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Most people in Western countries are more likely to associate the term underground banking with an automatic teller machine in a subway station, than with complex infrastructures of financial remittance that may be utilised either to by‐pass completely conventional banking facilities and processes, or else to connect with those same conventional banking facilities and processes only at selected points, at selected times and selected places. However, the low public profile of underground banking is in contrast to the increasingly high priority that governments, financial regulators and law enforcement agencies are giving to efforts to counter the facilitative role that underground banking can play in the activities of money launderers, organised crime, terrorist groups and tax evaders. Underground banking systems are playing an increasingly important role in the burgeoning tide of laundered money that is projected by the International Monetary Fund (IMF) to be equivalent to 2–5 per cent of global GDP with organised crime groups estimated to be grossing more than US$1.5trn a year. However, there is significant variation regarding guesstimates of the scale of the activities of organised crime and money laundering in general. For example, Walker applies a ‘crime‐economic model’ upon data collated from international databases and his model estimates a global money laundering total of $2.85trn per year, with these flows heavily concentrated in North America and Europe. These types of disparity in assessment are inevitable until a great deal more data is generated regarding money laundering and other sectors of alternative and/or illegal economies. Walker stresses that his results are very much interim, but they suggest some interesting patterns. For example: of totals of money laundered globally, the USA was the origin of more than 46 per cent and the destination of more than 18 per cent; and on a matrix of attractiveness of jurisdictions to money launderers Luxembourg ranked first with a score of 686, followed by the USA (634) and Switzerland (617), with the traditional homes of underground banking systems such as Pakistan (Hawala system) and China (Fei Chien) ranking in the lowest category (0–9). The methodological problems of measurement are especially acute regarding underground banking systems due to their intrinsically low levels of public visibility. Indeed, many of the dilemmas associated with underground banking are reproduced in other issues of conventional banking, financial regulation, law enforcement and economic governance. It is these dilemmas that are the core focus of this paper.

The purpose of the study is to examine the available literature to comprehend what the underground banking system is, for what purposes this method is used and how policymakers should proceed to address this issue.

The approach involved conducting this study and combining it with a critical analysis of the available literature as well as the available historical data. The sources the study has explored include government documents, public hearings, academic articles, case studies and articles available on the internet.

The study revealed prevention of illegal proceeds is critical, still regulating one entity, is a phenomenon of Boyle’s law, “squeezing the balloon”. If one end of the balloon is squeezed, making the volume smaller, the pressure inside increases, making the un-squeezed part of the balloon expand out. The real issue is not how criminals transfer their illegal earnings; it is the criminals themselves. Hence, the policy decision on this issue needs to be carefully considered.

Due to the complexity of the operating system of Undiyal, this study had a number of limitations, as do many others. Firstly, there are no records of the Undiyal agents or the volumes of transactions publicly available. However, comprehending the scope of the underground operation that exists in the country is quite difficult.

The study contributes to the academic researchers grasping what type of future research should be focused on in this area according to the study.

From the point of view of its practical application, the study seeks to resolve social issues that the middle-class population experiences on a daily basis and that have a huge and adverse impact on GDP.

To the best of the authors’ knowledge, this is an original contribution.

Introduces the two types of underground banking systems used in Indian and Chinese communities in many parts of the world: hundi or hawala, and chop shop or chitti banking. Explains the terms: hawala means money transfer, chops are seals that facilitate money transactions, and chitti means mark; both types lack the paper trail that characterises conventional banking. Discusses the reasons for the prevalence of these systems: Indian and Chinese settlement abroad, and the strong family ties involved. Relates how underground banking funds are generated in developing economies with exchange controls, and with financial and fiscal rules and regulations; and similarly in the free markets of the developed countries. Shows how underground bankers mop up funds for compensatory payments, the system’s linkages and its relationship to tax havens and money laundering centres. Moves on to how underground banking is being countered in both developed and underdeveloped countries, international cooperation, conjoined underground and conventional banking, funding terrorism through hawala and its linkages with drug trafficking and gold smuggling, and the volume of money transactions by underground bankers.

The purpose of this paper is to study underground banking between Greece and Albania and provide policy makers with specific policy recommendations to reduce hawala, reduce remittances commissions and improve access of banking services to both remittance senders in Greece and beneficiaries in Albania.

The authors measure loans to customers (non‐banks), total assets and net revenues from commissions, including remittances commissions, of a sample of 26 Greek commercial banks during 1996‐2004 and examine recent remittances commissions of the four largest Greek commercial banks and the Greek Postal Office.

Results indicate that Greek commercial banks charge less for remittances services than Western Union, Eurogiro and hawala banking, although remittances are not a core business for them (loans to customers – non‐banks – are their core business).

Practical solutions are: lowering remittances commissions to Greek Postal Office for low amount remittances; raising awareness of migrants on benefits of access to formal banking system; implementing bilateral initiatives between Greece and Albania; facilitating development of transfer mechanisms for remittances; promoting economic activities; increasing transparency and offering insurance for remittances; and make it compulsory for employers to pay legal and documented Albanian workers through migrant bank accounts. Also, Albania could support the growth of ATMs networks, to increase access of people to more areas even to rural areas, where remittance‐recipient households receive most of remittances. On the other hand, Albania, could find alternative sources to finance current account deficits, due to a possible future reduction of remittances inflows.

The paper presents an explanation about low access of Albanian migrants in Greece to remittances services offered by the banking system and suggests the implementation of specific policies to banks and alternative formal money remittance service providers.

Just as the August 1998 financial crisis overturned the predictions of a Russian boom, the quick post‐crisis recovery of the Russian economy came as a surprise too. It has almost become a commonplace that ‘nothing is as strong or as weak in Russia as it seems’ and the need to understand how the Russian economy really works is still of urgent priority.

The purpose of this paper is to make objective descriptions on various money‐laundering techniques and to put forward countermeasures in order to combat money laundering more effectively and efficiently.

This paper based on 20 simplified money‐laundering cases, describes various money‐laundering techniques, analyses the reasons why these methods prevail, and points out the future efforts to be made in the fight against money laundering.

As usual, the ways of money laundering include cash smuggling, making use of banks or insurance company, or making use of shell‐company or front‐company. Nowadays, criminals also turn to real estate, lottery, international trade, offshore company to launder money. Sometimes lawyers, accountants are exploited by money launderers. With the wide use of electronic money and internet, criminals prefer to launder money through non‐face to face transactions. The fight against money laundering is the fight between justice and evil. It is of great importance to pierce the secret veil of money laundering so that we can combat money laundering more effectively and efficiently.

This paper prevents a comprehensive description of, and comments on, various money‐laundering techniques and future efforts to be made in the fight against money laundering, which would be beneficial to policy makers, enforcement authorities, and judicial professionals.

Until very recently there was little real concern in governments and inter‐governmental organisations to address the problems and issues of corruption in the context of sustainable development and stability. This article aims to focus on the present situation with regard to asset recovery in the domestic and international arena.

The article takes the form of an analysis and discussion of the present situation.

The new United Nations Convention on Corruption represents a significant achievement in the on going fight against those who seek to corrupt societies. It does not and cannot provide a panacea. There are numerous compromises, fudges and lacuna. However, it does point in the right direction in regard to many issues and provide a vehicle for those pursuing the fight against corruption.

The article provides some pointers for the interdiction and recovery of the proceeds of corruption.

Underground banking docs not refer to cash dispensers in subterranean shopping centres. It refers to that secretive and mysterious global structure for facilitating the transfer of funds between countries, otherwise referred to as ‘Hawalla’ banking.

The acquisition of and control over wealth is the motivation for most serious crimes involving premeditation. This is all the more so when the criminal activity resembles an enterprise which inevitably requires capital to operate and lubricate its aspirations. Money, or rather wealth, in its disposable form, is therefore not only the goal of criminal enterprises but the life blood of the enterprise. Therefore until the profits of crime are taken away from subversive and criminal factions, there is little chance of effectively discouraging criminal and abusive conduct which produces great wealth or, through its profits, allows power and prestige to be acquired. As soon as the state devises methods for the tracing and seizure of such funds, there is an obvious and compelling incentive for the criminal to hide the source of his ill‐gotten gains — in other words to engage in money laundering.

The purpose of this paper is to examine the divers and facilitators of money laundering in Ethiopia. Specifically, it looks at the risk factors that existed in the country’s economic and political system, which provide an appealing environment for money laundering to grow.

This qualitative study relies on primary data generated from interviewees drawn from the National Bank of Ethiopia, Ethiopian Financial Intelligence Center, Ethiopian Customs Commission, selected financial institutions and certain non-financial businesses and professions and law enforcement agencies, as well as secondary data from government reports, media press, statutes and other online and offline sources.

This study finds that the risk factors for the growth of money laundering in Ethiopia are highly reliant on the country’s economic and political system. Accordingly, the nature of Ethiopia’s economy, which is cash-intensive, loosely regulated economic growth and the raise associated criminality, the development of underground banking activities, scarcity of foreign currency reserves and the existence of societal demand for illicit goods and services are all risk factors for the growth of money laundering. The raise of an elite cartel model type of systematic corruption, limited institutional capacity to prevent and suppress money laundering and the absence of a national identity card system are also identified as risk factors for the rife of money laundering in Ethiopia. Moreover, the geopolitical location of the country, its porous borders, limited cross-border cooperation and information sharing add further fuel to the vulnerability of the country to money laundering and associated predicate offense.

To the best of the author’s knowledge, this paper provides a first-of-its-kind analytical perspective on the risk factors for the raise of money laundering in Ethiopia.