Financial crime risk related to the use of "hawalas" can stem from: (Select Two.)

The correct answer is A. difficulty in tracking the originator, recipient, and source of transactions. D. informal networks used for cross-border transactions outside of the formal banking system. A: "Hawala and similar informal value transfer systems are difficult to monitor, making it challenging to identify the originator, recipient, and source of funds." D: "Hawala operates through informal networks for cross-border transfers, often outside the formal banking system…

Risks and Methods of Money Laundering and Terrorist Financing

Question

Options

Adifficulty in tracking the originator, recipient, and source of transactions.
Bremote verification of identity by third-party program managers.
Cheavy usage by senior political figures.
Dinformal networks used for cross-border transactions outside of the formal banking system.
Eheightened risks of returned transactions.

How the community answered

(58 responses)

A
76% (44)
B
9% (5)
C
3% (2)
E
12% (7)

Explanation

A: "Hawala and similar informal value transfer systems are difficult to monitor, making it challenging to identify the originator, recipient, and source of funds." D: "Hawala operates through informal networks for cross-border transfers, often outside the formal banking system, increasing AML/CFT risk."(CAMS 6th Edition, Alternative Remittance Systems; FATF, Guidance on Money Transfer Services)

Topics

#hawala#informal value transfer#transaction tracking#cross-border payments

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