Detained Iraqis suspected of financing ISIS may have used hawala system

Two Iraqis, a father and son, detained in June for financing the ISIS terrorist organisation, might have been part of the “hawala” money transfer, the Internal Security Agency (ABW) told the Polish Press Agency.

The agency has requested that the National Prosecutor charges the two men, who, if found guilty, face the possibility of spending between two and 12 years in prison.

Stanislaw Żaryn, the press officer for the minister coordinator of special services, told PAP on Monday that an investigation by officers in the western Polish city of Wrocław, under the supervision of the Lower Silesian branch of National Prosecutor's department of organised crime and corruption had ended in an indictment.

The Internal Security Agency (ABW) detained the men in June 2020 and they have been under arrest ever since. Prosecutors have filed for the men to be charged with transferring payments to fighters of the international terrorist organisation defined as the Islamic State ISIS.

The nebulous fabric of the ‘hawala’

The two Iraqis are believed to have sent fighters in Syria and Iraq money through the "hawala" system of financing terrorism.

"Features of the 'hawala' system are quick transfers, anonymity, one-time transfers of small amounts, the lack of any formality and invisibility to the official banking system," the National Prosecutor's office explained. "The transactions are conducted immediately after receipt of the cash by an intermediary and giving a password."

The “hawala” system is based on transfers between individuals with no banking system involved, the prosecutor said.

In fact, the system relies on fixers who set a password, take the money from the sender and provide him or her with the contact information of another broker in the city where the money is sent to. The recipient at that city will be able to retrieve the money after he or she provides the correct password to the given hawala broker. This way funds travel across borders undetected with border guards and customs officers untriggered by the tiniest snippet of suspicion.

The system was in use before ISIS became a household name. It was used to finance the pilots that attacked the World Trade Center in New York and the Pentagon in September 2001, the prosecutor added.

The investigators said that the two Iraqis received money sent by ISIS fighters based in Germany twice. From there the money was transferred through the “hawala” system from Poland to a specific terrorist and his wife.

Mr Żaryn went on saying that an investigation conducted by the ABW between the years 2017-20 showed that the Iraqis sent money to ISIS from March to May 2016. The money, coming from family members of ISIS fighters living in Europe, was transferred to Poland by Western Union, from where it was transferred to ISIS with a shop set up in Iraq.

Having generated a remarkable financial cushion during the high days of its fanaticism-infused sociopolitical plan to build the Caliphate governed by the strictest application of Sharia, also known as the Islamic law, ISIS started investing its funds in legitimate businesses such as real estate and automobile dealerships.

The shadowy network of the “hawala” brokers and their secretive machinations served as both a financial circulatory system and a spinning wheel for future investments.