Law enforcement challenges in hawala‐related investigations

Abstract

Defines hawala, which in Arabic means “transfer”; what distinguishes it from other fund transfer methods is its informality, reliance on trust and networks, and lack of records. Describes how it can be used to finance terrorism and launder money, evade tax and so on. Discusses the many problems for law enforcement arising from the lack of records in hawala, or sometimes an excess of confusing records, and the mix of various businesses which tend to coexist with hawala transactions; also linguistic issues, cultural and legal or administrative differences between communities and countries, and “benami” accounts, which are false name or nominee accounts often accepted in ethnic groups that also engage in hawala. Concludes that the success of law enforcement efforts to solve cases depends on international cooperation, but that this is not always forthcoming; excessive zeal may sour working relationships, and it may not be easy even to know whether policies are working.