Explain the hawala system, its origins, and what are the advantages that would make this system appealing to terrorists?
What will be an ideal response?
• A system of exchanging money based on trust relationships between money dealers.
• A chit, or promissory note, is exchanged between two hawaladars, and it is as valuable as cash or other traded commodities because the trust between the two parties guarantees its value.
• The system originated several hundred years ago in China under the name of Feng Chin, or "flying money.".
• Today it is primarily based in Pakistan and India, but there are hawala dealers around the world.
• It is a legitimate means of transferring money without using money or moving funds across international borders, although it may violate currency transfer regulations in some countries.
• Money moves with no record and crosses international borders with ease.
• It is based on trust, and long-term trusting relationships are in place.
• Money can easily be bartered for contraband.
• No tax records exist.
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