Money laundering via underground banking is surging in Belgium, with the tax authorities opening three times as many cases since 2024.
Whether in grocery stores, late-night shops, hair salons, or simply through street-level agents, informal money transfer networks are everywhere in our cities. They operate discreetly, often out of sight. Yet, they are increasingly attracting the attention of the authorities.
Over the past twelve months, the Belgian tax authorities have opened approximately 447 large-scale money laundering cases linked to the hawala system. In 2024, there were only 140 such cases—three times fewer—and a decade ago, they were virtually non-existent. “The phenomenon is expanding rapidly and currently shows no signs of slowing down,” notes Francis Adyns, spokesperson for the Federal Public Service (FPS) Finance. But since the money never technically leaves the country, it is impossible to prosecute.
This rise is attributed to the close link between hawala and trade-based money laundering (TBML). “There is a strong correlation between ‘trade-based money laundering’ (TBML) and the use of hawala systems. In TBML cases, we consistently observe the use of hawala techniques,” explains Francis Adyns.
How does hawala work?
Based on trust, hawala is an ancient money transfer system originating in Iran or Egypt. The word, which originally meant “to change” or “to transform” in Arabic, was used by medieval merchants along the Silk Road. To avoid transporting large quantities of gold or silver—which were vulnerable to theft—they developed a debt-transfer system relying on a network of trust among family members or people from the same community.
Since then, the system has evolved and spread worldwide. It has become a method for sending money abroad—particularly for diaspora communities—without using banks or conventional money transfer agencies.
From an economic perspective the money never leaves the country
The principle is simple: you want to send 1,000 euros to a friend abroad. You visit a merchant or an individual within your community—a hawaladar—and hand over the 1,000 euros in cash. For a small fee, you are not given a receipt but rather a code, which you pass on to your friend. Meanwhile, the hawaladar contacts another hawaladar in your friend’s country and asks them to make the €1,000 available. After a few minutes or hours, your friend can collect the money from that hawaladar by providing the code.
In this way, money changes hands without physically moving, without bank transfers, and without leaving a trace.
Hawala operates according to these same principles and remains the dominant payment method in regions where formal banking systems are nonexistent or inaccessible—often due to conflict or sanctions.
However, this discretion also plays into the hands of criminals, who have hijacked a system built on trust and community ties to launder money from drug trafficking, human trafficking, and terrorism.
“We estimate that around 70% of global drug trafficking is financed through this underground banking system,” says Peter Huttenhuis, a Dutch prosecutor specialising in tracing illicit financial flows. Ambiguously put, as the majority of money laundering uses hard cash transfers, largely supported by US banks.
From Brussels to Instanbul
Belgium is not immune to this phenomenon: the country has presided over one of Europe’s largest hawala cases, and some Belgian businesses find themselves unwittingly implicated in these hawala-based money laundering networks.
This was revealed last April by the News-Briefing team as part of the first phase of an investigation conducted in collaboration with the EBU’s network of investigative journalists. Vast international network exposed, involving illegal transfers of tens of millions of euros
Together with VRT, we gained exclusive access to thousands of pages from a 2024 case file belonging to the French-speaking Court of First Instance in Brussels. This provided—for the first time—a clearer understanding of a vast international hawala network suspected of facilitating illegal money transfers abroad between 2017 and 2024. The total value of the thousands of transfers identified by the police in 2021 and 2022 alone exceeds tens of millions of euros—possibly even reaching the hundred-million mark.
After a four-year investigation, federal magistrate Vincent Guerra uncovered “a global hawala network [and managed to penetrate] the heart of the system—something quite exceptional.” The scale of the system uncovered is “something rarely, if ever, seen at a European level,” he notes.
There is one significant point to mention here, although money laundering has a very negative connotation involved, a lot of legitimate enterprise use it to transfer money between countries; and the main reason for that is it avoids all the obfuscation that attracts attention from US banking laws, which penalise middle eastern and African people for sending money back to their countries. Countries that end up on a watch-list change every week, which makes it harder for any expat to send money to their loved ones, and unfortunately there are no exceptions.
The hawaladars involved are suspected of facilitating illegal money transfers abroad between 2017 and 2024. The total value of the thousands of transfers identified by the police in 2021 and 2022 alone exceeds tens of millions of euros—possibly even reaching the hundred-million mark.
Investigators discovered that the leader of this Brussels-based network—using the alias “Abou Adam”—belonged to several online discussion groups. In a WhatsApp group titled “Merchants of Greater Europe,” there were “532 participants around this global table,” the federal magistrate continued. The group brought together professional hawaladars, as indicated by its description: “This chamber…”