The Hawala Extortion Method

18441 WordsAug 6, 201074 Pages
HAWALA INTRODUCTION [pic] Among the methods terrorists worldwide use to move money from regions that finance them to target countries some hardly leave any traceable trail. As regulators learned recently, one of the weak points in the payments chain through which illicit funds can enter is a system of traditional trust-based banking originating in southern Asia which is known as hawala. The word hawala is Hindi meaning "trust" or "exchange". Often used in relation with the word hundi which stands for "bill of exchange" hawala is an unofficial alternative remittance and money exchange system enabling the transfer of funds without their actual physical move. Traditional financial institutions may be involved…show more content…
For instance, in May and June 2001 the State Bank of Pakistan was said to have turned to hawala shops in Islamabad to buy dollars in order to support the own currency. Even top-ranking Western corporations turn to hawaladers for transactions to regions without a modern western-style banking system. In several OECD (Organization for Economic Cooperation and Development) member countries, licensed traders legally perform hawala. OECD Member Countries (And Year of joining) |Australia (1971) |Austria (1961) |Belgium (1961) | |Canada (1961) |Czech Republic (1995) |Denmark (1961) | |Finland (1969) |France (1961) |Germany (1961) | |Greece (1961) |Hungary (1996) |Iceland (1961) | |Ireland (1961) |Italy (1961) |Japan (1964) | |The Netherlands (1961) |New Zealand (1973) |Norway (1961) | |Poland (1996)

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