How Criminals Are Using Hawala to Launder Hundreds of Millions Across Europe

The European Broadcasting Union has uncovered systematic use of the hawala money-transfer system by criminal networks across Europe to launder hundreds of millions of euros linked to terrorism financing, drug trafficking, human smuggling, and prostitution (BBC).

Hawala is an informal money-transfer system rooted in trust networks spanning South Asia and the Middle East. It works without physically moving cash across borders. A sender hands cash to a hawaladar — a broker — in one country, who then instructs an associate in another country to pay an equivalent sum to the recipient. The two brokers settle the debt later through future transactions, often via trade or offsetting transfers. No records pass through the formal banking system. This makes hawala attractive to diaspora communities sending money home to family, and equally attractive to organised crime groups seeking to move illicit profits without leaving a financial trail.

A former money launderer identified only as Frank told the EBU he had been involved in hawala transactions totalling several hundred million euros. He described his introduction to the system at an office in a small town outside Rotterdam, where five or six messengers arrived within about ninety minutes carrying at least a million euros in cash. Frank said hawala money laundering was linked to the financing of terror, drug trafficking, and prostitution (BBC).

Austrian broadcaster ORF, part of the EBU network, investigated a case in which Austrian police raided what they called "the biggest hawala office in Vienna," operated from a kebab restaurant on a busy street. Two Syrian brothers who ran the office were convicted of human trafficking and of torturing and raping a courier who had lost €350,000. They received sentences of 18 and 8 years respectively. Gerald Tatzgern, who leads human-trafficking investigations at Austria's Criminal Intelligence Service (BK), told ORF that videos of torture are sent to victims' families demanding more money (BBC).

The scale of hawala-financed smuggling extends well beyond a single cell. Austrian police and Europol dismantled a people-smuggling ring financed through hawala that had transported approximately 100,000 people into Europe over 18 months (BBC).

These findings fit within a broader enforcement landscape. Operation First Light 2026, a global police operation coordinated by INTERPOL, resulted in over 5,800 arrests and the interception of USD 293 million across 97 countries, targeting social engineering fraud (manipulating people into giving away money or personal information) and associated money laundering (INTERPOL). As part of the operation, police in Eswatini dismantled a criminal network running illegal online gambling, money laundering, and impersonation scams (INTERPOL). In a separate Europol-led investigation, the Australian Federal Police helped disrupt an offshore money launderer who had washed $542 million for cybercriminals (AFP).

The UK National Crime Agency states that money laundering — the process of making illegally obtained money appear legitimate — underpins and enables most forms of organised crime, allowing groups to conceal assets and expand operations (NCA). UK cases illustrate the diversity of laundering methods. A criminal family and their associates used a corrupt airline check-in attendant to smuggle almost £30 million in cash out of the UK to the United Arab Emirates, hidden in suitcases. They were convicted (NCA). In a separate case, three defendants arrested in February 2023 were charged with fraud by false representation and money laundering after using proceeds from a PPE fraud scam to buy a luxury car and home improvements (NCA). The NCA also defines financially motivated sexual extortion, or sextortion, as a crime where the offender's motive is to obtain money and will likely demand more once the victim has demonstrated capacity to pay (NCA).

On the people-smuggling front, the NCA's next Ancillary Orders list imposing post-sentence restrictions on people smugglers is set to be published in late 2026 (NCA).

The exploitation of encrypted communications platforms runs parallel to these laundering networks. Britain's government stated that WhatsApp's end-to-end encryption — a technology that ensures only the sender and recipient can read messages — allowed paedophiles and organised crime groups to operate beyond the reach of the law (Reuters). A Moscow court ruled in March 2022 that Meta was guilty of "extremist activity" but said the ruling would not affect its WhatsApp messenger service (Reuters). In March 2026, Russian-backed hackers launched a global campaign to gain access to Signal and WhatsApp accounts used by officials, military personnel, and journalists (Reuters). The FBI and the Australian Federal Police subsequently made an arrest following a major software supply-chain attack attributed to TeamPCP in March 2026 (FBI).

The broader context here is that the hawala system sits at the intersection of two structural enforcement gaps. The first is regulatory: because hawala transactions leave no paper trail in the conventional banking system, anti-money-laundering frameworks built around transaction monitoring and suspicious activity reports are largely blind to them. The second is jurisdictional: the networks span multiple countries where law-enforcement cooperation, evidence-sharing protocols, and legal definitions of informal value transfer vary considerably. The Vienna case shows how hawala operations embed themselves in legitimate commercial premises, further complicating detection.

The combination of torture-as-enforcement against couriers and video-based extortion of migrants' families signals an operational maturity that distinguishes these networks from opportunistic smuggling. The 100,000-person throughput over 18 months, if accurate, implies a logistics infrastructure comparable to mid-sized commercial enterprises. That hawala provides the financial backbone for such an operation illustrates how informal value-transfer systems can scale to meet the demands of industrial-level criminal activity. Whether EU-level legislative responses will target hawala-specific vulnerabilities or continue to fold them into broader AML directives is a question that the EBU's findings will likely intensify.