chapter  9
18 Pages

Demystifying Hawala: A Look into its Social Organization and Mechanics 1

ByNikos. Passas

This chapter focuses on the routine practices and mechanics of hawala, an informal funds transfer system, which emerged in the Indian subcontinent and spread globally in recent decades. Hawala has come under suspicion of being a tool in the hands of al Qaeda and other terrorists, so a series of measures and policies have been taken internationally for its regulation and control. By focusing on the Pakistan hawala modus operandi, the chapter also explains the routes money follows before it reaches the final destination mostly in the hands of expatriates' extended families. By showing how these mechanics make economic sense, it makes a contribution to more sensitive, informed, fair and consensual law enforcement. The chapter outlines the social organization of South Asian hawala networks, often described as 'paperless' operations that leave no trails and facilitate serious financial crime and militant support.