Almost alone among EU countries, the U.S. State Department singled out Spain as facing “significant gaps” in identifying unlicensed hawala dealers in its annual narco-trafficking report. Hawala has been used to finance numerous Islamic terrorist attacks globally. The State Department said the following about Spain’s money laundering and financial crimes enforcement capabilities:
Spain has long combated both domestic and foreign terrorist organizations, and Spanish law enforcement entities have identified various threat finance vulnerabilities, including donations to finance nonprofit organizations; establishment of publishing companies that print and distribute books or periodicals for propaganda purposes; fraudulent tax and financial assistance collections; the establishment of “cultural associations;” and alternative remittance system transfers. Other outlets such as small convenience stores and communication centers that often offer wire transfer services, are used to move money in and out of Spain by making small international transfers for members of the immigrant community. Spanish regulators also note the presence of hawala networks in the Muslim community. While AML/CFT supervision of banks appears to be robust, significant gaps regarding the identification of unlicensed operators, and the supervision of money or value transfer services operating under EU passporting rules remain. In May 2014, Spain approved regulations to implement its 2010 AML/CFT law.
The report seems a little vague on the culprits behind the publishing companies and “fraudulent tax and financial assistance collections.” One might think the report refers to the last gasp of the Basques, but the references to international transfers, the immigrant community, and the hawala network suggest that Spanish officials are more concerned about vulnerabilities within the Muslim community.