Hawala, How To Avoid Prison

Hawala is an overused term given to money transfer services outside the normal clutch of banking facilities – comprising well known names such as Barclays, Lloyds and HSBC. Hawala does however account for many £100 billions of money transfers around the world each year.

A Legitimate But Abused System

Every bank system in the world can be used by crooks. Substantially every case that I have considered has involved scrutinising bank statements from some well known bank or another. However, because Hawala is favoured by many cultures from around the world where financial transactions are treated informally and financial frameworks are less robust, it has become a prime target for organised money laundering organisations and particularly as a means of moving UK criminal cash into the global financial system.

The problem is not so much with the Hawala agents in the UK who properly register their business with the UK authorities and comply with appropriate anti-money laundering regulations (in the same way as do Barclays and Lloyds). The problem lies with criminals who ignore the regulations and set themselves up as agents for incoming money transfers that they settle on the unsuspecting recipient with cash collected from the criminals.

The money that is being sent from abroad comes from legitimate sources, but is passed to the organised criminal gangs facilitating the international transfer, thus balancing the books.

Starts Off Legal – Ends Up Criminal!

Depending on which way you look at it, legitimate funds end up being settled by criminal cash, or criminal cash has been launderered into clean funds. Herein lies the problem. The local Hawala agent abroad is not regulated, but unlike in the UK will be advertising his services freely with the authorities turning a blind eye. I have dealt with cases where money is being sent from countries such as India or Pakistan where Hawala is actually illegal, by customers that have included solicitors, estate agents and large international PLCs.

Therefore the biggest headache for the UK authorities is the proliferation of a huge money laundering industry operating under the apparent umbrella of Hawala that seeks to find unsuspecting customers sending money to the UK where the value is paid to the equally unsuspecting recipients as criminal cash. Such is the problem that it becomes difficult to separate the guilty from the innocent, when the innocent are using a system open to such abuse simply because it is inherent in their culture shy away from a process regulated by respective governments and use informal cash based systems. 

So Can You Avoid Jail?

Sending your money abroad is simple. Find a registered Hawala agent in your locality and let them take care of the transaction. However, if you bring money into the UK, you have to be more careful to use an agent who is registered properly in the foreign country and can be trusted not to enlist the services of an international money launderer to facilitate the transfer. In some countries this is easier said than done, particularly where Hawala is illegal but is used freely because the authorities turn a blind eye.

This year has seen a big uplift in Hawala cases handled by Mark Jenner & Co Limited, six new cases in the first month alone! They range from pure money laundering (using Hawala as an excuse) to unsupecting recipients of funds from abroad who unwittingly used the services of unregistered Hawaladars.

About Mark Jenner

Mark Jenner is an experienced forensic accountant specialising in fraud and white collar criminal matters. He provides independent financial investigation and expert accounting witness services to police forces, fraud regulators and criminal defence lawyers, also providing assistance and solutions to organisations embroiled in financial disputes.

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