Qatar filed two lawsuits in London and New York on April 8, seeking to recover billions lost from a “financial attack” carried out against Doha in 2017.
Qatar filed two lawsuits in London and New York on April 8, seeking to recover billions lost from a “financial attack” carried out against Doha in 2017. These lawsuits are against three entities: Banque Havilland, a private Luxembourg-based bank; First Abu Dhabi Bank (FAB), the United Arab Emirates (UAE)’s largest lender; and Riyadh-based Samba, a leading Saudi bank.
According to allegations in the lawsuits, Banque Havilland submitted “fraudulent quotes” to foreign-exchange platforms in New York with the goal of disrupting indices and markets in locations where there are significant Qatari assets and investors. They also allege that FAB and Samba “engaged in financial market manipulation.” The official Qatari government statement lacked further detail regarding the specific alleged illegal conduct by FAB and Samba. Banque Havilland has denied the accusations, while FAB and Samba have not yet officially responded to the lawsuits.
These are not new accusations. Shortly after the Gulf Cooperation Council (GCC) crisis broke out in May/June 2017, culminating in Saudi Arabia, the UAE, and Bahrain severing ties with Qatar, both Saudi Arabia and the UAE were accused of waging “financial warfare” against Qatar. Riyadh and Abu Dhabi’s alleged aim was to tank Qatar’s economy. In November 2017, reports emerged that Banque Havilland had devised a three-stage plan to undermine confidence in Qatar’s economy through bond and derivatives manipulation designed to create an illusion of the Qatari economy crumbling. Financial analysts expressed amazement at the grandiose nature of the alleged plans which, if they are found to be based in fact, would indicate just how far individuals within the blockading states were prepared to go to pressure Doha to submit to their will.
The family of controversial British financial mogul David Rowland owns Banque Havilland, which maintains historic links to the UAE.
The family of controversial British financial mogul David Rowland owns Banque Havilland, which maintains historic links to the UAE. Notable is the fact that members of the Rowland family are named in the Soccer Leaks scandal involving Manchester City (owned by the Abu Dhabi United Group) and attempts to evade Financial Fair Play rules. Banque Havilland maintains an office in Dubai. It reportedly considered acquiring the troubled Swiss-based Falcon private bank from Mubadala, an Abu Dhabi government-owned investment and development fund, in 2017, but pulled out after conducting due diligence.
In October 2018, the links between Rowland and Mubadala deepened with the establishment of the Anglo-Gulf Trade Bank, a joint venture between Mubadala Investment and AGTB Holding, a Rowland family-controlled company. Headquartered in Abu Dhabi, Rowland’s son, Edmund, became the CEO of Anglo-Gulf, which described itself as “the world’s first digitally-enabled, data-driven” trade bank.
The Saudis and Emiratis’ alleged efforts to devalue Qatar’s currency resulted in Doha having to liquidate approximately $3 billion in U.S. Treasury bills and notes, as well as tap into more than $40 billion in its foreign reserves to support the Qatari economy during the first months of the crisis when the emirate’s currency came under much pressure in the offshore market.
Although Qatar, which has over USD 300 billion in reserves, had the financial resources to absorb this alleged financial attack, officials in Doha are determined to pursue justice and hold all entities responsible for their role in manipulating its currency.
Qatar’s strategy of turning to international bodies, including the International Court of Justice (ICJ), International Civil Aviation Organization (ICAO), and the World Trade Organization (WTO), to hold the blockading states accountable has been key to Doha’s approach of taking its grievances over the siege to bodies of international law. Qatar is hopeful that the lawsuits filed in London and New York will produce results favorable to Doha, similar to the ICJ’s July 2018 ruling finding some of the UAE’s actions against Qatar throughout the GCC crisis to be in breach of Articles 1 and 5 of the International Convention on the Elimination of All Forms of Racial Discrimination.
These foreign exchange manipulation cases raise major questions about the weaponization of financial institutions in international relations. The manipulation of local currency and bond markets through “spoofing” (coordination of fabricated price quoting) and “wash sales” (crossing transactions) constitutes a form of financial warfare that the Saudis and Emiratis allegedly embraced when seeking to squeeze Doha in 2017.
Qatar’s filing of these two lawsuits underscores Doha’s determination to hold its neighbors to account for actions it believes were taken at the start of the blockade in 2017.
Qatar’s filing of these two lawsuits underscores Doha’s determination to hold its neighbors to account for actions it believes were taken at the start of the blockade in 2017. They also reveal to the world further details of the anti-Qatar campaign as the two-year anniversary of the blockade approaches with seemingly no resolution in sight. For Riyadh and Abu Dhabi, this forex manipulation case may ultimately serve to further tarnish both of their images internationally depending on how the courts rule. This will especially be so if Qatar’s investigation into the alleged “financial attack” of 2017 results in more lawsuits being filed against additional Saudi Arabia- and UAE-based/linked banks and exposure of additional information about the blockading states’ campaign against Qatar.
A win for Qatar in these lawsuits would serve to strengthen Doha’s narrative about the emirate being the victim of aggression, including financial warfare, on the part of its immediate neighbors. Such an outcome would further help Qatar in its efforts to convince actors around the world that Doha has suffered from a grave injustice throughout the blockade, and reinforce the perception that Qatar has responded to unprecedented direct pressure through recourse to international arbitration and the rule of law.