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NCJ Number: 200314 Find in a Library
Title: Hawala and Other Informal Value Transfer Systems: How to Regulate Them?
Journal: Risk Management: An International Journal  Volume:5  Issue:2  Dated:2003  Pages:49-59
Author(s): Nikos Passas
Date Published: 2003
Page Count: 11
Type: Research (Theoretical)
Format: Article
Language: English
Country: United Kingdom
Annotation: This paper examines the mechanics and settlement processes in hawala networks, in order to inform policymakers of its etiology.
Abstract: In response to the terrorist attacks on September 11, 2001, Western policymakers have given top priority to fighting terrorism in all its forms. As such, a great deal of scrutiny has been applied to so-called “underground banking” practices and “alternative remittance systems” such as hawala networks. These types of alternative banking systems involve no deposits or lending and tend not to leave a formal paper trail of transactions. However, the author cautions that not all hawala networks or informal banking systems are suspect, and points out that most of the funding for the September 11th terrorist attacks came through formal financial institutions in the United States. The author explains the mechanics involved with the hawala system of monetary business in order to debunk myths. The two main aspects of the hawala system that are examined are the sending and receiving of money and the settlement process. Many other alternative money networks operate in the same way as hawala and are responsible for channeling hundreds of billions of dollars around the world. Traditional alternative money systems are often old and ingrained in the traditions of various ethnicities. As such, it is important for terrorist investigators to be sensitive to the monetary traditions of other ethnicities, rather than automatically viewing informal monetary systems as terrorist-related. References, notes
Main Term(s): Federal regulations; Regulations compliance
Index Term(s): International terrorism; State regulations; Transnational Crime
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http://www.ncjrs.gov/App/publications/abstract.aspx?ID=200314

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