HMRC targets informal money transfer networks
HMRC has launched a new campaign to tackle informal money transfer systems such as Hawala. These networks, while often used for legitimate purposes, are also exploited by criminals to launder money and hide the proceeds of serious organised crime.
Understanding informal money transfer systems
Informal money transfer networks rely on trust-based arrangements rather than formal banking channels. Hawala, for example, allows individuals to send money abroad without physically moving funds. Instead, local operators, known as Hawaladars, ensure that money reaches recipients in countries with limited banking infrastructure. These systems are widely used by diaspora communities to support family members overseas.
Why registration matters
HMRC urges all businesses offering informal money transfer services to register for anti-money laundering (AML) supervision. Registration helps protect businesses from criminal exploitation and ensures they follow legal requirements. Without registration, businesses risk civil penalties, criminal prosecution, or even closure.
The scale of the problem
It is estimated that around £2 billion is laundered annually through informal money transfer networks in the UK. This figure highlights the urgency of HMRC’s campaign and the need for greater awareness among operators.
Educating Hawaladars and communities
To reach affected communities, HMRC is using radio broadcasts, digital advertising, and local outreach. The campaign aims to educate Hawaladars about their legal responsibilities and the importance of AML compliance. Recent joint visits by HMRC and the National Crime Agency (NCA) to over 40 businesses have helped reinforce this message.
Protecting communities through compliance
Informal money transfer systems play a vital role in supporting families abroad. However, when criminals exploit these networks, they harm the very communities they serve. By registering with HMRC, businesses can safeguard their services, protect their communities, and operate within the law.
