including that employees can change employer if their salary is regularly delayed.
Qatar is also tackling the payment of recruitment fees by employees to agencies in their country of origin. This binds employees into jobs for a certain amount of time, leaving them vulnerable to exploitation, delays of salary or bad conditions, and unable to change employers as they still owe money.
Accommodation for migrant workers, particularly construction workers, has come under significant scrutiny. The Qatari government is constructing labour villages for its workers to prevent abuses in this area, and has increased the number of labour inspectors to 390. They are empowered to make ad-hoc visits to work sites and accommodation to check facilities and to ensure safety procedures are being followed.
In November 2017, Qatar is due to sign an agreement on technical cooperation with the International Labour Organisation which will target key areas to improve the situation for migrant workers in the country.
Domestic workers do not fall under the Labour Law and are therefore not protected. Domestic worker legislation has been agreed by the Emir in October 2017 and is currently being passed into law. This should limit the number of hours worked per day and provide mandatory days off and holidays. This legislation is yet to come into effect.
As Qatar is considered a destination and transit area for human trafficking, the government opened the first shelter for victims of human trafficking in 2005. Qatar Foundation for Combating Human Trafficking was established in 2010.
In 2011 an anti-trafficking law was passed but so far no one has been prosecuted under it. The US Human Trafficking report in 2016 has maintained Qatar’s rating from the previous reporting year. While the Government of Qatar does not fully meet the minimum standards for the elimination of trafficking, the report assesses that it is making significant efforts to do so.
3. Bribery and Corruption
Bribery is illegal. It is an offence for British nationals or someone who is ordinarily resident in the UK, a body incorporated in the UK or a Scottish partnership, to bribe anywhere in the world.
In addition, a commercial organisation carrying on a business in the UK can be liable for the conduct of a person who is neither a UK national or resident in the UK or a body incorporated or formed in the UK. In this case it does not matter whether the acts or omissions which form part of the offence take place in the UK or elsewhere.
In the latest NGO Transparency International’s corruption perception index (CPI), Qatar is ranked third of all Middle East and North African countries.
2016: ranked 31 out of 176 countries
2015: ranked 22
2014: ranked 69.
For the ease of doing business, Qatar is currently ranked 83 out of 190 countries, seventh of all Middle East and North African countries. This is down from being ranked at 68 in 2016.
The Qatar Rule of Law and Anti Corruption Centre was inaugurated in December 2011. The centre was built as an independent organisation that works in partnership with the United Nations to strengthen the rule of law and fight corruption.
Read the information provided on our Bribery and corruption page.
4. Terrorism Threat
Read the information provided on our Terrorism threat page of FCO Travel Advice.
5. Protective Security Advice
The Centre for the Protection of National Infrastructure also provides protective security advice to businesses
6. Intellectual Property
IP rights are territorial, that is they only give protection in the countries where they are granted or registered. If you are thinking about trading internationally, they you should consider registering your IP rights in your export markets. Intellectual property policy in Qatar is led by the Ministry of Economy and Commerce. In June 2015, Qatar became the first GCC country to open a Patent Cooperation Treaty (PCT) Registration Office. The Office was inaugurated in a two-day workshop on PCT, hosted by the Ministry of Economy and Commerce and in collaboration with the World Intellectual Property Organisation (WIPO). This aims at making the process of international patent application filing easier and more efficient: by filing one international patent application under PCT, applicants can seek protection for an invention in 148 countries across the world.
Refer to the website of the World Intellectual Property Organisation’s (WIPO) Qatar webpage for further information on intellectual property in Qatar; and the information provided on our Intellectual Property page.
7. Organised Crime
Read the information provided on our Organised Crime page.