The Financial Intelligence Analysis Unit (FIAU) would like to inform subject persons that the Financial Action Task Force (FATF) has published a new report entitled, ‘Investigating Professional Money Laundering, Underground Banking, and the Use of Hawala and Other Similar Service Providers’.
This report reflects on the increasing role of underground banking, hawala and other similar service providers (HOSSPs) in facilitating illicit financial activity.
HOSSPs may operate legitimately to fulfil remittance and value-transfer purposes. However, along with underground banking, they may still be misused by criminals and professional money launderers (PMLs) to facilitate illegal financial activity. According to this report, underground banking and HOSSPs are increasingly operating as sophisticated, business-like structures within cross-border PML networks.
The report also explores the emergence of digital hawala, highlighting how operators are increasingly using encrypted messaging applications and digital tools to facilitate transactions. For example, customers may initiate transfers through mobile wallets, operators may use virtual assets, and dedicated hawala applications are being developed.
In addition to examining the challenges associated with combating the use of underground banking systems and HOSSPs by PMLs, the report outlines a number of good practices aimed at assisting jurisdictions and private sector entities in detecting and disrupting PML networks that utilise these channels.
Interested parties may access the publication directly from the FATF’s website or from the FIAU’s website under the tab “FATF”.