Top 1% of Defence Law Firms
Defended over 50,000 Cases
5 star google reviews
39+ years of experience
Hawala banking is an informal system of money transfer that does not use traditional banking channels. Instead, hawala transactions are facilitated by a network of hawaladars, or money brokers. Hawaladars typically operate outside of the formal financial system and do not keep records of their transactions. This makes hawala banking attractive to criminals who want to launder money or finance terrorism. In this article, we outline the offences of money laundering and financing terrorism as linked to hawala banking, explain how money services businesses (MSBs) fit in, provide some examples, and detail how activities in this area are punished. We also explain whether first time offenders are likely to go to prison for these offences.
Hawala banking is not illegal in the UK, therefore there is no offence of hawala banking. That said, any use of hawala banking must comply with regulations set in England and Wales. An established and regulated money transfer business must register with HM Revenue & Customs so that it complies with UK money laundering regulations.
The following offences relate to hawala banking in the UK:
MSBs in the context of hawala banking refers to money service businesses. MSBs are businesses that provide financial services such as money transfers, bill payments, and currency exchange. In the UK, MSBs are required to register with the government and comply with anti-money laundering (AML) and counter-terrorism financing (CTF) regulations.
The following offences relate to MSBs in the UK:
The exact requirements for a prosecution vary depending on the type of offence involved.
Here are some examples of hawala banking and MSBs offences in the UK:
Hawala banking offences:
If you are suspected of committing hawala banking and MSBs offences in the UK, you are likely to face strict investigations and serious legal consequences. Here’s what can happen if you are suspected of such offences:
The UK has strict regulations concerning financial services to prevent money laundering and illicit financial activities, and being suspected of any offences involving hawala banking or unlawful MSBs can have wide-ranging consequences for offenders.
The sentence for an offence involving hawala banking and MSBs can vary depending on the specific offence committed. However, in general, the penalties for these offences are severe.
For example, the maximum sentence for using hawala to launder money is 14 years’ imprisonment. The maximum sentence for using hawala to finance terrorism is life imprisonment.
The penalties for MSB offences are also severe. For example, the maximum fine for an MSB that fails to register with HMRC is £500,000. The maximum fine for an MSB that fails to conduct CDD on its customers is £250,000.
The UK government takes hawala banking and MSBs offences very seriously because they can be used to facilitate money laundering and terrorist financing. These offences can have a devastating impact on society.
The maximum penalties for some of the most common hawala banking and MSBs offences are:
Note that these are the maximum penalties. The actual sentence that a person receives will depend on the specific circumstances of the case. For example, a person who is convicted of using hawala to launder a small amount of money is likely to receive a shorter sentence than a person who is convicted of using hawala to launder a large amount of money.
Whether or not someone will go to prison for a first-time offence involving hawala banking and MSBs depends on a number of factors, including:
In general, however, first-time offenders are less likely to be sentenced to prison than repeat offenders. This is because the criminal justice system is designed to rehabilitate offenders, and judges are more likely to believe that a first-time offender can be rehabilitated outside of prison.
However, there are some hawala banking and MSBs offences that are so serious that even first-time offenders are likely to be sentenced to prison. For example, a first-time offender who is convicted of using hawala to finance terrorism is likely to face a prison sentence.
Hawala banking and MSB offences are very serious and the implications of being involved can be life changing. If you or someone you care about needs help with these offences, contact the experts at Stuart Miller Solicitors today. We have decades of experience working on these cases and may even be able to get a case against you dropped before it reaches trial.
A legal expert will consult you within 24 hours of making an enquiry.
We will always treat you with trust, understanding and respect.
Your case will be handled by an expert who specialises in your type of offence.
We will take early action to end proceedings as soon as it is practically and legally possible to do so.
You will be kept updated on your case at all times. We will provide a named contact available to answer your questions.
We understand this is a difficult and stressful time for you and your family. Our team will support you every step of the way.
We will never give up on your case. We fight tirelessly to get you the best possible outcome.