Global Anti-Money Laundering:Enhancing The Effectiveness Of Existing Mechanisms With Mutual Respect To Cultural And Regulatory Differences Across Countries

Due to the fact that the Hawala System provides security, anonymity, and versatility to the user, there is increasing international concern about its potential to be abused by money laundering. However, there are limited means currently by which money laundering through the Informal Hawala System can be deterred, detected or prosecuted. The establishment of a robust AML regime through the Hawala System is a challenge because of differences in institutions, perspectives, and priorities among countries.After the assessment of the existing Anti-Money Laundering regime, it seems that outlawing the Hawala System will ultimately deprive law enforcement of potentially valuable information and drives the informal remittance providers further "underground."In addition, differences in laws and regulations internationally also pose a major challenge to law enforcement on regulating money laundering through the Hawala System. International cooperation between law enforcement and other authorities can also be improved through more socialized measures. Moreover, domestic law enforcement agencies should more actively assist in the work of overseas counterparts as reciprocity is indispensable for long term success. Also, education and outreach are the crucial components to building capacity among legitimate Hawala Providers who want to comply with the law and regulation, as there needs to be a greater understanding of how these systems operate. After all, the effectiveness of such a long term approach is obviously dependent upon high quality international cooperation between governments through softer mechanisms, with mutual respect to cultural and regulatory differences.