Title: Curbing the use of Hawala for money laundering and terrorist financing: global regulatory response and future challenges

Authors: M. Nauman Farooqi

Addresses: Ron Joyce Center for Business Studies, Mount Allison University, 144 Main Street, Sackville, NB E4L 1A7, Canada

Abstract: The objective of this paper is to examine the role of Hawala as an Informal Value Transfer System (IVTS) used for money laundering and terrorist financing activities. The paper will provide a background to Hawala as a form of IVTS and highlight the state of global regulatory response to curbing the illicit use of this otherwise benign form of IVTS. The paper will argue for a market mechanism based solution rather than control through regulatory regimes.

Keywords: IVTS; informal value transfer systems; Hawala; Hundis; currency; informal money transfer systems; money laundering; terrorist financing; money transfer infrastructures; financial regulation; terrorism; globalisation; terror; business governance; business ethics; economic crime prevention.

DOI: 10.1504/IJBGE.2010.029556

International Journal of Business Governance and Ethics, 2010 Vol.5 No.1/2, pp.64 - 75

Published online: 30 Nov 2009 *

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