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This study aims to convey the understanding of the ecosystem – how “hundi” works on the border trade between Myanmar and northern Thailand, which is an informal transfer system and is widely used as an alternative banking system. Even though the role of hundi is unable to declare the sources of money under the standard settlement of formal banking system, a failure to operate of its official mechanism are carrying using hundi, as a financial platform across the border between Thailand and Myanmar. This study surveys the best practice mechanism for the regional and international cooperation.

This paper draws on relevant literature, open-source reporting, and interviews with more than 30 interviewees on the border between Thailand and Myanmar. Interviewees includes border-trader, money changer, money transfer operators, business leaders, hundi operators, immigrant labors, government officials and commercial banking staffs.

This study provides a unique insight of hundi system, which work as the alternative mode of formal banking. It is an informal fund transfer payment platform used on the border between Thailand and Myanmar in the past five decades. It insists that hundi plays a significant role in both substitution and complementary on the trade and payment across the border of Myanmar–Thailand. Even though confronting with the barriers of financing of terrorism (anti money laundering AML/combating the financing of terrorism CFT) risk, the competition with the expanding and modernizing formal banking sector, and the introduction of Fintech and mobile money services. In the short term, these are unlikely to eliminate the hundi system completely, but may instead push hundi operators towards adopting these networks and technologies in their own operations.

This paper will be a useful source for academics, development professionals, policymakers, law enforcement agencies and business actors who are seeking to understand Myanmar’s informal payment system, hundi.

This is the latest work for border trade payment or trade financing role of hundi which has hidden under the informal market of the border for several decades. It has few research of hundi on border trade and payment, particularly after the military coup in 2021 which made hundi return to be on the spotlight and simultaneous mechanism of border trade and payment ecosystem of Myanmar. This paper will be a useful source for academics, development professionals, policymakers, law enforcement agencies and business actors who are eager to understand Myanmar’s informal payment system, hundi, especially during the hardship.

The purpose of this paper is to examine Myanmar’s “hundi” system, an informal value transfer system used widely by local Myanmar citizens and offshore migrant workers to remit money domestically and internationally. Due to historically stringent banking and foreign exchange controls and a lack of domestic and internationally linked financial services, the system grew to become the dominant medium for remittances in Myanmar. It also remains unregulated despite authorities acknowledging its use in criminal and terrorist activity. However, with an expanding and modernising financial sector, there is now increasing competition and challenges facing Myanmar’s hundi system.

This paper draws on available literature and open source reporting, as well as interviews with former Myanmar Police Force officials.

This study provides a unique insight into Myanmar’s hundi system, its history and the challenges it faces. The once dominant system remains a known anti-money laundering and countering the financing of terrorism (AML/CFT) risk and is having to compete with an expanding and modernising formal banking sector and the introduction of fintech and mobile money services. In the short term, these are unlikely to eliminate the hundi system completely, but may instead push hundi operators towards adopting these networks and technologies in their own operations.

Myanmar remains a very under-researched area and there has been a limited focus on its informal hundi remittance system and related AML/CFT issues. This paper will be a useful source for academics, development professionals, policymakers, law enforcement agencies and private sector actors seeking to understand Myanmar’s informal remittance system.

The purpose of this research paper is to consider the unique and even positive nature of hawalas and other informal fund transfer systems (IFTs) in the developing world.

Reviewing primary and secondary reports from national regulators, international organizations, and academics, the paper questions the conventional view that IFTs should be subject to extensive regulation and scrutiny because they have been abused by some participants. Many positive characteristics of hawalas – speed, transaction cost, cultural convenience, and versatility – also contribute to their abuse. The paper examines the modern uses of hawalas, including legitimate – remittances from migrant workers, humanitarian and emergency aid, personal investments – and illegitimate – money laundering, terrorist financing, tax and customs evasion, circumventing exchange controls – applications. The paper then discusses legal issues involving IFTs in developing and developed countries, discussing factors the international community should consider when designing regulatory systems. The paper reviews developing world IFT regulation in the UAE, Afghanistan, Somalia, the Eastern and South African Anti‐Money Laundering Group, and Columbia, and developed world regulation in The Netherlands, the UK, and the USA.

The paper concludes that IFTs are robust in jurisdictions where formal banking systems are absent or weak, or where structural obstacles distort foreign exchange and other financial markets.

Looking forward, the paper considers, inter alia, licensing or registration requirements and the rationale for choosing one over the other, and the need for competent authority due diligence on IFT operators.

The purpose of this paper is to examine the recommendations of an influential international advisory body, the Financial Action Task Force (FATF), towards regulation of Alternative Remittance Systems (ARSs).

The research design is a comparative analysis of Afghanistan and the United Arab Emirates, using available FATF documentation and external sources.

The analysis shows that FATF is right in pointing out that ARSs are useful vehicles for criminals to move operational expenses and launder the proceeds of their crimes. However, based on the cases of Afghanistan and the United Arab Emirates (UAE), it is argued that FATF's main approach of seeking to integrate these informal, traditional systems into the sphere and regulations of the formal banking system can be ineffective and even counterproductive in developing countries. Rather than taking a genuinely risk‐based approach, all ARS operators are required to be registered or licensed, conduct Customer Due Diligence (CDD) and fill out Suspicious Transaction Reports (STRs), just like commercial banks.

The impact of mandatory registration and requiring CDD and STRs has been negligible in Afghanistan and the UAE. Therefore, the article calls for new approaches to control money laundering in ARSs.

The paper is the first independent, comparative case study analysis of FATF regulations and implementation. It illustrates the limited knowledge/research in the field, and the inherent limitations of the current regulatory approach.

The purpose of this paper is to describe how informal money transfer system known as hawala works in Somalia. The paper also intends to contribute to the current debate on the lawlessness and economics of governance.

The paper uses an institutional approach and a simple game theoretical model. The author interviewed agents and informants of the hawala system but mainly relied on surveying the literature.

To support economic relationships and increase the future cost of hold ups by their agents, the hawala companies, with the help of two main social institutions, use seven main strategies.

A research on contract enforcement should involve with the contract partners (i.e. firms and agents) and third part enfocers (i.e. social groups). However, the author findings are based on surveying the existing literature and interviewing on a small number of agents and other informants in the West. Further, research should examine the practical experience of owners/managers of the firms and the traditional/religious leaders.

Establishing future formal commercial laws in Somalia, currently functioning informal mechanisms should be taken into great consideration.

This paper is one of very few research studies on the hawala system. Further more, little if any attention has been paid on economic governance aspect of the system by these studies. According to the authors' knowledge the paper is the only one that considers economic governance with the case of complete picture of statelessness in our contemporary world.

The aim of this paper is to compare the regulatory frameworks for informal remittance systems in the UK, Germany, The Netherlands, Sweden and Norway.

This study evaluates the effects of the different regulatory frameworks, in terms of level of control and quality of remittance services. It relies on reports from the Financial Action Task Force (FATF), law enforcement and regulatory agencies and the World Bank. It also draws heavily on academic literature and migrant household surveys.

There are major differences between the countries in how to regulate Hawala and other informal remittance systems. Even though all countries have challenges in regulating this sector, it seems that a simplified registration regime for money transfer operators is the most suitable option for improving both the level of control and the quality of remittance services. Looking at regulatory changes during the last decade, it appears that the national policies have converged towards a medium level.

This paper contributes to the debate on Hawala regulation by empirically evaluating how successful five different national policies have been. It also presents an updated picture of national regulations by including changes incurred by the EU Payment Services Directive (2007/64/EC), which was implemented in 2009 and 2010.

Terrorism finance (TF) has been aptly termed as the lifeblood of terrorism. TF provides funds for terrorist activities. Terrorists mobilize funds by using the formal banking system, informal value-transfer systems, hawalas, Hundis, and the oldest method of asset transfer. They may raise funds from legitimate sources, such as personal donations and profits from businesses and charitable organizations, as well as from criminal sources, like the drug trade, the smuggling of weapons and other goods, fraud, kidnapping, and extortion. Countering the financing of terrorism is a far greater challenge throughout the world. The objectives of the chapter are as follows: (1) to identify the different sources of terrorism financing, (2) to analyze various ways of moving terrorism funds globally, and (3) to examine the initiatives taken to counter terrorism financing.

Alternate remittance systems (ARS) are inherently not illegal; however, the nature of their activities has mostly been linked with money laundering and terrorist financing, which raises several questions as to why businesses in Ghana rely on these systems to conduct their cross-border trade. The purpose of this study is seeks to understand the nature of ARS in Ghana and analyse why business owners rely on them for their transactions.

Three companies were selected for the case study analysis. This research paper used a qualitative data analysis for the study. Interviews, direct participant observation and documentary review were the main techniques for data collection. The multiple sources of evidence helped to reduce the potential bias of the single method.

This paper found that some businesses using the system in Ghana can acquire unsecured loans at little or no interest cost, which provides a good source of funding to support business growth. Unlike other studies, this study proves that in some instances, ARS operators transact business with the clients they do not, particularly trust. Within the context of this study, this paper found evidence that supports money laundering, but the underlining crime is mostly tax evasion. The adoption of the system is an attempt to disguise the proceeds of the tax evasion crime and clean them through business operations.

This analysis was based on the strain theory from the perspective of the clients. Future studies can focus attention on the ARS operators and understand their perspectives. Several other fraud theories could be used as a lens to understand the phenomena in Ghana and other jurisdictions.

The study throws more light on a “secret” or an underground banking system that operates in Ghana. It provides insights that can guide regulatory authorities in their policy implementation. The need for stricter enforcement of the law has also been highlighted.

To the best of the authors’ knowledge, this study is original, as it focuses on a sector that is highly secretive but has significant implications on the Ghanaian economy.

The purpose of this paper is to highlight criticism of attempts to impose regulations on hawala and other informal value transfer systems (IVTSs), in light of their importance in the lives of people in the most vulnerable sectors of global society.

Review of scholarly, public‐policy, and legal literature on hawala and other IVTSs.

Most attempts to regulate hawala and other IVTSs seem redundant of existing regimes, or, worse, unreasonably punitive when their social utility is considered.

A contribution to the debate on the supposed need to regulate hawala and other IVTSs favored by the poorest and most vulnerable sectors of global society.

Trust within hawala networks (HN) (a type of deeply embedded informal value transfer network) has been associated with minimal bureaucracy, relationship versatility and low operational costs. In the absence of formal governance structures, HN business relationships largely depend on trust as a control mechanism that brings operational efficiency and transactional effectiveness. However, a basic and a static view of HN business trust has been reported. This paper aims to track the progress and development of trust within HN. More specifically, this paper charts HN relationship trust transformation from inception to maturity. Social exchange theory (SET) and Dwyer et al. (1987) topology of formal business relationship development were used as conceptual frameworks to study development of trust within HN.

Twenty-five in-depth interviews were conducted with HN members in the South Asia region. Chain referral sampling was used to contact and recruit suitable respondents within the semiscattered HN. The data were collected from practicing and retired HN members from Qatar, Saudi Arabia and Pakistan. The data were analyzed using keyword categorization and further substantiated, and validated, by NVivo analysis.

Four types of trust (i.e. calculative, verifiable, reciprocal and earned) were identified in HN relationships. It was revealed that trust progressed in a stepwise fashion from calculative trust (basic trust form) to earned trust (ultimate trust form). SET explained the progression of trust in terms of key drivers of different trust types at various stages of HN exchanges and relationships. In addition, it was observed that HN trust development followed Dwyer et al. (1987) topology of business relationship development.

This study extended the oversimplistic treatment of trust within HN by looking into its different types and its transformation over time. More specifically, this research provided an insight into how various types of trust were used within deeply embedded informal business networks to maintain and nurture business exchanges.