UK’s Hawala providers warned about people smuggler clients

Police visit businesses as hawala is increasingly used by criminals and migrants

National Crime Agency officers visiting a hawala provider to warn against involvement with people smuggling. Photo: NCA

Dozens of businesses involved in hawala money transfer have been visited by UK police to warn them about becoming involved with people smugglers.

The National Crime Agency (NCA) said it went to 44 premises across the UK, along with tax officials, in response to hawala brokers, who are classified as hawaladars, being increasingly linked to people smuggling crime. Hawala is a system that operates on a basis of transfer of value without actual movement of money and it relies heavily on trust between hawaladars and their customers, and within the networks themselves.

Asghar Gheshalghian was convicted of laundering money for people smuggling networks using the hawala system. Photo: NCA

Known as hawala providers in the UAE, they are used by migrant workers to send remittances back home. UK authorities fear they are exploited by both people smugglers and migrants to arrange payments out of sight of law enforcement.

The move against abuse of the hawala system is the latest phase of government action to reduce small boat crossings across the English Channel and cut migration. Alex Murray, the NCA's Director Threat Leadership, said immigration crime is a “deadly threat” that led to more than 70 deaths in the Channel last year alone and that “criminal gangs are behind these crossings”. Mr Murray said the agency's 70 continuing investigations into people smuggling networks include going after those “who enable, support and financially benefit from this criminal activity”.

“Money service businesses provide an important service, and the vast majority are compliant with regulation,” he said. “However, it is absolutely key that all those who work in this sector remain vigilant, report suspicious activity, and play their part to stop this horrific crime. Those who don’t will be pursued and prosecuted as harshly as those directly involved in organising the crossings.”

Prime Minister Keir Starmer has instructed law enforcement to “smash the gangs” and tackle people smugglers using the same tactics as are used in dealing with terrorism.

National Crime Agency officers speaking to one of the dozens of hawaladars they visited. Photo: NCA

As well as arrests in Iraq’s Kurdistan region under an agreement with the Iraqi government, the UK government has promised to impose sanctions on people smugglers and those who supply them with boats. But any effort to deal with financing of people smuggling will have to deal with criminals using the hawala system.

The most common way hawala works is that a person wanting to transfer money to a person in another country goes to a hawaladar to deposit the funds, along with a commission. The person is given a code or a password to pass on to the recipient of the funds. The hawaladar tells a trusted counterpart in the country where the money is to be transferred to hand over the cash on presentation of the code or password.

Using messaging apps, migrants can use the system to finance their journeys across thousands of miles without having to carry cash with them, while people smugglers can hide their profits and recycle them into legitimate businesses. Hawaladars depend on a steady stream of business and many operate money transfer as part of other businesses. For those involved in people smuggling this also acts as cover.

Dilshad Shamo and Ali Khdir used the hawala system to finance their people smuggling operation. NCA

Iranian hawaladar Asghar Gheshalghian was jailed in the UK for eight years after being convicted of running an unregistered money services business that served people smuggling networks. Gheshalghian used a carpet-selling business as a front for his part of a network of bankers transferring money using the hawala system.

Kurdish people smugglers Dilshad Shamo, 41, and Ali Khdir, 40, who pleaded guilty to organising people smuggling at the end of last year, used the hawala system to take payments from migrants and arrange for smugglers to be paid. His conviction came after Hewa Rahimpur, who also acted as a hawala banker for people trafficking gangs and smuggled 10,000 migrants across the English Channel in small boats, earning up to £260,000 ($329,650) per trip, was sentenced to 11 years in a Belgian jail.

Louise MacDonald, deputy director of economic crime at HM Revenue and Customs Fraud Investigation Service, said that the “vast majority” of hawaladars want to avoid the people smuggling trade. “It is absolutely key that all those who work in this sector remain vigilant, report suspicious activity, and play their part to stop this horrific crime,” she said. “Those who don’t will be pursued and prosecuted as harshly as those directly involved in organising the crossings.”