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{{Short description|informal currency transfer system}}
{{for|illegal use of hawala|hawala and crime}}
{{Short description|Informal currency transfer system}}
{{For |the community in the Persian Gulf states|Huwala}}
{{For |the community in the Persian Gulf states|Huwala}}
{{Financial market participants}}
{{Financial market participants}}


'''Hawala''' or '''hewala''' ({{lang-ar|حِوالة}} {{lang|ar-Latn|ḥawāla}}, meaning ''transfer'' or sometimes ''trust''), also known as '''{{lang|fa-Latn|havaleh}}''' in [[Persian language|Persian]],<ref>{{Cite web|title=How Iranians are avoiding sanctions|url=https://www.ft.com/content/6ca69788-0a48-11dd-b5b1-0000779fd2ac|url-status=live}}</ref> and '''{{lang|so|xawala}}''' or '''{{lang|so|xawilaad}}'''<ref name=HMGov>{{cite book |last1=Thompson |first1=Edwina |title=Safer corridors rapid assessment — Somalia and UK banking |date=September 2013 |publisher=[[HM Government]] |page=5 |url=https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/283826/SAFER_CORRIDORS_RAPID_ASSESSMENT__2013__SOMALIA___UK_BANKING.PDF |access-date=14 May 2016 }}</ref> in [[Somali language|Somali]], is a popular and [[informal value transfer system]] based not on the movement of cash, or on telegraph or computer network wire transfers between banks, but instead on the performance and honour of a huge network of money brokers (known as ''hawaladars''). While hawaladars are spread throughout the world, they are primarily located in the [[Middle East]], [[North Africa]], the [[Horn of Africa]], and the [[Indian subcontinent]], operating outside of, or parallel to, traditional banking, financial channels, and [[remittance]] systems. Hawala follows [[Islam]]ic traditions but its use is not limited to [[Muslims]].<ref name="Vaknin">{{cite web |last1=Vaknin |first1=Sam |title=Hawala, or the Bank that Never Was |url=http://samvak.tripod.com/nm104.html |website=samvak.tripod.com |access-date=5 September 2017 |date=June 2005 |archive-url=https://web.archive.org/web/20170920054104/http://samvak.tripod.com/nm104.html |archive-date=20 September 2017 |url-status=dead }}</ref>
'''Hawala''' or '''hewala''' ({{lang-ar|حِوالة}} {{lang|ar-Latn|ḥawāla}}, meaning ''transfer'' or sometimes ''trust''), also known as '''{{lang|fa-Latn|havaleh}}''' in [[Persian language|Persian]],<ref>{{Cite web|title=How Iranians are avoiding sanctions|url=https://www.ft.com/content/6ca69788-0a48-11dd-b5b1-0000779fd2ac|url-status=live|access-date=2018-07-31|archive-date=2018-07-31|archive-url=https://web.archive.org/web/20180731031418/https://www.ft.com/content/6ca69788-0a48-11dd-b5b1-0000779fd2ac}}</ref> and '''{{lang|so|xawala}}''' or '''{{lang|so|xawilaad}}'''<ref name=HMGov>{{cite book |last1=Thompson |first1=Edwina |title=Safer corridors rapid assessment — Somalia and UK banking |date=September 2013 |publisher=[[HM Government]] |page=5 |url=https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/283826/SAFER_CORRIDORS_RAPID_ASSESSMENT__2013__SOMALIA___UK_BANKING.PDF |access-date=14 May 2016 |archive-date=10 October 2015 |archive-url=https://web.archive.org/web/20151010082903/https://www.gov.uk/government/uploads/system/uploads/attachment_data/file/283826/SAFER_CORRIDORS_RAPID_ASSESSMENT__2013__SOMALIA___UK_BANKING.PDF |url-status=live }}</ref> in [[Somali language|Somali]], is a popular and [[informal value transfer system]] based not on the movement of cash, or on telegraph or computer network wire transfers between banks, but instead on the performance and honour of a huge network of money brokers (known as ''hawaladars''). While hawaladars are spread throughout the world, they are primarily located in the [[Middle East]], [[North Africa]], the [[Horn of Africa]] and the [[Indian subcontinent]]. They operate outside of, or parallel to, traditional banking, financial channels and [[remittance]] systems. Hawala follows [[Islam]]ic traditions but its use is not limited to [[Muslims]].<ref name="Vaknin">{{cite web |last1=Vaknin |first1=Sam |title=Hawala, or the Bank that Never Was |url=http://samvak.tripod.com/nm104.html |website=samvak.tripod.com |access-date=5 September 2017 |date=June 2005 |archive-url=https://web.archive.org/web/20170920054104/http://samvak.tripod.com/nm104.html |archive-date=20 September 2017 |url-status=dead }}</ref>


==Origins==
==Origins==
The hawala system originated in [[India]].<ref>{{cite journal|title=The Hawala Alternative Remittance System and its Role in Money Laundering|url=https://www.treasury.gov/resource-center/terrorist-illicit-finance/Documents/FinCEN-Hawala-rpt.pdf}}</ref> It has existed since the 8th century between Indian, Arabic, and Muslim traders who operated alongside the [[Silk Road]] and beyond, as a protection against theft. It is believed to have arisen in the financing of long-distance trade around the emerging capital trade centers in the early medieval period. In [[South Asia]], it appears to have developed into a fully-fledged money market instrument, which was only gradually replaced by the instruments of the formal [[bank|banking system]] in the first half of the 20th century.
The hawala system originated in [[India]].<ref>{{cite journal|title=The Hawala Alternative Remittance System and its Role in Money Laundering|url=https://www.treasury.gov/resource-center/terrorist-illicit-finance/Documents/FinCEN-Hawala-rpt.pdf|journal=|access-date=2016-10-16|archive-date=2016-12-28|archive-url=https://web.archive.org/web/20161228041941/https://www.treasury.gov/resource-center/terrorist-illicit-finance/Documents/FinCEN-Hawala-rpt.pdf|url-status=live}}</ref> Hawala as a legal concept came to be described as early as 1327, according to Schramm and Taube,<ref>{{cite journal |last1=Schramm |first1=Matthias |last2=Taube |first2=Markus |title=Evolution and institutional foundation of the hawala financial system |journal=[[International Review of Financial Analysis]] |date=1 January 2003 |volume=12 |issue=4 |pages=405–420 |doi=10.1016/S1057-5219(03)00032-2 |url=https://www.sciencedirect.com/science/article/abs/pii/S1057521903000322 |access-date=21 June 2022 |language=en |issn=1057-5219}}</ref><ref>{{cite news |last1=Mukherjee |first1=Andy |title=The Centuries-Old Financial System Better Than DeFi |url=https://www.bloomberg.com/opinion/articles/2022-06-20/defi-can-t-hold-a-candle-to-the-centuries-old-trust-based-system-called-hawala |access-date=21 June 2022 |work=[[Bloomberg News]] |date=20 June 2022 |language=en}}</ref> though the actual practice has existed since the 8th century between Indian, Arab and Muslim traders who operated alongside the [[Silk Road]] and beyond, as a protection against theft. It is believed to have arisen in the financing of long-distance trade around the emerging capital trade centers in the early medieval period. In [[South Asia]], it appears to have developed into a fully-fledged money market instrument, which was only gradually replaced by the instruments of the formal [[bank|banking system]] in the first half of the 20th century.


"Hawala" itself influenced the development of the [[Agency (law)|agency]] in [[common law]] and in [[civil law (private law)|civil laws]], such as the ''aval'' in [[Law of France|French law]] and the ''avallo'' in Italian law. The words ''aval'' and ''avallo'' were themselves derived from ''hawala''.<ref>{{Cite journal |last=Badr |first=Gamal Moursi |title=Islamic Law: Its Relation to Other Legal Systems |journal=[[American Journal of Comparative Law]] |volume=26 |issue=2 [Proceedings of an International Conference on Comparative Law, Salt Lake City, Utah, February 24–25, 1977] |date=Spring 1978 |pages=187–98 |doi=10.2307/839667 |jstor=839667}}</ref> The transfer of [[debt]], which was "not permissible under [[Roman law]] but became widely practiced in medieval Europe, especially in [[commercial transaction]]s", was due to the large extent of the "trade conducted by the Italian cities with the Muslim world in the Middle Ages". The agency was also "an institution unknown to Roman law" as no "individual could conclude a binding contract on behalf of another as his [[Agent (law)|agent]]". In Roman law, the "contractor himself was considered the party to the contract and it took a second contract between the person who acted on behalf of a principal and the latter in order to transfer the rights and the obligations deriving from the contract to him". On the other hand, Islamic law and the later common law "had no difficulty in accepting agency as one of its institutions in the field of contracts and of obligations in general".<ref>{{Cite journal|title=Islamic Law: Its Relation to Other Legal Systems|first= Gamal Moursi|last=Badr|journal=The American Journal of Comparative Law |volume=26|issue=2 [Proceedings of an International Conference on Comparative Law, Salt Lake City, Utah, February 24–25, 1977]|date=Spring 1978|pages=187–98 [196–8]|doi=10.2307/839667 |jstor=839667}}</ref>
"Hawala" itself influenced the development of the [[Agency (law)|agency]] in [[common law]] and in [[civil law (private law)|civil laws]], such as the ''aval'' in [[Law of France|French law]] and the ''avallo'' in Italian law. The words ''aval'' and ''avallo'' were themselves derived from ''hawala''.<ref>{{Cite journal |last=Badr |first=Gamal Moursi |title=Islamic Law: Its Relation to Other Legal Systems |journal=[[American Journal of Comparative Law]] |volume=26 |issue=2 [Proceedings of an International Conference on Comparative Law, Salt Lake City, Utah, February 24–25, 1977] |date=Spring 1978 |pages=187–98 |doi=10.2307/839667 |jstor=839667}}</ref> The transfer of [[debt]], which was "not permissible under [[Roman law]] but became widely practiced in medieval Europe, especially in [[commercial transaction]]s", was due to the large extent of the "trade conducted by the Italian cities with the Muslim world in the Middle Ages". The agency was also "an institution unknown to Roman law" as no "individual could conclude a binding contract on behalf of another as his [[Agent (law)|agent]]". In Roman law, the "contractor himself was considered the party to the contract and it took a second contract between the person who acted on behalf of a principal and the latter in order to transfer the rights and the obligations deriving from the contract to him". On the other hand, Islamic law and the later common law "had no difficulty in accepting agency as one of its institutions in the field of contracts and of obligations in general".<ref>{{Cite journal|title=Islamic Law: Its Relation to Other Legal Systems|first= Gamal Moursi|last=Badr|journal=The American Journal of Comparative Law |volume=26|issue=2 [Proceedings of an International Conference on Comparative Law, Salt Lake City, Utah, February 24–25, 1977]|date=Spring 1978|pages=187–98 [196–8]|doi=10.2307/839667 |jstor=839667}}</ref>
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[[Image:Hawala.png|thumb|Hawala example transaction; see text for an explanation]]
[[Image:Hawala.png|thumb|Hawala example transaction; see text for an explanation]]
The figure shows how hawala works: (1)&nbsp;a&nbsp;customer (''A'', left-hand side) approaches a hawala broker (''X'') in one city and gives a sum of money (red arrow) that is to be transferred to a recipient (''B'', right-hand side) in another, usually foreign, city. Along with the money, he usually specifies something like a password that will lead to the money being paid out (blue arrows). (2b)&nbsp;The hawala broker ''X'' calls another hawala broker ''M'' in the recipient's city, and informs ''M'' about the agreed password, or gives other disposition of the funds. Then, the intended recipient (''B''), who also has been informed by ''A'' about the password&nbsp;(2a), now approaches ''M'' and tells him the agreed password&nbsp;(3a). If the password is correct, then ''M'' releases the transferred sum to ''B'' (3b), usually minus a small commission. ''X'' now basically owes ''M'' the money that ''M'' had paid out to ''B''; thus ''M'' has to trust ''X''{{'}}s promise to settle the debt at a later date.
The figure shows how hawala works: (1)&nbsp;a&nbsp;customer (''A'', left-hand side) approaches a hawala broker (''X'') in one city and gives a sum of money (red arrow) that is to be transferred to a recipient (''B'', right-hand side) in another, usually foreign, city. Along with the money, he usually specifies something like a password that will lead to the money being paid out (blue arrows). (2b)&nbsp;The hawala broker ''X'' calls another hawala broker ''M'' in the recipient's city, and informs ''M'' about the agreed password, or gives other disposition of the funds. Then, the intended recipient (''B''), who also has been informed by ''A'' about the password&nbsp;(2a), now approaches ''M'' and tells him the agreed password&nbsp;(3a). If the password is correct, then ''M'' releases the transferred sum to ''B'' (3b), usually minus a small commission. ''X'' now owes ''M'' the money that ''M'' had paid out to ''B''; thus ''M'' has to trust ''X''{{'}}s promise to settle the debt at a later date.


The unique feature of the system is that no [[Promissory note|promissory instruments]] are exchanged between the hawala brokers; the transaction takes place entirely on the [[honour system]]. As the system does not depend on the legal enforceability of claims, it can operate even in the absence of a legal and juridical environment. Trust and extensive use of connections are the components that distinguish it from other remittance systems. Hawaladar networks are often based on membership in the same family, village, clan, or ethnic group, and cheating is punished by effective excommunication and "loss of honour"—leading to severe economic hardship.<ref name="Vaknin" />
The unique feature of the system is that no [[Promissory note|promissory instruments]] are exchanged between the hawala brokers; the transaction takes place entirely on the [[honour system]]. As the system does not depend on the legal enforceability of claims, it can operate even in the absence of a legal and juridical environment. Trust and extensive use of connections are the components that distinguish it from other remittance systems. Hawaladar networks are often based on membership in the same family, village, clan or ethnic group, and cheating is punished by effective excommunication and "loss of honour" that leads to severe economic hardship.<ref name="Vaknin" />


Informal records are produced of individual transactions, and a running tally of the amount owed by one broker to another is kept. Settlements of debts between hawala brokers can take a variety of forms (such as goods, services, properties, transfers of employees, etc.), and need not take the form of direct cash transactions.
Informal records are produced of individual transactions, and a running tally of the amount owed by one broker to another is kept. Settlements of debts between hawala brokers can take a variety of forms (such as goods, services, properties, transfers of employees, etc.), and need not take the form of direct cash transactions.
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==Regional variants==
==Regional variants==
[[Dubai]] has been prominent for decades as a welcoming hub for hawala transactions worldwide.<ref>{{Cite web|url=https://www.treasury.gov/resource-center/terrorist-illicit-finance/Documents/FinCEN-Hawala-rpt.pdf|title=Hawala|website=www.treasury.gov|publisher=Financial Crimes Enforcement Network with Interpol/FOPAC|access-date=October 16, 2016}}</ref>
[[Dubai]] has been prominent for decades as a welcoming hub for hawala transactions worldwide.<ref>{{Cite web|url=https://www.treasury.gov/resource-center/terrorist-illicit-finance/Documents/FinCEN-Hawala-rpt.pdf|title=Hawala|website=www.treasury.gov|publisher=Financial Crimes Enforcement Network with Interpol/FOPAC|access-date=October 16, 2016|archive-date=December 28, 2016|archive-url=https://web.archive.org/web/20161228041941/https://www.treasury.gov/resource-center/terrorist-illicit-finance/Documents/FinCEN-Hawala-rpt.pdf|url-status=live}}</ref>


===South Asia===
===South Asia===
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====Hundis====
====Hundis====
{{main article|hundi}}
{{main article|hundi}}
[[File:1951 Bombay Province Rs 2500 Hundi.jpg|thumbnail|right|A 1951 hundi of Bombay Province for Rs 2500 with a pre-printed [[revenue stamp]].]]
[[File:1951 Bombay Province Rs 2500 Hundi.jpg|thumbnail|right|A 1951 hundi of Bombay Province for Rs 2500 with a pre-printed [[revenue stamp]]]]
The ''hundi'' is a financial instrument that developed on the Indian sub-continent for use in trade and credit transactions. Hundis are used as a form of remittance instrument to transfer money from place to place, as a form of credit instrument or IOU to borrow money and as a [[bill of exchange]] in trade transactions. The [[Reserve Bank of India]] describes the Hundi as "an unconditional order in writing made by a person directing another to pay a certain sum of money to a person named in the order."<ref>[http://rbi.org.in/scripts/ms_hundies.aspx Hundies], Reserve Bank of India, 2013. Retrieved 26 November 2013. [https://web.archive.org/web/20131126010531/http://rbi.org.in/scripts/ms_hundies.aspx Archived here.]</ref>
The ''hundi'' is a financial instrument that developed on the Indian sub-continent for use in trade and credit transactions. Hundis are used as a form of remittance instrument to transfer money from place to place, as a form of credit instrument or IOU to borrow money and as a [[bill of exchange]] in trade transactions. The [[Reserve Bank of India]] describes the Hundi as "an unconditional order in writing made by a person directing another to pay a certain sum of money to a person named in the order."<ref>[http://rbi.org.in/scripts/ms_hundies.aspx Hundies], Reserve Bank of India, 2013. Retrieved 26 November 2013. [https://web.archive.org/web/20131126010531/http://rbi.org.in/scripts/ms_hundies.aspx Archived here.]</ref>


===Horn of Africa===
===Horn of Africa===
According to the CIA, with the dissolution of Somalia's formal banking system, many informal money transfer operators arose to fill the void.  It estimates that such ''hawaladars'', ''xawilaad'' or ''xawala'' brokers <ref name="HMGov" /><ref>{{cite book|last1=Monbiot|author-link=George Monbiot|first1=George|title=How did we get into this mess?|date=2016|publisher=Verso|isbn=978-1-78478-362-4|pages=237–238|edition=First}}</ref> are now responsible for the transfer of up to $1.6 billion per year in remittances to the country,<ref name="CIAhaw">{{Citation |title=The World factbook |url=https://www.cia.gov/library/publications/the-world-factbook/ |publisher=[[Central Intelligence Agency]] |place=US |contribution-url=https://www.cia.gov/library/publications/the-world-factbook/fields/2116.html#so |contribution=Somalia}}.</ref> most coming from working Somalis outside Somalia.<ref name="CBShaw">{{Citation |url=http://www.somalbanca.org/economy-and-finance.html |publisher=Somal banca |newspaper=CBS |title=Economy & Finance: Hawaladars |access-date=2018-12-05 |archive-url=https://web.archive.org/web/20090124192809/http://somalbanca.org/economy-and-finance.html |archive-date=2009-01-24 |url-status=dead }}.</ref> Such funds have in turn had a stimulating effect on local business activity.<ref name="CIAhaw"/><ref name="CBShaw"/>
According to the [[Central Intelligence Agency|CIA]], with the dissolution of Somalia's formal banking system, many informal money transfer operators arose to fill the void.  It estimates that such ''hawaladars'', ''xawilaad'' or ''xawala'' brokers<ref name="HMGov" /><ref>{{cite book|last1=Monbiot|author-link=George Monbiot|first1=George|title=How did we get into this mess?|date=2016|publisher=Verso|isbn=978-1-78478-362-4|pages=237–238|edition=First}}</ref> are now responsible for the transfer of up to $1.6 billion per year in remittances to the country,<ref name="CIAhaw">{{Citation |title=The World factbook |url=https://www.cia.gov/library/publications/the-world-factbook/ |publisher=[[Central Intelligence Agency]] |place=US |contribution-url=https://www.cia.gov/library/publications/the-world-factbook/fields/2116.html#so |contribution=Somalia |access-date=2011-09-13 |archive-date=2013-05-10 |archive-url=https://web.archive.org/web/20130510200259/https://www.cia.gov/library/publications/the-world-factbook/ |url-status=dead }}.</ref> most coming from working Somalis outside Somalia.<ref name="CBShaw">{{Citation |url=http://www.somalbanca.org/economy-and-finance.html |publisher=Somal banca |newspaper=CBS |title=Economy & Finance: Hawaladars |access-date=2018-12-05 |archive-url=https://web.archive.org/web/20090124192809/http://somalbanca.org/economy-and-finance.html |archive-date=2009-01-24 |url-status=dead }}.</ref> Such funds have in turn had a stimulating effect on local business activity.<ref name="CIAhaw"/><ref name="CBShaw"/>


===West Africa===
===West Africa===
[[Tuareg rebellion (2012)|The 2012 Tuareg rebellion]] left Northern Mali without an official money transfer service for months. The coping mechanisms that appeared were patterned on the hawala system.<ref name=04385FSIHSD3>{{cite news |url=http://www.voanews.com/content/mail-western-union-black-market/1497859.html |title=Malians Shelter to Black Market to Transfer Cash |date=August 29, 2012 |publisher=[[Voice of America]] |access-date=2012-09-08 |archive-url=https://web.archive.org/web/20120901215342/http://www.voanews.com/content/mail-western-union-black-market/1497859.html |archive-date=September 1, 2012 |url-status=dead }}</ref>
[[Tuareg rebellion (2012)|The 2012 Tuareg rebellion]] left Northern Mali without an official money transfer service for months. The coping mechanisms that appeared were patterned on the hawala system.<ref name=04385FSIHSD3>{{cite news |url=http://www.voanews.com/content/mail-western-union-black-market/1497859.html |title=Malians Shelter to Black Market to Transfer Cash |date=August 29, 2012 |publisher=[[Voice of America]] |access-date=2012-09-08 |archive-url=https://web.archive.org/web/20120901215342/http://www.voanews.com/content/mail-western-union-black-market/1497859.html |archive-date=September 1, 2012 |url-status=dead }}</ref>
==Post-9/11 money laundering crackdowns==
Some government officials {{which|date=October 2017}} assert that hawala can be used to facilitate [[money laundering]], [[tax avoidance|avoid taxation]], and move wealth anonymously.{{citation needed|date=March 2014}} As a result, it is illegal in some U.S. states, India, and Pakistan.<ref>{{cite web |publisher=Treasury Financial Crimes Enforcement Network (FinCEN) |url=http://www.treasury.gov/resource-center/terrorist-illicit-finance/Documents/FinCEN-Hawala-rpt.pdf |title=The Hawala Alternative Remittance System and its Role in Money Laundering |first1=Patrick M. |last1=Jost |first2=Harjit Singh |last2=Sandhu |access-date=September 5, 2016 |archive-url=https://web.archive.org/web/20160612170258/https://www.treasury.gov/resource-center/terrorist-illicit-finance/Documents/FinCEN-Hawala-rpt.pdf |archive-date=June 12, 2016 |url-status=dead }}.</ref>
After the [[September 11, 2001 attacks|September 11 terrorist attacks]], the American government suspected that some hawala brokers may have helped terrorist organizations transfer money to fund their activities, and the [[9/11 Commission Report]] stated that "Al Qaeda frequently moved the money it raised by hawala".<ref>{{cite web|url=http://911.gnu-designs.com/Chapter_5.4.html|title=Al Qaeda Aims at the American Homeland - A Money Trail?|first=David A.|last=Desrosiers|website=911.gnu-designs.com}}</ref> As a result of intense pressure from the U.S. authorities to introduce systematic anti-money laundering initiatives on a global scale, a number of hawala networks were closed down and a number of hawaladars were successfully prosecuted for money laundering. However, there is little evidence that these actions brought the authorities any closer to identifying and arresting a significant number of terrorists or drug smugglers.<ref>{{cite journal|last=Passas|first=Nikos|title=Fighting terror with error: the counter-productive regulation of informal value transfers|journal=Crime, Law and Social Change|date=November 2006|volume=45|issue=4–5|pages=315–36|doi=10.1007/s10611-006-9041-5|s2cid=153709254|url=http://www.euromed-migration.eu/e1152/e1537/e2138/e2139/e2508/ENFightingTerrorwithErrorreadingmaterialsWG2ses1Luxembourg_eng.pdf|access-date=2011-06-16}}{{dead link|date=October 2017 |bot=InternetArchiveBot |fix-attempted=yes }}</ref> Experts emphasized that the overwhelming majority of those who used these informal networks were doing so for legitimate purposes, and simply chose to use a transaction medium other than state-supported banking systems.<ref name="Passas, Nikos 2006 pp. 46–62" /> Today, the hawala system in Afghanistan is instrumental in providing financial services for the delivery of emergency relief and humanitarian and developmental aid for the majority of international and domestic NGOs, donor organizations, and development aid agencies.<ref>{{Citation |publisher=The World Bank |url=http://www-wds.worldbank.org/external/default/main?pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000090341_20031016085357 |title=The money exchange dealers of Kabul – a study of the Hawala system in Afghanistan |pages=1 |first=Samuel Munzele |last=Maimbo |date=August 1, 2003 |access-date=September 5, 2016 |archive-url=https://web.archive.org/web/20120319194328/http://www-wds.worldbank.org/external/default/main?pagePK=64193027&piPK=64187937&theSitePK=523679&menuPK=64187510&searchMenuPK=64187283&siteName=WDS&entityID=000090341_20031016085357 |archive-date=March 19, 2012 |url-status=dead }}.</ref>
In November 2001, the Bush administration froze the assets of [[Al-Barakat]], a Somali remittance hawala company used primarily by a large number of [[Somali diaspora|Somali immigrants]]. Many of its agents in several countries were initially arrested, though later freed after no concrete evidence against them was found. In August 2006 the last Al-Barakat representatives were taken off the U.S. terror list, though some assets remain frozen.<ref name=Bbc060828>{{cite news |url=http://news.bbc.co.uk/2/hi/africa/5292750.stm |title=US ends Somali banking blacklist |date=August 28, 2006 |place=UK |work=[[BBC News]] |access-date =2007-02-24}}</ref> The mass media has speculated that [[Somali pirates|pirates from Somalia]] use the hawala system to move funds internationally, for example into neighboring Kenya, where these transactions are neither taxed nor recorded.<ref>{{cite web|url=https://www.npr.org/templates/transcript/transcript.php?storyId=126510891|title=Somali Pirates Take The Money And Run, To Kenya |publisher=[[NPR]] |access-date=2010-05-18|date= 2010-05-05}}</ref>
In January 2010, the [[Kabul]] office of New Ansari Exchange, [[Afghanistan]]'s largest hawala money transfer business, was closed following a raid by the Sensitive Investigative Unit, the country's national anti-[[political corruption]] unit, allegedly because this company was involved in [[money laundering|laundering]] profits from the illicit [[opium]] trade and the moving of cash earned by government allied warlords through extortion and drug trafficking. Thousands of records were seized, from which links were found between money transfers by this company and political and business figures and NGOs in the country, including relatives of President [[Hamid Karzai]].<ref>{{cite news |journal=The Times of India |url=http://timesofindia.indiatimes.com/world/south-asia/Afghan-hawala-ring-tied-to-Karzai-kin/articleshow/6302178.cms |title=Afghan hawala ring tied to Karzai kinh |date=August 13, 2010 |access-date= September 5, 2016}}</ref> In August 2010, Karzai took control of the task force that staged the raid, and the US-advised anti-corruption group, the Major Crimes Task Force. He ordered a commission to review scores of past and current anti-corruption inquests.<ref>{{cite news |newspaper=The Wall Street Journal |place=New York, NY, US |url=https://www.wsj.com/articles/SB10001424052748704638504575318850772872776 |title=Corruption Suspected in Airlift of Billions in Cash From Kabul |first=Matthew |last=Rosenberg |date=June 25, 2010 |access-date= September 5, 2016}}</ref>
Between October 2010 and June 2012, the U.S. government charged four Somali defendants with laundering $10,900 for [[Al-Shabaab (militant group)|al-Shabaab]] using hawalas. The defendants were Basaaly Saeed Moalin, Mohamed Mohamed Mohamud, Issa Doreh, and Ahmed Nasir Taalil Mohamud. The indictment relied upon illegally collected metadata under the [[Foreign Intelligence Surveillance Act]]. The convictions were upheld by the [[U.S. 9th Circuit Court of Appeals]].<ref>{{cite court |litigants=UNITED STATES V. MOALIN |url=https://cdn.ca9.uscourts.gov/datastore/opinions/2020/09/02/13-50572.pdf |court=D.C. Cir. |reporter=F.3d |date=September 2, 2020}}</ref>


==See also==
==See also==
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* [[Remittance|Global ranking of remittance by nations]]
* [[Remittance|Global ranking of remittance by nations]]
* [[Remittances to India]]
* [[Remittances to India]]
* [[Hundi]]
* [[Informal value transfer system]]
* [[Informal value transfer system]]
* [[Financial Action Task Force on Money Laundering|FATF]]
* [[Financial Action Task Force on Money Laundering|FATF]]
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* {{Citation | last = Ballard | first = Roger | url = http://www.casas.org.uk/papers/hawala.html | title = Hawala | type = collection of academic papers | publisher = Casas | place = UK | access-date = 2008-12-15 | archive-url = https://web.archive.org/web/20110519014433/http://www.casas.org.uk/papers/hawala.html | archive-date = 2011-05-19 | url-status = dead }}, exploring the operation of contemporary hawala networks, and the role they play in the transmission of migrant workers' remittances from [[Europe]] to [[South Asia]].
* {{Citation | last = Ballard | first = Roger | url = http://www.casas.org.uk/papers/hawala.html | title = Hawala | type = collection of academic papers | publisher = Casas | place = UK | access-date = 2008-12-15 | archive-url = https://web.archive.org/web/20110519014433/http://www.casas.org.uk/papers/hawala.html | archive-date = 2011-05-19 | url-status = dead }}, exploring the operation of contemporary hawala networks, and the role they play in the transmission of migrant workers' remittances from [[Europe]] to [[South Asia]].
* {{Citation | last = Bowers | first = Charles | url = http://works.bepress.com/charles_bowers/1/ | type = academic paper | title = The international legal/political consequences of hawala and money laundering | journal = Denver Journal of International Law and Policy | year = 2009 | access-date = 2009-03-17 | archive-date = 2010-08-29 | archive-url = https://web.archive.org/web/20100829074259/http://works.bepress.com/charles_bowers/1/ | url-status = dead }}.
* {{Citation | last = Bowers | first = Charles | url = http://works.bepress.com/charles_bowers/1/ | type = academic paper | title = The international legal/political consequences of hawala and money laundering | journal = Denver Journal of International Law and Policy | year = 2009 | access-date = 2009-03-17 | archive-date = 2010-08-29 | archive-url = https://web.archive.org/web/20100829074259/http://works.bepress.com/charles_bowers/1/ | url-status = dead }}.
* {{Citation | last = Thompson | first = Dr. Edwina A | url = http://siteresources.worldbank.org/SOUTHASIAEXT/Resources/Publications/448813-1164651372704/UNDC_Ch6.pdf | title = The Nexus of Drug Trafficking and Hawala in Afghanistan | publisher = The [[World Bank]] and the [[United Nations Office on Drugs and Crime]] (UNODC) }}.
* {{Citation | last = Thompson | first = Dr. Edwina A | url = https://citeseerx.ist.psu.edu/viewdoc/download?doi=10.1.1.366.9252&rep=rep1&type=pdf | title = The Nexus of Drug Trafficking and Hawala in Afghanistan | publisher = The [[World Bank]] and the [[United Nations Office on Drugs and Crime]] (UNODC) | citeseerx = 10.1.1.366.9252  }}.
* {{Citation | last = Wilson | first = John F | others = et al. | url = http://www.johnfwilson.net/resources/Hawala+Occasional+Paper+_3.24.03_.pdf | title = Informal Funds Transfer Systems: An Analysis of the Hawala System | publisher = [[International Monetary Fund]] | date = October 2003 | type = occasional paper | access-date = 2011-01-05 | archive-url = https://web.archive.org/web/20100923062551/http://johnfwilson.net/resources/Hawala+Occasional+Paper+_3.24.03_.pdf | archive-date = 2010-09-23 | url-status = dead }}.
* {{Citation | last = Wilson | first = John F | others = et al. | url = http://www.johnfwilson.net/resources/Hawala+Occasional+Paper+_3.24.03_.pdf | title = Informal Funds Transfer Systems: An Analysis of the Hawala System | publisher = [[International Monetary Fund]] | date = October 2003 | type = occasional paper | access-date = 2011-01-05 | archive-url = https://web.archive.org/web/20100923062551/http://johnfwilson.net/resources/Hawala+Occasional+Paper+_3.24.03_.pdf | archive-date = 2010-09-23 | url-status = dead }}.
* {{cite news| title= Fears over US hawala crackdown| url= http://news.bbc.co.uk/1/hi/world/middle_east/3463683.stm | work =BBC News | date=February 4, 2004 | location= London}}
* {{cite news| title= Fears over US hawala crackdown| url= http://news.bbc.co.uk/1/hi/world/middle_east/3463683.stm | work =BBC News | date=February 4, 2004 | location= London}}
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