Hawala networks increasingly use virtual assets, fintech to conceal illicit wealth: FATF, OECD

ISLAMABAD: Traditional underground financial networks, including hawala and other similar service providers (HOSSPs), have become increasingly professionalised and are making greater use of virtual assets and fintech platforms to conceal billions of dollars in illicit wealth, according to a new joint report by the Financial Action Task Force (FATF) and the Organisation for Economic Co-operation and Development (OECD). The report was jointly prepared by the two Paris-based organisations, which specialise in financial and economic matters.

Based on feedback from around 45 jurisdictions and organisations, including India and Pakistan, the report highlighted cases involving illicit money transfers through such HOSSPs. In both India and Pakistan, it noted the growing role of underground banking and financial networks in facilitating illicit finance. The report highlighted the vulnerability of these systems to money laundering and terrorist financing, with some cases involving more than €500 million being laundered through underground banking and hawala-based schemes within just a few months. It found that the criminal misuse of underground banking and HOSSPs was a widespread global…