Hawala Networks: The Paperless Trail of Terrorist Financing | Bennett Seftel, The Cipher Brief
Perhaps one of the most mystifying aspects of terrorist financing is the ability for terrorist organizations to direct capital from one location to another without the use of institutionalized banking systems. To accomplish this objective, terrorist groups turn to hawala networks as a means of moving funds undetected.
U.S. Efforts to Combat Illicit Financial Networks | Celina Realuyo, Former Director, U.S. State Department Counterterrorism Finance Programs
“Trust and the extensive use of connections, such as family relationships or regional affiliations, distinguish hawalas from other remittance systems. Unlike traditional banking, hawalas make minimal (often no) use of any sort of negotiable instrument. Money transfers take place based on communications between members of a network of hawaladars or hawala dealers.”
Minimizing Abuse of Hawalas | John Cassara, Former Special Agent, U.S. Treasury Department
There is no regulatory “solution” for hawala networks and our adversaries understand this. Osama bin Laden once referred to taking advantage of “cracks inside the Western financial system.” The hawala system isn’t a crack, it’s a canyon.