Is Hawala banking legitimate? Why? (480-520 words)

Answer

1. Hawala Banking System

   Hawala refers to a technique of transmitting money without an actual movement of any money. It is regarded as an alternate transmittal channel that occurs externally to the traditional systems of banking (Balasubramanian & Amanullah, 2018). The Hawala banking system, however, is an over-utilized word given to an area of money transmission procedures known to predate the conventional Western banking system. It takes responsibility for money but on a massive scale, estimated on an annual basis and in £100s of billions. For that reason, Hawala users and clients are significant targets of the systematized money laundering gangs similar to the conventional banks. This paper assesses the legitimacy of the Hawala banking system.

   Wholly, the authorities in place have not been successful in establishing the scale of money laundering, both on a national and global level. Consensus has it that a substantial amount of worldwide Gross Domestic Product is perpetuated by an underground economic activity, numerous £trillion at least, comprising of the Hawala. It confirms the idea that the regulators are faced with a hard time trying to assess and police the money laundering activity. It also comes out that London is currently deemed by several sources to be the world’s capital of money laundering activities. Regrettably, the conventional informal approaches employed as money management strategies as well as a preference for cash by individual Hawala businesses implies that it creates a favorable platform for criminal gangs. Although the legal forces recognize this fact, most of them turn out to be uncompromising when handling the Hawaladars suspects and their clients alike. When appropriately established, a Hawala business is expected to comply with the firm anti-money laundering regulations under the protocols set forth by both the Financial Conduct Authority and the HMRC.

   As a consequence, the Co Limited, in conjunction with Mark Jenner, is recurrently requested to assess and scrutinize Hawala-related transaction and the entire business purposely to determine the extent of legitimate trade and business taking place (Sharif, Mahama, & Farooqi, 2016). In most cases, the assigned authorities assume that since a transaction is entirely Hawala, it is considered to be criminal. So far, Hawala Banking is accountable for the safe and cost-efficient transfers of vast amounts of capital being transferred legitimately across the world and to a considerable proportion of the populace (Balasubramanian & Amanullah, 2018). It is essential for an Independent Hawala Expert to give a testimony or a detailed description of the system procedures to the Court, in a precise order that the relevant issues can be handled, and as a basis for the fundamental money transfers.

   Mark Jenner- a highly recognized independent Hawala Banking Expert- has supportively provided an acceptable analysis and rational explanation to the Court of Hawala framework, regardless of the nature of the real money laundering offenses that have been investigated before (Soudjin, 2015). In several cases, the expert has assessed and reported on the authentic facets of the Hawala banking procedures and is commonly requested to trace and further give an explanation to the alleged money laundering transactions (Sharif, Mahama, & Farooqi, 2016). In conclusion, Hawala banking is a legitimate system because it provides an account of all transactions it establishes and has worked with recognizable corporations without any compromises arising.