Regulating Hawala: Informal Remittances Post 9/11

Author :

Professor Frederick Ahwireng-Obeng and Claire Beswick

Pages :

11

Product Type :

Case

Reference # :

WBS-2013-18

Teaching Note :

not available

Institute:

Wits Business School, University of the Witwatersrand

Setting:

Africa

Year:

2013

Keywords:

Economics

Summary/Abstract:

In 2010, the officials of the Financial Action Task Force (FATF) were reviewing the problems of formalising informal financial systems in developing countries, and specifically addressing the hawala system in Africa. Hawala was a highly popular form of remittance transfer, especially where there were no banks or the banking system failed to offer clients ease of access and competitive costs. However, hawala was open to misuse as a means for both money laundering and the funding of terrorism. They wondered if and how the FATF could address these problems and whether its existing recommendations and interventions were sufficient.