: Local and International Officials Call For Hawala Restrictions

Although the word “hawala” is a Hindi word for “trust,” the informal money exchange system has been used extensively by poor Muslim emigres from Africa and the Middle East. With streamlined payments, no interest, and relative anonymity, hawalas earned a Muslim following, but also the suspicion of US authorities who liken it to a Laurel and Hardy routine (Interpol flat out considers it a money laundering scheme). In the US, mostly poor Somali immigrants have been the ones using hawalas (since Somalia has no functioning government, much less a banking system) and have born the brunt of federal scrutiny. Restrictions have now extended to the Middle East as three Gulf states have established laws limiting hawalas (um… except Kuwait and Saudi Arabia). Defenders of hawalas point to the many innocent users who have no other option for exchanging money to poor areas of the world (except for the criminal activity Western governments are trying to discourage, of course).

Zahed Amanullah is associate editor of altmuslim.com.  He is based in London, England.