Why Hawala Defences Fail in the UK Criminal Courts

By Narita Bahra KC & Dr Jonathan Ercanbrack 

Recently a company director walked into a London Crown Court confident his business operated a legitimate Hawala Service. Six weeks later, he was convicted of money laundering, facing a substantial sentence of imprisonment.  What went wrong?

The answer is deceptively simple: the jury and Court did not understand Hawala. And when your adjudicating tribunal do not understand something that appears to operate 'outside' regulated UK banking systems, they default to suspicion.

Hawala: The Cultural Disconnect

Hawala is a thousand-year-old trust-based remittance system used legitimately by millions worldwide. It's faster than Western Union, cheaper than banks, and embedded in communities from Dubai to Delhi. Yet to a UK jury unfamiliar with informal value transfer systems, hawala transactions look like textbook money laundering: no audit trails, minimal documentation, cash movements, and coded communications.

The prosecution's narrative is usually devastatingly simple: This was not banking, it was concealment. Without specialist expertise to reframe that narrative, juries are likely to convict. 

Hawala cases are often lost in the preparation room, not the courtroom. Three critical mistakes doom defence preparation:

1. Generic legal teams without cultural expertise. 

Most defence teams lack detailed and in-depth understanding of informal value transfer systems, legal transplants, and the socio-economic contexts in which Hawala operates. They cannot distinguish or explain legitimate Hawala features from criminal conduct, and therefore, neither can the adjudicating tribunal.

2. No expert evidence or inadequate expert instruction. 

Expert evidence on Hawala is not optional for success, it is essential. But instructing the wrong expert, or instructing them too late, can be fatal. The expert must explain relational governance, trust-based settlement systems, and why features that may appear suspicious in a western context are actually customary practice in other parts of the world. 

3. Failure to confront regulatory misunderstandings. 

Prosecutors often conflate Hawala's informality with criminality. They point to FCA licensing, HMRC supervision, and anti-money laundering failures as proof of guilt. Without counsel who understand both UK financial regulation and informal financial systems, that narrative will prevail.

What Changes Outcomes for Clients?

Successful hawala defences require a specialist and experienced team:

Counsel with proven Hawala defence experience who can translate complex cultural and financial concepts into narratives juries understand.

Expert witnesses with academic and operational knowledge of informal value transfer systems, legal anthropology, and comparative financial regulation, experts who comply rigorously with Criminal Procedure Rules and can withstand cross-examination.

Forensic accountants who understand informal ledger-keeping and can demonstrate that accounting irregularities reflect customary practice, not criminal concealment.

In cases defended by Narita Bahra KC with expert evidence from Dr Jonathan Ercanbrack, juries have been equipped to distinguish between Hawala's operational features and money laundering. Dr Ercanbrack's evidence, on relational governance, legal transplants, and trust-based systems, provides the cultural and operational framework juries need to assess evidence fairly.

The Stakes Are Rising

As international travel and cross-border remittances increase, Hawala Prosecutions are becoming more common in UK courts. Yet judicial and jury understanding has not kept pace. The consequence? Legitimate remittances are forfeited, defendants face lengthy imprisonment, and communities that rely on Hawala are criminalised.

The legal framework is unforgiving: sections 327-329 of the Proceeds of Crime Act require only suspicion, not knowledge, of criminal property. The evidential burden is low. The penalties are severe. And without specialist representation, convictions and forfeiture are likely.

Hawala defences are won or lost on expertise. The difference between acquittal and conviction is likely to depend on whether your tribunal (judge or jury) understands that hawala is not a synonym for money laundering, it is a centuries-old financial practice embedded in culture, community, and trust.

Narita Bahra KC is a Tier 1 ranked Financial Crime Barrister who has led in numerous successful Hawala cases. With extensive experience in defending complex financial crime prosecutions, Narita Bahra KC has instructed Dr Ercanbrack in many of those cases, establishing a proven track record in securing acquittals and favourable outcomes where Hawala defences are advanced.

Dr Jonathan Ercanbrack is a Reader in Transnational Financial Law at SOAS University of London and a recognised expert on hawala and informal value transfer systems. His expert testimony has been instrumental in high-profile international money laundering cases, providing courts with the cultural, historical, and operational context necessary to assess hawala transactions fairly. Dr Ercanbrack's work on hawala in criminal proceedings has been published in leading academic journals and he regularly advises law enforcement authorities including the UK's National Crime Agency.