Hawala, the mafia underground banking system in Switzerland

Criminal networks in Switzerland use a money transfer solution to escape the vigilance of the police.Image: Police lucernoise / Imago

Criminal groups and other mafias are increasingly using clandestine banking activities to transfer and whiten their dirty money in Switzerland. Decryption.

Henry Habegger / CH media

It is the story of a Syrian living in Zurich, who took a modest commission of 0.7% of the amount of the transaction for his work. This was to move funds of criminal origin.

The district court sentenced him to two years in prison for money laundering. During the search of his home, the police had found a million francs in cash in his bedroom.

In August 2022, the Lucerne police dismantled an Albanian clan. Through a travel agency, the gang whitewashed and transferred the alleged money of drug trafficking. To do this, they used the Hawala system.Image: Police lucernoise

Mechanics well -oiled

The Syrian was a “Hawaladar”. This is how the brokers working with the Hawala Oriental Silver Transfer system are called. A clandestine bank, in a way, which is not integrated into the regular system. It is based solely on confidence and personal relationships, and therefore leaves little traces.

In a summary note, the Federal Police Office, Fedpol describes traffic:

To ensure that money is successful safely, initiates generally exchange a code or image. For example, the photo of a ticket in a certain motto that the recipient will have to present. According to the accusation of the Zurich authority, this method also prevailed in the case involving the Syrian.

He would have moved at least six million between April 2020 and May 2024. It was the loot that a bunch of crooks by phone had managed to take the elderly in Switzerland. The alleged brains of operations, Turks, were not unmasked. But, as Zurich has cashed the million, it must now miss elsewhere.

All the funds passing through Hawala are not of a criminal origin. Migrants often use this system, used in corrupt states or without functional banking system. But the more the measures to prevent money laundering in the regular financial system progress, the more the drug barons, human traffickers and other criminals turn to clandestine services.

In principle, anyone with customers with cash, mobile phone and partner brokers in a determined region can start working for Hawala. Transactions are traditionally done in travel agencies, grocery stores, jewelry and restaurants. Increasingly, we have observed for barbershops, beauty salons, shisha bars, solariums and taxis. Home delivery services also lend themselves well to the discreet liquid routing from the tobacconist, or to his withdrawal.

A model widespread

According to Alexander Ott, chief of the Bern foreigners police:

According to him, this state of affairs currently makes the authorities’ interventions against these extremely difficult criminal circles. As OTT explains:

“Once, we got our hands on an envelope in the drawer of a barbershop. The man from the store told us that he had no idea of the person to whom it belonged. He swore that he had never opened this drawer before. ” Thus, it is impossible to confiscate anything, especially since they are often small sums.

For Alexander Ott, the Hawala system, based on commissions, largely explains the raison d’être of “local without customers” establishments which obviously do not make legal turnover, but which all the same mysteriously assume the rent and the other charges.

These shadow bankers are by nature elusive, and Swiss justice has so far has little experience concerning them. There are few judicial decisions on this subject.

The case of the Balkan travel agency in Lucerne is an exception. In a decision of the federal criminal tribunal, we quote a passer taken in a drug network. He told the federal police how simple the procedure was in the agency which served as a clandestine window:

27 “collectors” under his orders

Last year, a Geneva affair highlighted the system skeleton. At the top of the pyramid: a broker with, under his orders, 27 “pickers” or “collectors”. These were doing their tour mainly with nationals of Eritrea, Ethiopia and Sudan. The broker asked for commissions between 2.5 and 10%, half the “collector”.

Everything was dismantled in 2017, when the police caught a smuggler at Geneva airport. He went to Lebanon with 100 gold bars of 250 grams in his luggage and liquid silver with a total value of 1.7 million. The survey has shown that this network had heritage values to the recipients via Beirut and Dubai each time.

A company suisse in the crosshairs of Berlin

In another case, the Berlin prosecution asked in 2020 a search in a fundraising company in Switzerland. This would have sent Hawala sums in the space of a year for several million euros to Dubai. From there, money continued towards East Africa. The funds also came from nationals of Eritrea, Ethiopia and Sudan.

In Switzerland, the Eastern money transfers solution, or its Chinese equivalent Fei Dog, only starts to make themselves known to the authorities. Knowledge and experiences are still rare in this area. The Federal Police Office launched last October a warning:

The office had also organized a first round table on the subject.

(Translated from German by Valentine Zenker)

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