Hawala and money laundering: a Malaysian perspective

Abstract

Defines “Hawala” as an Arabic word meaning “change” or “transform”. Describes it as a system which goes back to 11th century India and allows money to be transferred around the globe without actual money movement or wire transfers, depending on a system of family, clan or ethnic connections. Outlines the benefits of hawala remittance as its cost effectiveness, reliability, efficiency, speed, and convenience for foreign workers who may be semi‐illiterate and certainly not familiar with formal banking systems. Relates this to actual hawala money changers in Malaysia’s Klang Valley, who provided the information for this article, and to the potential of the hawala system to facilitate money laundering and, ultimately, terrorism. Reports that Malaysia is a country named by the Pentagon as a country in which terrorists launder funds, and that it has implemented focused and wideranging measures to combat this menace.

Citation

Shanmugam, B. (2004), "Hawala and money laundering: a Malaysian perspective", Journal of Money Laundering Control, Vol. 8 No. 1, pp. 37-47. https://doi.org/10.1108/13685200510621181