The Hawala Myth in the Financial War on Terror. Afghanistan LT Dan Hancock. Overview. Since 9/11 U.S. counter-terror efforts to disrupt al-Qaeda’s finances have been imprecise at best; at worst they have had profound negative effects Why is hawala such a great threat?
LT Dan Hancock
“The broad answer is, yes folks (hawaladars) agreed that they did ‘know’ their customers, and therefore did indeed know much of the time what the business they were facilitating included… that said, everyone I spoke with did admit that facilitating terror (and other illicit activity for that matter) was not a good thing, and that they did want to find solutions that they could shove out this business but do so in a way that still retained their access to the larger pool of funds and the market…. I do think there is a distinction drawn between facilitating narcotics and terrorism – absolutely – and we need to remember that financially facilitating some of the drug trade is interpreted different ways… especially if some count their livelihood that way.”
“In the wake of the events of September 11, 2001, and the subsequent international efforts to combat money laundering and the financing of terrorism, abstaining from regulation or supervision of the informal
financial system is no longer a tenable option.”-Samuel Maimbo, World Bank
“Several hawala dealers commented on the fact that while the DAB had several open forums for discussion on the issuance of new regulations, the forums provided only limited opportunity for the engagement of the sector on the establishment of those regulations since DAB had substantially determined the nature of the regulations themselves prior to the forums, and in any case, only a few of the Kabul based dealers attended. As a result, incentives for compliance are not built into the legal framework nor supported by credible enforcement. Therefore, there has been little to no cooperation with regard to the development and implementation of the present regulatory and supervisory framework or compliance.” – Amit Sharma
on the ground.
the hard way that they had to rely on the same hawala network utilized by terrorists in
order to move money in Afghanistan or to get anything done. A little historical
perspective can go a long way. The complete cultural ignorance by the U.S. government
to the importance of the hawala system in Afghan or Muslim society was completely
avoidable. There are numerous historical examples and colonial narratives that illustrate
the deep meaning of hawala to the Afghan way of life. This sort of improper framing of
the issue has plagued U.S. foreign policy in the region and certainly its approach to
and transposed to kinship, ethnic, and other social connections.”