Amsterdam hotbed of underground banking

. ()

Amsterdam has become the nerve center for 'hawala' bankers, money launderers who use some form of underground banking. Despite major criminal cases against those involved, tens of millions are diverted annually through the ancient banking system, but probably much more.

This was announced by prosecutor Greetje Bos, expert in combating the black money market at the national office of justice.

In the Netherlands a few dozen investigations take place annually, into money laundering using the 'hawala' system, especially common in India and Pakistan.

hawala banking
Ronald Lee Watton
Picasa

Hawala is based on trust and leaves no trace. The paying party brings an amount to a 'banker'.  The 'banker' uses an intermediary to call a colleagues who could be anywhere in the world. The colleague pays the amount to the receiver. Physically no money goes from A to B.

The balance is restored through other operations. If an outstanding amount remains, ultimately a money courier will still have to transport the balance, but even then the original transaction stays out of the picture.

All that money stays under the radar and nothing comes into the legal channels. If that were the case, Netherlands would probably no longer be in debt, according to Bos.  The prosecutor just finished a case against Colombian money couriers who had transferred 55 million within eighteen months. These amounts can easily be multiplied by a large factor, because the better part of the transactions go undetected.

In three major Amsterdam criminal cases against 'hawala' bankers and couriers hefty prison sentences were pronounced in recent years, but the underground banking continued unabated

Tags: