To ask His Majesty's Government what assessment they have made of the reliance upon, and the success of, "hawala" banking systems in conflict zones such as Afghanistan, Yemen, Sudan and Gaza and the Occupied Palestinian Territories; and what steps they have taken to ensure these systems are protected as vital tools for local humanitarian actors and ordinary citizens to safely and securely transfer funds.
Answered on
27 September 2023
Money Service Businesses (MSBs), including Hawala, play an important role in conflict zones such as Afghanistan, Yemen, Sudan, Gaza and the Occupied Palestinian Territories. MSBs are often the only way of transmitting money, including remittances, to remote communities where formal banking services are limited. International standards on MSBs are set by the Financial Action Task Force (FATF) which are implemented in full by the UK. Government guidance sets out clearly that hawala banking in the UK is legal and that many are regulated. In some cases, hawala are the only means of transferring funds into high-risk jurisdictions but the risks associated with their use need to be appropriately managed. Overall, we recognise that hawalas are an important tool for tackling poverty and promoting financial inclusion during conflict and humanitarian crises.