Anti-Money Laundering News and Information

“Hawalla”​ – Manipulating World Trade From Third World Countries To The Western World

“Hawalla” – merchandise being sent from third world countries to western countries –

What are the metods of “Hawalla” ?

The methods for realizing Hawala activty vary from the use of – money exchanges, banking systems, merchandise trade, couriers, virtual currencies – a crypto channels and more. Reflecting on the existence of the “Hawalla” system will lead to a more effective response by Western countries to the “Hawalla” system.

I will start by saying that there is a kind of reversal situation – “Hawalla” is an old-age method that utilizes advanced technological methods and not the other way around, as happens in most technology-challenged processes.

Utilization of the merchandise channel – the transfer of goods takes place today in a global and a dynamic way. Thus, Amazon, for example, works to fulfill orders and deliver goods from all over the world. If I have an Amazon store, which is based on goods shipped from one side of the world to the other, it seems that at least, when it comes to the process of transferring goods through the “Amazon” corporation the world has become safer.

However, it is necessary to develop defense and control mechanisms in order to prevent money laundering threw merchandise trade.

According to Fincen and Interpol, the most prominent goods in “Hawallah” context are –

  1. Gold.
  2. Used car trade.
  3. Carpet trade.
  4. Electronic products – cell phones, tablets, etc.

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In our understanding, the reason for the focus of “Hawala” players in using these goods are –

  1. The Ability to minimize the price of goods according to your needs.
  2. Geographical transportation – most of these goods are manufactured in third world countries and transported to Western countries.
  3. large volumes of goods – in trafficking large volumes of goods flexibility can be achived by manipulating the price or quantity according to the needs of the parties interested in money laundering activities.

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The lack of close control over the source of the goods, the price and the parties that conduct trade in this field, will allow continued utilization of the financial of trade infrastructure of Western countries.

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By Ilan Lochoff, February 21, 2021

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