UAE plot to wage financial war on Qatar revealed

A United Arab Emirates plan to attack Qatar’s financial system has been revealed in a folder of an email account belonging to the UAE ambassador to the US, Yousef al-Otaiba.

The Intercept, a US-based investigative website, obtained the folder and exposed the plot, which involves an attack on Qatar’s currency “using bonds and derivatives manipulation”.

The UAE also aims to increase Qatar’s debt by controlling its “yield curve”, according to the report.

According to the Intercept, Luxembourg’s private Banque Havilland – owned by the family of Britain’s controversial financier David Rowland – developed the plan for the UAE.

Its objective is to push Qatar’s economy to collapse, reduce the value of its bonds and increase its credit cost, ultimately creating a currency crisis that drains the country’s reserves.

PR campaign

The document further reveals that while weakening Qatar’s economy, the UAE would also launch a PR campaign to draw attention to this development as part of its campaign to have Qatar eventually stripped of its role of being the host of the football World Cup 2022.

The new project comes amid – and, if implemented, would escalate – a regional crisis that reached new heights in June, when the UAE and Saudi Arabia led a bloc of Arba countries in blockading and cutting off diplomatic relations with Qatar.

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Rex Tillerson, US secretary of state, recently accused the blockading countries of intransigence, but President Donald Trump has largely taken the opposite approach, emboldening Saudi Arabia and the UAE at the expense of Qatar, which is home to one of the largest overseas US military bases in the world.

The Intercept report says “the current pressure Qatar’s currency is under as a result of an ongoing blockade imposed by the UAE means those direct, overt steps may be more effective economic sabotage than anything the slides outline”.

According to the website, Roland has long-established ties with UAE’s leadership, particularly the crown prince of Abu Dhabi, Sheikh Mohammed bin Zayed Al Nahyan.

Banque Havillan is currently working on a new financial institution in cooperation with the UAE sovereign wealth fund Mubadala, according to contracts and correspondence obtained by the Intercept outlining the terms of the deal.

The project is separate from the Qatar operation, but it reflects the close relationship between the bank and the UAE, according to the Intercept report.

The Qatar debt project would be grandiose in its ambitions.

“Control the yield curve, decide the future,” reads the planning document, referring to a standard financial-industry graph showing a country’s borrowing costs for debt that is due at different dates.

Financial manipulation

The height and shape of the yield curve is thought to be a reflection of how healthy an economy is and influences what financing options are available to a country.

Targeting a nation’s economy using financial manipulation would be a dramatic break from traditional norms of diplomacy and even warfare.

The Intercept reached Edmund Rowland, David’s son and CEO of the UK branch of Banque Havilland, at a mobile phone number listed in internal company documents obtained by The Intercept and asked about the status of the plan to short Qatar on behalf of the UAE, referencing the document. “We’ve never done anything,” Rowland said.

Asked for more details, Rowland responded “I can’t make any comment,” and hung up.

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After the call with Rowland, Herbert Kozlov, a lawyer with the firm Reed Smith, reached out to The Intercept and said on behalf of the bank that it had not traded in Qatari bonds or credit default swaps, the financial products the plan proposed to use.

“Banque Havilland does not trade in bonds, securities, CDS, or any other instruments of Qatar and it has no plans to do so,” Kozlov said, reading a statement. As for the plan to take down Qatar, he said: “The bank is a prestigious private banking group and will not be drawn into or make comments on what are political storylines.”

The metadata of the slide deck obtained by the Intercept indicates Vladimir Bolelyy, an analyst with Banque Havilland, as the creator.

A call by the Intercept to Bolelyy’s receptionist was rebuffed. “He’s been told by Herb Kozlov not to contact this company,” said the receptionist, referring to the Intercept.

The Intercept had not previously told Kozlov that Bolelyy was listed as the author of the document.

All about football

While the UAE scheme itself would be an ambitious undertaking, the goal is ultimately petty: It is about football.

One of the plan’s stated aims is forcing Qatar to share football’s 2022 World Cup, according to the outline.

The strategy laid out in the document calls for using a public relations campaign to point the international football body FIFA to Qatar’s dwindling cash reserves, making a case that the country cannot afford to build the necessary infrastructure.

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The blockade is already raising prices for infrastructure supplies and recruiting top officials to work in Qatar has been difficult, the slides point out.

The outline concludes with the hope that the economic war will make it harder for Qatar to continue building stadiums and other assets needed to host the games: “If Qatar now spends its reserves on protecting the currency and domestic credit markets, there is less dry powder to fund the infrastructure spending.”

The UAE, according to the document, hopes to make a push for the Gulf Cooperation Council (GCC) to host the global sports event across the member nations, rather than in Qatar alone.

On October 20, several weeks after the Intercept first obtained the document outlining the plan, a well-funded Twitter campaign launched with the goal of taking the World Cup from Qatar, complete with a slickly produced video.

To read the full report in The Intercept, click this link