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.
Mark Jenner is often asked to explain the Hawala process to the Court, to trace funds associated with Hawala to their mostly legitimate sources and to unpick money laundering allegations surrounding the massive global money transfer systems that are often referred to as Hawala.
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 customer 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 laundered into clean funds. Herein lies the problem. The popular local Hawala agent abroad may not be 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 respected 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. This is simply because it is inherent in their culture to shy away from a process regulated by respective governments in preference for informal cash-based systems.
So Can You Avoid Jail or Confiscation?
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 a bit 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.The cases range from pure money laundering (using Hawala as an excuse) to unsuspecting recipients of funds from abroad who unwittingly used the services of unregistered Hawaladars.