Hawala still rampant 8 years after 9/11

November 26, 2009

At an anti-terrorism conference in India this week, one year after the jihadist attacks on Mumbai, the police chief for Jammu and Kashmir said that not enough is being done to stem the tide against hawala.  For readers who may be a little confused by hawala, this old diagram from the Washington Post illustrates the basics:

Unfortunately for our security in the world today, many hawala transactions are not so benign as WP’s cabbie scenario.  Here’s the real lowdown from The Hindu on the hawala today:

Mumbai: The ongoing counter-terrorism measures leave much to be desired when it comes to gagging the sources of funding tapped by terrorists across the world. This was the concern raised by a think-tank of eminent persons from the police ranks, politics and media at a summit on ‘Preparedness to fight terror’ here . We have done pretty little to stop funding to the terrorists,” Ashok Bhan, Director General of Police (DGP), Jammu and Kashmir, told the audience. He listed hawala, extortion, counterfeiting currency*, voluntary contribution and money from infiltrators as the ways of money transfer to terrorists…

Another important mode is the Western Union Money Transfer through which crores of rupees come into the country. “We have to address funding. Banks under the garb of secrecy and commercial interests have not come on board,” he pointed out. Ajai Sahani, executive director, Institute of Conflict Management, New Delhi, spoke on the larger human resource crisis, which enfeebled our systems against facing the challenge of terrorism. For example, there existed a whole system of dubious financial dealings making monitoring of terror funding nearly impossible.

“How are you going to control terrorist finance? It is not just the terrorists who use hawala. It’s used by corrupt politicians and people too. You cannot have a thriving black economy and say we want to prevent terrorism. You have a flourishing grey market where you can buy smuggled goods,” Dr. Sahani said.

The hawala system helped cover the financial tracks of the 9/11 terrorists and the 26/11 Mumbai jihadists.  It’s discouraging that eight years after our own wake-up call and one year after India’s, law enforcement on the ground reports that too little is being done.

At the same time, it’s important to note that hawala is merely a mechanism of financing jihad, but the principal source of jihadist revenue is Islamic taxation.  Both must be stopped.


* Counterfeiting by jihadists is a budding trend that I have suspected relates to jihadist disdain for “infidel” paper currencies.


  1. […] Terrorists use the traditional Islamic money transfer system known as hawala to exchange money without being monitored.  Hawala dealers in the U.S. are required to register with FinCEN, a financial regulator, but […]

  2. […] Islamic money transfer system, was involved in the financing of the attack, which Money Jihad also believed helped the perpetrators. However, it is now beginning to appear, based on accounts from India’s […]

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