LAHORE: An Oman-based hawala network used WhatsApp, mobile-linked transfers and e-wallets to facilitate unlicensed cross-border remittances to Pakistan, according to a new joint report by the Financial Action Task Force (FATF) and Organisation for Economic Co-operation and Development (OECD).
The report cited the case while warning that underground banking and hawala networks globally are becoming increasingly professional and making greater use of virtual assets and fintech platforms to conceal illicit wealth.
Based on feedback from around 45 jurisdictions and organisations, including those in Pakistan and India, the report found that more than 80% of reporting jurisdictions identified underground banking systems among the principal channels or techniques used for professional money laundering.
In some cases, more than €500 million was laundered through underground banking and hawala-based schemes within just a few months.
In the Pakistan-related case, the Central Bank of Oman (CBO) received intelligence through its whistleblower channel about individuals suspected of operating an unlicensed cross-border remittance business to Pakistan.
The activity came under scrutiny after a reporting entity observed a sudden decline in customer remittances through particular corridors. Further enquiries by the CBO identified a WhatsApp group called “XX Money Exchange”, operated by foreign nationals advertising foreign exchange and remittance services to expatriate communities in Oman.
The hawaladars offered rates below the formal market rate with minimal or no fees. Customers transferred money either in cash or through mobile-linked transfers, while the operators used e-wallets to arrange corresponding payments in the destination jurisdiction.
“The scheme exploited lower-cost remittance channels in destination countries, including fee-free transfers to Pakistan through channels such as Raast, as well as exchange rate differentials offered by some digital wallet or payment providers,” the report said.
The case forms part of the FATF-OECD report’s broader findings that underground banking and similar financial networks are increasingly combining traditional methods with virtual assets and fintech platforms, while remaining vulnerable to misuse for money laundering and terrorist financing.
