Unlicensed Money Transmitter (Hawala)

This method is used frequently by refugees who’ve fled war torn countries. It’s a way to send money back to remaining family members. I did a review of Asian refugees over 10 years ago who still use this method. Refugees fleeing the military regime of Burma/Myanmar had no other way to send money to family members. This is also used by criminal enterprise to launder money between the Mexican/US border. There are many reasons that people use money mules, but recently, desperation has lured unsuspecting victims in exchange for a percentage of the money transported. Read it here for my francophones, or below in English!

💸 Money laundering techniques 💸

➡️ The hawala system (also called Hundi 🇮🇳 or Chop Shop banking 🇨🇳)

Created centuries ago in India and China, before the establishment of Western financial systems, it was used to facilitate the movement of money safely and conveniently.

Traders who wanted to send funds back to their home countries deposited them with a hawala "banker".

For a small commission, the banker arranged for the funds to be made available to another "banker" in another country.

The two bankers then settled their accounts, usually once a year. 🤝

📈 The process is still popular today with immigrant populations or seasonal workers who wish to send (legally in this case) small amounts to their country of origin.

The main reasons for this are:

➡️ Low bank charges

➡️ The speed of exchanges ⚡️

➡️ Difficulties in opening a "normal" bank account

➡️ A lack of confidence in the traditional 🏦 banking system

⛔️ With the proliferation of anti-money laundering measures around the world, the system has unfortunately become more attractive to money 💰 launderers and terrorists. 💣

The main advantage for them is that there is almost no administrative trace.

Money transfers are made by coded messages, increasingly using encrypted messaging.

This is a particularly effective way to carry out the first stage of the money laundering cycle, the investment (of cash). 💶 💵 💷

Hawala "bankers" are usually traders, which allows them to mix the cash they receive with the legitimate product of their business, making the phenomenon difficult to detect.

Even with modern anti-money laundering tools, the system is still thriving today, with annual volumes running into billions of dollars or even tens of billions. 😢

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#compliance#financialcrime#moneylaundering#amlRaphaël Jérémiasz

Great illustration from Kerning Cultures! 👌