Today the Spanish newspaper El País revealed that the terror network of al-Qaeda controls dozens of illegal banks in Spain, which transfer over 300 million euro per year from Spain to Muslim countries. The illegal banks operate a system called hawala. The unofficial private banks linked to al-Qaeda are run by some 200 Pakistanis servicing 100,000 customers. Hawala banks operate from various small stores, such as butchers and groceries, and act as savings banks for islamic immigrants in Spain. They are frequently used by the immigrants to transfer money to their home countries. For their services the hawala charge a commission which is lower than the money charged for similar services by official banks.

According to the Spanish intelligence services the hawala play an important role in financing terrorism as part of the commission they charge their customers is used to sponsor al-Qaeda. The involvement of hawala in terrorist activities has already been know for years. El País writes that the Spanish authorities are finding it difficult to discover who is running the unofficial banks and who are the customers. The paper also refers to a declaration of the Algerian president Abdelaziz Bouteflika earlier this year in which he said that the hawala network should be dismantled in order to be able to effectively fight terrorism. Of course, one reason why governments do not like hawala banks is that these do not pay taxes to them but to bin-Laden instead. Hence, an obvious way to tackle the hawala system would be to make it cheaper for customers to use regular banks rather than to rely on the hawala.