According to estimates by the World Bank and the IMF, informal remittance systems such as hawala and the Chinese “flying money” system aggregate more than $1 trillion every year.These informal financial systems are all somewhat different but they all offer the three C’s; they are “certain, convenient, and cheap.” Historically and culturally, they also all use trade-based value transfer in the process of “counter-valuation” or balancing the books between brokers. Most informal transactions are perfectly benign.They are found in our communities; for example, they are most commonly used for the remittance of wages back to loved ones in the home country. However, because they are so opaque and successfully avoid our traditional AML/CFT countermeasures, they are also often abused by criminals and terrorists.
In this talk, John Cassara, former U.S. intelligence officer and Treasury Special Agent, will explain where these systems are found and describe howthey operate via “money transfer without money movement.”Cassara will also describe how these ancient but efficient systems continue to evolve including the growing use of “mirror swaps.”This presentation will be very helpful for those seeking to better recognize informal financial systems and are curious as to how to improve our countermeasures.
1 ACAMS Credit **Please note that ACAMS credit for this virtual event is available to members of the Chapter only.