Informal Value Transfer Systems

  • Alternative money remittance systems: Hawala, poey kuan, Chop shop, hundi. It is cheaper than sending international transfers.

  • Similar to Western Union in operation:

    • a customer attends a local business such as a trading business and deposits funds, asking that they be sent to another country. The customer receives a code which they communicate to their beneficiary, which enables them to collect the funds

    • The trader then asks his counterparty in another country to make the funds available upon production of the code.

    • The debt between the two traders is either settled as part of the usual trade process, or is balanced by incoming remittances

  • It can be used in any phase of money laundering

  • There is very little paper trail maintained

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