Special investigation: Hunting trafficking’s Kurdish big boss
The current UK government loves holding summits. This week has been marked by another one, devoted to organised immigration crime.
Ministers, officials and law enforcement agencies from more than 40 countries will be in attendance. Along with the logistics of the trade – attracting the migrants, sourcing the boats, engines and equipment used – a key item for discussion will be finance. Here, the hawala underground banking system will feature prominently. Already, hawala is being spun in the press as the target of a crackdown, as if it represents a new and hitherto unknown threat.
You wonder what has taken the authorities so long – to chase the gangs and with them, the money transfer methods they use. At their heart is hawala. The National recently produced compelling and frightening analysis highlighting how a seemingly ordinary car wash in Caerphilly, southern Wales, was central to a sophisticated, clandestine international people smuggling network.
They disclosed the link between money exchange shops in Iraq's semi-autonomous Kurdish region and the Fast Track Car Wash. The latter was used as cover for an extensive criminal operation. The police made arrests and seized material, including the names of outlets in Ranya, 4,800km away. Thousands of dollars were being transferred around the world to and from these premises to Caerphilly without any formal documentation or trace.
That is what hawala means, "transfer". It relies entirely on informality and trust, on the production of an agreed code, usually an innocuous token – half a matchstick or a torn piece of playing card – as proof of identity. The practice is ancient and because of its simplistic nature, it is uniquely tough to bust. A sharp-eyed customs officer might spot the matchstick or card when someone empties their pockets, but how do they prove what they were for?
There is evidence of hawala dating from 1327, in India, thought to be its home, although some say it goes back further, at least to the eighth century. Years ago, I went to Mumbai – at the time I was reporting on the difficulties the authorities were facing in smashing hawala’s use in the trafficking of drugs and other contraband. From talking to officers, some on secondment from HM Revenue and Customs in London, I found hawala played an absolutely key role. Sadly, they vented their frustration at not being able to penetrate and block what even then was a huge, totally secret activity.
It was all very well "following the money" as they had been instructed, but in reality that was easier said than done. Prosecuting traditional banks with their recoverable hard drives, documentation and CCTV, was nothing versus the impenetrability of hawala.
There have been successes. Usually, they rely on whistle-blowers. The National Crime Agency recently secured the conviction of an Iranian hawaladar, or broker, who hid behind a carpet business in Wood Green, North London. He was a middleman, accepting payments from migrants or their families, then paying it out, minus his commission, to the gangsters on completion of their journeys.
An Iranian in East London has also been jailed in Belgium for 11 years. He was thought to be the banker to 10,000 Channel crossings.
It is wrong, as some in the UK media have done, to characterise hawala as "Islamic". It is used just as heavily by non-Muslims. What tends to happen is that arrangements for a particular voyage of people or goods or any transaction, not necessarily illicit, are kept within a tight circle and that closed grouping invariably involves those of the same religious persuasion.
A UN report two years ago, The Hawala System: its operations and misuse by opiate traffickers and migrant smugglers, painted a bleak picture. "With a rich history dating back centuries, the hawala system can offer a unique blend of cultural compatibility, convenience, reliability, broad geographic reach and speed."
The awakening of governments really occurred earlier, with the 9/11 attacks, and a concerted move against terrorist financing and money laundering. The First International Conference on Hawala in May 2002 published the Regulatory Frameworks for Hawala and Other Remittance Systems. The International Monetary Fund contributed a chapter. Its concern was that countries with limited financial services suffer economic hardship because their citizens rely heavily on informal fund transfer systems such as hawala. They share common characteristics, including the desire for anonymity and avoiding regulation and official scrutiny. It is ideal, then, for use by groups intent on supporting terrorism and washing cash.
Timed with the summit, UK Home Secretary Yvette Cooper has set up a "task force" to emulate the success of Italy in cracking down on the mafia and its sources of illicit finance. "UK and Italian law enforcement officers, specialist financial investigators with mafia experience and forensic accountants are working together to freeze criminal bank accounts, carry out joint operations and mount more prosecutions against international people-smuggling gangs."
Two responses leap to mind: another task force, to go with another summit; and good luck.
Martin Hewitt, the government’s border security commander, told the summit that the only way to end the hazardous Channel crossings, responsible for more than 70 deaths last year, is through increased collaboration between European and international governments and law enforcement agencies.
There is nothing untoward about this approach – indeed, it is highly commendable. What we should not assume, as is the case in some quarters, is that this will somehow automatically translate into tangible results, leading to convictions and the end of hawala. It will not.
As long as we maintain a sense of perspective about an ancient pursuit that deliberately does not lend itself to exposure, we will not be disappointed.
