Qatar has asked U.S. regulators to investigate the U.S. subsidiary of the largest bank in the United Arab Emirates, accusing it of “bogus” foreign exchange deals designed to harm its economy as part of a blockade by Gulf neighbours.
The Central Bank of Qatar’s law firm has written a letter to the U.S. Treasury asking it to investigate NBAD Americas, the U.S. subsidiary of First Abu Dhabi Bank (FAB), which is majority state-owned.
In a second letter, the lawyers – Paul, Weiss, Rifkind, Wharton & Garrison – asked the U.S. Commodity Futures Trading Commission (CFTC) to investigate possible manipulation of Qatar’s currency, the riyal.
The request for an investigation deepens the diplomatic crisis that erupted in June when Saudi Arabia, Egypt, the United Arab Emirates (UAE) and Bahrain imposed an economic boycott on Qatar, accusing it of supporting Islamist militants and Iran.
“We believe NBAD has participated in an extraordinary and unlawful scheme to wage financial warfare against Qatar, including through the manipulation of Qatari currency and securities markets,” said the letter to the U.S. Treasury dated Feb. 26, which has been seen by Reuters.
“These actions should be halted immediately, and we ask that you investigate whether NBAD has directly or indirectly supported the manipulation of Qatar’s markets, including through NBAD America’s dollar-clearing or correspondent banking services in the United States,” the letter said.
FAB, which was created from the merger of First Gulf Bank and National Bank of Abu Dhabi last year, denied it had tried to manipulate the riyal.
“FAB conducts its business in accordance with the highest professional standards and complies with the laws and regulations of the jurisdictions in which it operates. FAB categorically refutes these rumours,” it said in a statement.
“FAB maintains strong working relationships with regulators across the globe and continually engages in constructive dialogue to ensure full compliance with the latest legal and regulatory requirements,” it said.
The UAE government did not immediately respond to a request for comment.
A Qatari government spokesman confirmed the letters had been sent to U.S. regulators but declined to comment on their content. New York-based law firm Paul, Weiss declined to comment.
The U.S. Treasury and CFTC did not immediately respond to requests for comment.