VIII.  TRADE AND PROJECT FINANCING

  The Central Bank of Qatar was established by Law No. 15 for the
  year 1993 to handle functions previously administered by the
  Qatar Monetary Agency (QMA), which, in its turn, was
  established in 1973.

  The Central Bank's major responsibilities include issuance and
  redemption of the country's currency - the Qatari Riyal (QR).
  It also controls the country's monetary policy and monitors the
  banking system.  Moreover, the Central Bank of Qatar regulates
  interest rates on Qatari Riyal funds, which are closely aligned
  to the U.S. dollar interest rates.

  There are currently 14 commercial banks operating in Qatar.
  These consist of six Qatari, two Arab and six foreign banks.  A
  list comprising all banks and number of branches is available
  at the end of this chapter.

  Qatar has no foreign exchange restrictions. The current banking
  regulations permit all usual types of commercial banking
  operations, including financing of trade operations and local
  development projects.

  Total assets of all banks operating in Qatar was estimated at
  QR 28.5 billion (US$ 7.7 billion) in 1993.  Qatar's imports of
  various kinds of goods were estimated at about US$ 2 billion in
  1993.  Almost all import transactions are controlled by
  standard letters of credit (LC's) processed by local banks and
  corresponding banks in the exporting countries.  Almost all
  local merchants in Qatar make use of the overdraft facilities
  provided by banks to process their import operations.  Most
  banks in Qatar provide short term credit facilities of up to 75
  percent of LC values.

  According to guidelines issued by the Central Bank of Qatar,
  the local banks should give priority to local individual or
  public development projects in their project finance
  operations.  The Central Bank also discourages local banks from
  financing foreign stock market operations.

  The current interest rates charged by the banking system on
  general credit facilities are very much in line with interest
  rates prevailing in the international markets.   In addition to
  the usual insurance, foreign firms operating in Qatar,
  including those of the 49-51 percent equity participation, are
  required to provide guarantees signed by their Qatari
  agents/sponsors to be able to have access to credit facilities
  from the local banks.

  In the absence of governmental finance programs for exports,
  banks in Qatar continue to be the main source of finance.  In
  recent years, Qatar has witnessed the establishment of two
  Islamic banks.  Based on profit sharing with customers,
  financing provided by Qatar Islamic Bank and Qatar
  International Islamic Bank covers products and projects in
  Qatar and other Islamic countries.

  In the insurance field, there are nine companies operating in
  Qatar, five of which are foreign owned.  Qatar Insurance
  Company has the lion's share of the market and manages the
  Government's insurance business.  The Overseas Private
  Investment Corporation (OPIC) Agreement was approved in March
  1989.  It was first submitted in October 1984.  To date, only
  one U.S. firm, involved in the Phase I development of the North
  Gas field project, has bought the OPIC insurance for risk of
  convertibility and war.   Other U.S. firms have expressed
  interest in OPIC coverage for future projects involving
  subsequent phases of the development of the North Gas Field.

  U.S. firms interested in seeking finance for products or
  projects in Qatar may wish to check, through their local
  agents, with leading banks in Qatar, viz., Qatar National Bank,
  Commercial Bank of Qatar, Doha Bank Limited, and Al-Ahli Bank.
  Although there does not seem to be any instance  of the U.S.
  Exim Bank having financed any U.S. products destined for Qatar,
  U.S. firms are urged to bring their financing matters to the
  Exim Bank.  There are no restrictions on the Exim Bank's
  finance operations in Qatar.

  The development of Qatar's North Gas Field looms over all
  projects in the country.  Currently in progress, Qatar's
  Liquefied Natural Gas industry is, in fact, a product of
  Japanese financing programs.  As mentioned elsewhere in this
  report, Qatar LNG Company (Qatar Gas) was recently awarded
  finance packages from various private Japanese banks and the
  Japan Development Bank worth well above US$ 2.5 billion.

  U.S. firms considering entry into Qatar's oil and gas industry
  should submit carefully studied competitive finance packages.
  This condition is likewise applicable to the development
  projects such as the new Doha International Airport.