Criminals are exploiting informal money transfer services in the
UK to launder an estimated £2 billion annually, concealing the
proceeds of serious organised crime that harms communities.
HMRC is urging businesses that offer these services – which help
diaspora communities send money to relatives abroad – to register
for anti-money laundering supervision to protect themselves from
criminal exploitation.
Hawala is one of the most common types of these services. It lets
people send money abroad without cash physically crossing
borders. Instead, operators (Hawaladars) use an informal
trust-based network to ensure the money reaches family members in
countries where regular banking is limited.
All businesses providing these services must register with HMRC
to operate legally. Registering helps ensure they have proper
controls to stop criminals exploiting their services.
Businesses can protect themselves by finding out more and
registering for anti-money
laundering supervision on GOV.UK.
, HMRC's Deputy Director
for Economic Crime, said:
“Informal money transfer networks, like Hawala, enable people to
support family members in parts of the world where conventional
banking is limited. These are vital services that we want to
protect from criminal exploitation.
“When criminals launder money through these networks, it funds
serious organised crime that directly harms the very communities
these services support.
“By registering with HMRC, businesses can safeguard their
services, protect their communities and operate within the law.”
Businesses that fail to register risk civil penalties, criminal
prosecution and closure.
HMRC has launched a campaign running until the end of this month,
using community radio broadcasts, digital advertising and local
outreach to help operators understand their legal obligations.
The campaign follows joint visits by HMRC and the National Crime
Agency (NCA) to more than 40 premises last month, helping
Hawaladars understand their legal responsibilities.
Further information
In a typical Hawala transaction, an individual gives money to a
local Hawaladar, who provides a code. The Hawaladar contacts
another Hawaladar in the destination country and shares this
code. The sender gives the code to their recipient, who presents
it to the Hawaladar in their country to collect the funds. The
two Hawaladars settle their accounts separately later – they
track money owed between them and balance these through
offsetting future transactions or exchanging goods and services.
A press release about joint visits by HMRC and the NCA last month
can be found
here.
More information about money laundering through Informal Value
Transfer Systems can be found in the latest
National Risk Assessment of Money Laundering and Terrorist
Financing.
The HMRC campaign will run until 31 March 2025, using targeted
advertising across community radio, digital channels and search,
to reach businesses directly.
