In the Muslim world, money is often transferred using the “hawala” method. Billions flow around the globe without record. According to WELT information, a new network has been discovered. The head of the shadow banking system, Ahmed A., could support attacks on Western citizens.
A woman enters a small grocery store in Madrid. She hands an envelope over the counter, inside it 5000 euros in cash and a note with a numerical code. A short time later in a refugee camp near Smara in Western Sahara, between Morocco and Algeria. A man knocks on the metal shutter of a computer store.
A merchant with a moustache and sky-blue cape opened it for him. The man tells him a numerical code and is then handed an envelope containing 700,000 dinars in cash.
This is how one can imagine Ahmed A.’s business. The described traders in Spain and Western Sahara, of whom there are pictures on social media, are his employees. Ahmed A. is the head of a shadow banking system that connects Europe with Africa and the Middle East.
In this case, it works like this: within hours, an amount deposited in Europe is paid out in West Africa – without the cash actually having moved. Without the origin of the money, the name of the sender or that of the recipient being registered. The customer and the merchant in Madrid merely transmitted the numerical code to their respective counterparts in Western Sahara, the password for the “transfer”.
The transaction is completely anonymous. The intermediaries collect a few per cent commission for this.
This method is called hawala, Arabic for a bill of exchange or money order. It’s an ancient Muslim remittance system based on trust alone. A kind of Western Union from the Orient, if you will. The only difference is that the money flows bypass any financial supervision.
Hawala is a good way for migrants to send money quickly to their relatives back home, where in some cases there is no functioning banking system. On the one hand. On the other hand, it is every financial investigator’s nightmare. Because their anonymity makes hawala networks the preferred instrument for mafia gangs, who use them to launder drug money, for example. And for terrorist organizations that use it to finance attacks.
The German Federal Ministry of Finance estimates that 200 billion U.S. dollars flow around the world through these shadow banks every year. In Germany, this payment method has only been punishable since 2018. For the money transfers, the pseudo banks would actually need a license as a payment service provider from the financial regulator Bafin. Police officers are now being trained in hawala to better track the networks.
But because virtually nothing is written down in these systems, which are based on centuries-old traditions, it is difficult to detect them at all.
“Europe, with its diverse migrant communities that know hawala from their homelands, is a linchpin of these networks,” says a former division chief of a Western intelligence agency that specializes in terror financing. In a year and a half of investigative work, he and a research team tracked down Ahmed A.’s hawala network. The head of the gang is based in Spain.
This week, the collected information was handed over to the financial department of the Guardia Civil. WELT was able to have an exclusive look at the documents.
“Tires” is the name of the network that Ahmed A. and his business partner Azman M., an old student friend, have set up. He boasted that he could broker amounts of up to 50,000 euros anywhere at any time. And he was expanding, he said, to be able to make even higher “transfers.” A. studied in Libya and has lived in Spain since 2007.
He specialises in illegal money transfers from Europe to West Africa and vice versa. He and his business partner are based in Spain, and a relative of A. works out of Algeria. They have good contacts with the Algerian army.
The financial investigators came across hawala transfers with “tires” from numerous European countries, including Germany, Belgium, France and Great Britain, as well as from the Gulf States to Western Sahara. In addition, A. himself stated that he could move cash to and from Lebanon at any time.
The branches of his shadow bank are the owners of inconspicuous businesses such as greengrocers, butchers or computer stores.
“Hawaladare” are the names given to the people where customers can deposit money or get paid out. In addition, according to the investigation, Ahmed A. and Azman M. have opened private accounts at various European banks, to which their customers can transfer sums of money that are paid out in cash elsewhere – and vice versa.
This is particularly convenient for criminals, who can launder the cash they have acquired through crime by depositing it anonymously in cash in Lebanon or Algeria, for example, and then conduct their business inconspicuously in Europe by bank transfer. The cash holdings of the “hawaladars” in Europe, Africa and the Middle East balance each other out – or, if necessary, are balanced out by smuggling cash, jewellery or expensive watches.
Business cards with the name “Tires” and advertising “Computer Services” and “Money Exchange” in Arabic were discovered by investigators in the region in and around Western Sahara. Among terrorism experts, this find is setting off alarms. This region is riddled with offshoots ranging from Al-Qaeda to Islamic State.
One major player, in particular, is expanding its influence in West Africa and beyond: Iran, the world’s largest state sponsor of terrorist groups. The Islamic dictatorship’s central strategy is to exert cultural, political, and military influence through Shiite communities abroad. Ideally suited for winning local militias for the supposed fight against the “colonialist West” are unstable and poor regions. There are more than enough of them in Africa.
Morocco accuses the Iranian government of supporting militias in Western Sahara that are demanding independence for the region and fighting Moroccan security forces. Polisario members in Western Sahara have reportedly been supplied by Tehran with surface-to-air missiles and drones. Hezbollah, which is allied with Iran, reportedly has set up camps in Algeria where it trains Polisario fighters.
The Frente Polisario has been fighting for the independence of Western Sahara since the mid-1970s. In 2020, then-U.S. President Donald Trump recognized Morocco’s claim to Western Sahara in exchange for a peace agreement Morocco reached with Israel, Iran’s arch-enemy. This worsened Morocco’s standing in the Arab region and brought the region into the focus of Iran’s proxy strategy.
Security circles expect terrorist attacks against Western nationals on African soil to increase.
Because of the comparatively poor security situation, they are easier to carry out there than in Europe, for example. However, training and supporting local militias costs a lot of money. Iran has no direct access to the international financial system due to Western sanctions.
Lebanon-based Hezbollah faces the problem that the banking sector has partially collapsed in the Lebanese economic crisis and their own financial institutions have also been sanctioned. They also want to disguise their terrorism financing in Africa as best they can. That is why they resort to hawala networks.
It has not yet been proven that the hawala network “Tires” is used by Hezbollah. However, the initial investigations indicate that this is the case. Anyone who wants to transfer money to Western Sahara can hardly get past Ahmed A. and his “hawaladars.” And Ahmed A. makes it clear on his own Facebook page that he maintains a positive attitude toward Iran, Hezbollah and the Polisario fighters. There, he is friends with representatives of the militia from Western Sahara and also with liaisons between Frente Polisario and Hezbollah.
Ahmed A. repeatedly expressed his sympathy for Iran. The latter “stood by its allies in the darkest times and is in a stranglehold,” he writes. This probably refers to the Western sanctions against the regime in Tehran – which can be circumvented by hawala banking.
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