Belgium High-Risk for Hawala as Criminal Networks Exploit

Belgium has been identified as a high-risk country for criminal hawala practices, with a record 447 hawala providers detected by the Belgian Special Tax Inspectorate (BBI) in the past year — more than triple the 140 identified in 2024. Despite this explosive growth, authorities still lack a comprehensive strategy to combat the informal money transfer system that criminal networks increasingly exploit, according to VRT NWS.

What is Hawala?

Hawala is an ancient informal money transfer system originating on the Silk Road in the 8th century. The Arabic word means “transfer” or “change.” Through a network of trusted brokers known as hawaladars, money can be moved across borders without physically transporting cash or using formal banking channels. A sender gives cash to a hawaladar in one country, who contacts a partner in the destination country to pay out the equivalent amount, minus commission. Transactions are verified through codes, tokens, or photographs of banknotes.

While hawala serves legitimate purposes for migrants and diaspora communities sending remittances to regions with limited banking infrastructure, its opacity makes it highly attractive to criminal networks. According to RTBF, the system has become “the primary money laundering vector for organized crime,” in the words of French police inspector and hawala expert Quentin Mugg.

Explosive Growth in Belgium

“Barely 10 years ago, the phenomenon was still virtually non-existent here,” said Francis Adyns, spokesperson for the Belgian Federal Public Service Finance (FOD Financien). “We therefore note that it is clearly expanding. Both the number of findings and the presence of such structures in fraud investigations continue to increase.”

The BBI reports that in all money laundering dossiers involving trade-based money laundering (TBML), a hawala component is systematically present. Adyns noted that analyses show 75% of VAT fraud is accounted for by the hawala system.

The scale is staggering. According to Europol, hawala networks process many millions, if not billions, of euros per year. Lucy Miles, Head of Financial Crime at Europol, told investigators that one identified criminal money laundering network processed more than 150 million euros annually — “and that is just one.”

FATF Warning

The Financial Action Task Force (FATF), in its 2025 mutual evaluation of Belgium, designated Belgium as a high-risk country for criminal hawala services, citing the extensive drug trafficking through the Port of Antwerp. The international anti-money laundering body warned that a structural approach to hawala networks in Belgium is not sufficiently prioritized, expertise is lacking at various levels, and a broader strategy is missing.

“The financial sector already takes the reports very seriously, but the question is whether the authorities that must follow up on them can effectively do so,” said Thomas Incalza, lawyer and professor at KU Leuven and UHasselt, specializing in money laundering and financial crime. “In Belgium, I think that is a problem at the moment.”

The Brussels Network Exposed

The scale of the challenge became evident through a landmark 2024 Brussels court case. Six Palestinians were convicted for their role in a large-scale hawala network that processed transactions for hundreds of millions of euros to at least 56 countries. The investigation, which began as a terror financing probe, uncovered a private WhatsApp group called “Traders of Greater Europe” with 532 members who exchanged over 82,000 messages between February and December 2022, as reported by the BBC.

Federal magistrate Vincent Guerra, who led the four-year investigation, described the discovery as “hitting the jackpot.” “This isn’t just amateur work; it’s professional, and at a level we could never have imagined,” he said. “They’re bankers with no government oversight.”

However, the investigation revealed significant resource constraints. “A large part of this file was handled by just one investigator,” Guerra noted. “Due to the size and complexity of the file, we ultimately had to focus on the Belgian part. We sent the rest to Europol in The Hague.”

The EBU Investigative Journalism Network, a two-year investigation involving broadcasters from Belgium, Denmark, Spain, Austria, and the UK, exposed the full international dimension of these networks. The investigation revealed how hawala networks are used for drug trafficking, human smuggling, terrorism financing, and tax fraud across Europe.

Belgian Companies Caught in the Web

The investigation also revealed that at least 60 Belgian companies received significant amounts from convicted Danish money laundering companies via hawala. A West Flemish family steel company received at least 12 transfers from 7 Danish money laundering companies, totaling over 1 million euros, according to VRT NWS.

“I don’t think all those companies realize what they are cooperating with,” said Jens Langhorn, investigative journalist at Danish public broadcaster DR.

Dutch prosecutor Peter Huttenhuis, specialized in tracing criminal money flows, estimates that approximately 70% of global drug trafficking is financed through underground banking systems. “This kind of money network is a backbone and Achilles heel of criminal organizations,” he said.

The Human Cost

Beyond the criminal dimension, hawala remains a lifeline for many. Samir, a Palestinian in Belgium who uses hawala to send money to family in Gaza, pays commissions of 40-50%. “Via a bank it can take up to 6 months to send money to Gaza, while via hawala it goes very quickly,” he said. “For me, hawala is a form of exploitation. I can’t recommend anyone to use it, unless they see no other way.”

The Austrian case, covered by ORF, shows the brutal intersection of hawala with human trafficking. Two Syrian brothers who ran “the biggest hawala office in Vienna” from a kebab restaurant were convicted in July 2025 of human trafficking, torture, and rape of a courier who lost 350,000 euros. Gerald Tatzgern, head of human trafficking investigations at Austria’s Criminal Intelligence Service, told investigators that torture videos are sent to families demanding additional payments through the hawala system.

Police Response

The Belgian federal police are responding with the largest recruitment wave ever for financial crime positions, seeking over 100 additional financial investigators in 2026, according to VRT NWS. The federal police conducted more than 800 money laundering investigations in 2025.

“We really feel the need for more investigators,” said An Berger, spokesperson for the Belgian Federal Police. “Hawala is one of the forms of underground banking that criminal organizations use, alongside others. They have a lot of cash they want to channel abroad.”

What’s Next

Europol’s Lucy Miles emphasizes that international cooperation is crucial. “Law enforcement agencies must be able to work as flexibly and borderlessly as criminals,” she said. “These underground money networks undermine not only the European banking system and the economic fabric. The movement of criminal money forms the core of organized crime.”

As Belgium confronts its designation as a high-risk country for hawala, the question remains whether the increased detection efforts and police recruitment will translate into a comprehensive national strategy. The FATF has placed Belgium under enhanced follow-up status, requiring the country to demonstrate tangible progress in addressing the identified gaps. With billions of euros flowing through underground networks annually, the stakes could not be higher for the integrity of Belgium’s — and Europe’s — financial system.