WRITTEN QUESTION E-2038/01 by Freddy Blak (GUE/NGL) to the Commission. EU humanitarian aid and Hawala.
Date: 2001-07-13
Institutions: European Parliament, Provisional data
Subjects: Afghanistan, banking system, financial transaction, fraud against the EU, fund (EU), humanitarian aid, money laundering

20.6.2002

EN

Official Journal of the European Communities

C 147 E/9

(2002/C 147 E/010)

WRITTEN QUESTION E-2038/01

by Freddy Blak (GUE/NGL) to the Commission

(13 July 2001)

Subject: EU humanitarian aid and Hawala

Dacaar, the humanitarian organisation, which conducts aid operations on behalf of the EU in Afghanistan
for example has apparently been working with an illegal currency network, Hawala. Hawala is a closed
secret world-wide network which within a few days can transfer unlimited amounts anywhere in the
world. The money is transferred without vouchers and can therefore never be traced. Interpol and the
international narcotics police regard the network as a dominant element in global money laundering. In
most countries Hawala is illegal.

1. Will the Commission confirm or deny the fact that EU aid appropriations have been channelled via
Hawala?

2.
If the answer is yes, will the Commission state whether it considers it proper for EU aid funds to be
used to conceal the laundering by Hawala of the proceeds of drugs and the smuggling of human beings?

Answer given by Mr Nielson on behalf of the Commission

(18 October 2001)

In order to transfer funds to its contractors, the Commission uses the services of public banks, which are
established in the Member States, and which have been selected within an open call for tender. The
transfers are normally made to bank accounts in the country where the contractor is established. Thus, the
Commission does not use the Hawala system and is not responsible, if a contractor decides to use this
network for his own purposes.

in order to allowing for a better understanding of the Hawala system and its concrete
Nevertheless,
implications in the Afghan context, the Commission is pleased to inform the Honourable Member about
the money transferred by humanitarian non-governmental organisations (NGOs) operating in the region.

The Hawala bank as a generic name refers to all financial transactions outside an official banking system.
The system is used intensively between members of an ethnic community and allows family members for
instance to transfer money to each other. It entails a close social cohesion between people as it rests on the
essential condition of absolute trust. Various diaspora use it a lot around the world, mainly in Arabic
countries. It is the most ancient way for money dealings. As such, the system is not illegal although it
allows the transactions to be less detectable as they are internal to a community and not easily traced.

In the case referred to by the Honourable Member, the Hawala system is used by humanitarian NGOs and
international organisations in the absence of official banking institutions in Afghanistan. NGOs operating
in Afghanistan need cash inside Afghanistan in order to pay for local staff, local procurement and general
operation of offices. Considering the security conditions in Afghanistan, physical transfers of cash into
Afghanistan are too risky for NGO staff as well as for the funds and consequently, there is no secure
alternative to this system.

On the basis of information received from the Danish Committee for Aid to Afghan Refugees (Dacaar) as
well as from the Danish Ministry for Foreign Affairs, the Commission can confirm that Dacaar as well as
most other NGOs and United Nations (UN) agencies in Afghanistan use the Hawala system.

C 147 E/10

Official Journal of the European Communities

EN

20.6.2002

The operation used by Dacaar can be described as follows:

: The NGO office in Afghanistan requests funds in dollars from their NGO headquarters in Pakistan.

: The NGO headquarters in Pakistan will have a contract with a legally registered money dealer, which
upon request from the NGO authorises a middleman in Afghanistan to release funds to the local NGO
office in Afghanistan.

: The NGO office in Afghanistan informs the NGO headquarters in Pakistan when it has received the

money from the middleman.

: The money dealer is then paid by the NGO headquarters in Pakistan in order to get his outlay back

plus a commission amounting to 1 % or 1,5 %. Thus, the transaction is concluded.

Finally, it may be added that all implementing partners for Community humanitarian or development
projects are submitted to strict and regular financial controls. The Commission has not identified any
irregularities in Dacaar’s financial administration.

(2002/C 147 E/011)

WRITTEN QUESTION P-2111/01

by Rosa Miguélez Ramos (PSE) to the Commission

Subject: Development cooperation and fisheries

(10 July 2001)

fisheries agreements, despite their status as commercial agreements,

International
include sections
concerned with the development of the fisheries sector in the signatory country, by such means as
support for training and research.

However, local fishery development projects in developing countries are financed under the Community’s
development cooperation policy.

What fisheries sector development projects in developing countries have been financed to date under the
Community’s development cooperation policy?

Answer given by Mr Nielson on behalf of the Commission

(12 October 2001)

The Commission has clearly stated its intention to pursue improved coherence between development
policy and other policies likely to affect developing countries. More thans 15O million poor people in the
world depend on the fishery sector, and the sector is an important source of foreign exchange to many
developing countries.

Approving the FAO Code of Conduct for Responsible Fisheries, EC has also recognised the contribution of
small scale fishing to employment and to food security.

According to the Commission’s records, a total of 334 programmes, projects or actions were launched
during the period from 1980 to 2001 (31 July 2001), to support the fisheries sector in developing
countries. 289 of them for the benefit of African, Carribean and Pacific countries (ACP), 31 for Overseas
Countries and Territories (OCT) and 14 for countries of the Asian, Latin American and Mediterranean
areas (ALA/MED). On 31 July 2001, the cumulative commitment by the Community stood at € 421
millions, of which € 254 millions for the ACP countries, € 30 millions for the OCT and € 137 millions for
the ALA/MED; the funding resources being the European Development Funds and the Commission’s yearly
Budgets.