BaFin Calls for International Collaboration to Combat Hawala Banking

Law enforcement agencies must develop a global network to effectively counter Hawala banking, according to BaFin, Germany’s anti-money laundering (AML) regulator.

At a recent conference held in Frankfurt, the regulator gathered more than 100 financial crime experts to discuss innovative strategies for addressing the challenges posed by alternative financial systems.

Birgit Rodolphe, BaFin’s Executive Director for anti-money laundering and counter-terrorist financing, underscored the necessity of international collaboration and information exchange to dismantle illicit financial networks. She emphasized that “close cooperation” between authorities, both within Germany and internationally, is vital for disrupting criminal operations.

“It takes a network to beat a network,” Rodolphe stated, affirming that BaFin is prepared to act as a “matchmaker” to facilitate these connections.

In a LinkedIn post, BaFin elaborated on the objectives of the conference, noting that the event was designed to equip participants with “fresh insights, ideas, and confidence” in their efforts to combat hawala and other alternative remittance systems. The regulator outlined several crucial takeaways from the discussions:

• The dynamic and evolving nature of hawala banking presents significant challenges in preventing illicit financial transactions.

• Investigations have uncovered hawala transfers amounting to billions of euros.

• Criminals engaged in money laundering are becoming increasingly sophisticated, leveraging global networks that operate across multiple jurisdictions.

• Terrorist financing and organized crime groups are adapting to new technological advancements, with hawaladars now digitalizing their financial operations.

• To effectively respond, law enforcement agencies, regulatory bodies, financial analysts, and the private sector must enhance their cooperation and coordination.

  
  

BaFin reiterated that addressing hawala banking and other informal financial transfer systems is a critical component of the broader fight against money laundering and terrorist financing.

By fLEXI tEAM