presentatie hawala banking english version
TRANSCRIPT
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“HAWALA-BANKING”
Geert DELRUE
Detective Commissioner
Belgian Federal Criminal Police
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TYPOLOGY
HAWALA
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Contents of the exposé
HAWALA-WHAT
HAWALA-WHO
HAWALA-HOW
HAWALA-WHERE
“HAWALA-BANKING”
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HAWALA-WHAT
OTHER DENOMINATIONS
„Hawala’ means ‘transfer’ – ‘certificate’ ‘Hundi’ in Pakistani and means ‘trust’ ‘Fei-chien’ in Chinese and means ‘flying money’ ‘Padala’ in Filipino ‘Nging sing kek’ ‘PHOW kuan’ ‘Chiao hui’ ‘Hui kuan’ ...
“HAWALA”
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HAWALA-WHAT
OTHER DENOMINATIONS
underground banking informal money transfer system ethnic banking informal financial services informal value transfer system alternative remittance system …. typology for money laundering
“HAWALA-BANKING” Western Union Ad Warning
Potential Hawala Users
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HAWALA-WHAT
ORIGIN:
traditional way of banking, from Asia and the Middle-East, originating from silk route between Asia and Europe
existed already before our actual Western system its pratical use is mainly for legitimate business
and innocent transactions (personal investments, traveler costs, medical costs, education, financial support of family in the homeland, ….. BUT
is also misused
“HAWALA-BANKING”
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HAWALA-WHAT
“HAWALA-BANKING”
DESCRIPTION
Hawala is an informal money transfer system and a basic means of transferring sums of money through the whole world in a safe and paperless way
The Eastern Western Union
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TYPOLOGIE
HAWALA-WHAT
TWO SORTS:
1. Hawala as supplemental activity by merchantse.g. telephone shops, food supply shops,
nightshops, …
2. Hawala as a part from professional informal bankers
“HAWALA-BANKING”
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MTOMTO
beneficiarysender
…and vice versasender
sender beneficiary
beneficiary
Phone-house,
fax, gsm
“call houses”,
fax, gsm
The UK-Nigeria Remittance Corridor The U.S.-Guatemala Remittance Corridor The Netherlands-Morocco Remittance Corridor The Netherlands-Suriname Remittance Corridor The Germany-Serbia Remittance Corridor The Italy-Albania Remittance Corridor The Canada-Vietnam Remittance Corridor The U.S.-Mexico Remittance Corridor
TYPOLOGY
HAWALA-WHAT
CORRIDORS
CORRIDORSUnderground financial centra
F.i. Karachi, Dubai
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TYPOLOGIE
HAWALA-WHAT
LEGAL
financial support of family
legal trade
payment of ZAKAT
...
Which payments?
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ILLEGAL
capital flight
tax fraud (import duties, excise duties, income tax, …
terrorism-financing
evasion of currency restrictions
drugs- and human-smuggling
evasion of international sanctions and embargos
payments in the informal economy
….
TYPOLOGIE
HAWALA-WHATWhich payment?
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Which customers?
foreigners
illegals
foreign people who have a legal status, but prefer familiarity and efficiency
people who got money from illegal activities
etnicity: Nigerians, Pakistanis, Afghans, ...
international organisations and NGO`s
immigrant-workers
…
TYPOLOGY
HAWALA-WHO
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TYPOLOGY
HAWALA-WHOHAWALADARS
foreigners
money-transmitters (bankers)
usually merchants: call-houses, traveling agencies, jewelers, food stores, …
supplementary activities: change of currency, money lending
…
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Characteristics- voordelen?
currency / payment in euro
efficiency / quickness
user-friendly
reliable
no legal restraints, e.g. KYC
family, friends, more social control
mistrust of formal authorities in the homeland
low transaction costs / favorable exchange rates
…
TYPOLOGIE
HAWALA
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Charateristics – Misuse - RISCS?
small risc of getting caught by the autorities
no obligation for identification –anonymity
no paper-trail
difficult detection (no physical money remittance)
trust
...
TYPOLOGY
HAWALA
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HOW DOES IT WORK?
Sender A, banker A’, banker B’, beneficiary B• A gives 100 euro to A’, with the request to transfer the money to B• A’ calls in B’ and B’ pays the sum to B
(euro or local currency)• B’ has a credit on A’: solution through balancing,
by:a) transactions to and fro, b) physcial correction,c) flow of goods from B’ to A’
Balancing: besides moving also changing
TYPOLOGY
HAWALA-HOW
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Scheme?
SENDER A €100HAWALADAR A’
BELGIUM
CASH COURIER and/or BALANCING
HAWALADAR B’ HOME-LAND
BENEFICIARY B €90
owner transfer services
CASH COURIER
COURIERCOURIER
telephone, fax, e-mail, …
other “hawaladar”
€ 95
COURIERCOURIER
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bank of the
sender
central bank
SWIFT
Money-transfer (wire transfer)
through
the bank (correspondent banking) SWIFT
bank of the
beneficiary
sender beneficiary
TYPOLOGY
HAWALA-HOWTRANSFER
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TYPOLOGYHAWALA-HOW
family/sender
beneficiary/family
Paperless
Difficult detection
Based on trust
Posibble in both ways
$
$
spoken exchange(sum, transaction code
usually no money)
Hawaladar
Hawaladar
Example of a “one way” transaction
HOW DOES IT WORK?
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BALANCING
Dependent of some elements:
nature of the client
quantity of the money
relation with the customer
background activities of the hawaladars
TYPOLOGIE
HAWALA-HOW
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BALANCING MONEYSTREAM TO AND FRO
Ways of getting the money to the homeland
‘cash couriers’ (professionals or as a favor) –physical transport
hiding of the money in goods, which are shipped
transfer through the formal banking system
mixture of legal and illegal funds
through trade in goods, such as…
…
TYPOLOGIE
HAWALA-HOW
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BALANCING VIA TRADING IN GOODS
2d hands clothing
cars and working tools
agrarian products
electronics
package materials
animal food
beer
goods with a great value, e.g. diamonds
….
TYPOLOGY
HAWALA-HOW
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TYPOLOGY
HAWALA
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Afghanistan
Dubai
TYPOLOGY
HAWALA
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WAYS OF KEEPING THE BOOKS
TYPOLOGY
HAWALA-HOW
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WAYS OF KEEPING THE BOOKS
TYPOLOGIE
HAWALA-HOW
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TYPOLOGY
HAWALA-HOW
WAYS OF KEEPING THE BOOKS
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Characteristics of “terrorism financing”
Transactions by terrorists are usually unique and
with large amounts of money (aid by states,
donations from sympathisants, legal economic
activities and criminal activities) and the use of
underground networks which play an essential
role in their activities
This in contrast with other payments by workers-
migrants which happen more often to family and
in smaller amounts
TYPOLOGY
HAWALA-HOW
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TYPOLOGIE
HAWALA
Hawala is an informal money transfer system, a
means of sending money through the whole
world in a safe and paperless manner
Islamic Banking carried out as described in the
Koran, is used for legal money collection and
payment. This is particularly in the case of
ZAKAT FUNDS
Characteristics of “terrorism financing”
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Zakat is a form of giving
charity for the benefit of the
poor and the preach (learning)
of the Islam
According to the Koran every
Muslim must give 2,5% of his
fortune, on top of what he
needs himself
“Take from their wealth a portion for charity,
in order to clean them thereby, and sanctify them.”
Giving Bread
and Milk
ZAKAT
TYPOLOGIE
HAWALA
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ZAKAT
Zakat is given at the beginning
of the month of „Muharram‟,
which indicates the beginning
of the moon newyear
Zakat is one of the five
keystones of the Islam and is
considered as the basis of
social justice and prosperity in
the Muslim-world
Ukrainian mosque
Built with Zakat
funds
TYPOLOGY
HAWALA
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HAWALACONCLUSION
POINTS OF INTEREST:
- during a house search : fax-, telephone-
and portable-accountants
- separate notes of bookkeeping
- outprints from fax-traffic
- maybe already bookkeeping on the
computer or e-mail-traffic
- …
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