THE MEANING OF ALL THIS TERMS “HAWAL”( in ARABIC),”ANGADIA”(in HINDI),” AVAL” (in French),”AVALLO”(in ITALIAN) is transfer or informal value transfer system.
Hawala has its origins in classical Islamic law and is mentioned in texts of Islamic jurisprudence as early as the 8th century.
How it works :
Transfer of money via network of hawala brokers. It is the transfer of money without actually moving it. In fact, a successful definition of the hawala system that is used is ‘money transfer without money movement’.
The unique feature of the system is that no promissory instruments are exchanged between the hawala brokers; the transaction takes place entirely on the honour system. As the system does not depend on the legal enforceability of claims, it can operate even in the absence of a legal and juridical environment. Trust and extensive use of connections, such as family relations and regional affiliations, are the components that distinguish it from other remittance systems.
Hawala is attractive to customers because it provides a fast and convenient transfer of funds, usually with a far lower commission than that charged by banks. Its advantages are most pronounced when the receiving country applies unprofitable exchange rate regulations (as has been the case for many typical receiving countries such as Pakistan or Egypt) or when the banking system in the receiving country is less complex (e.g. due to differences in legal environment in places such as Afghanistan, Yemen, Somalia). Moreover, in some parts of the world it is the only option for legitimate funds transfers, and has even been used by aid organizations in areas where it is the best-functioning institution.
Hawala is been called as Terrorist Financing
Hawala has been discouraged in some U.S.A and other countries, it is legal in all US and world jurisdictions. Government officials assert it can be used to facilitate money laundering, avoid taxation, and move wealth anonymously.
9/11 terrorist attact USA.. a bluck of fund transfer..American government suspected that some hawala brokers may have helped terrorist organizations to transfer money to fund their activities.. but reality the fund transfer is transfer through inter-bank wire transfer to a SunTrust Bank in Florida.
Bush administration (USA) froze the assets of Al-Barakat, a Somali remittance hawala company used primarily by a large amount of Somalian immigrants. Many of its agents in several countries were initially arrested, though later freed after no concrete evidence against them was found.
Latest News Of 3rd july 2013 in Mumbai Maharashtra(INDAI)
National Investigating Agency (NIA), which conducted the raid in collaboration with the Income Tax (I-T) department, was apparently misled by an informer to believe that the trucks were laden with counterfeit currency meant to fund terror activities. Based on the information, the NIA, meant to combat terror, intercepted the trucks near Mumbai Central station, but realised it was a mishit, I-T sources said.
A businessman clued up with the angadia trade told MiD DAY, “Hawala courier business is 70 years old. While majority of the transactions are legal, a handful of angadias are involved in hawala operations. Of the entire consignment that has been recovered in the raid, only a few items would be unaccounted.”
AAShirgurkar&Associates 