The First International Conference on Hawala, hosted by the government of the United Arab Emirates under the leadership of the Central Bank of the U.A.E. in May 2002, was a groundbreaking event that produced the Abu Dhabi Declaration on Hawala. The IMF was very pleased that the government of the U.A.E., again with the leadership of the Central Bank, collaborated with the IMF to organize this second conference.
In recent years, as remittance flows and funds transfer systems have become increasingly important for international policymakers, the broad concepts of remittance phenomena have become well documented. This essay compares the key features of two remittance corridors, identifying two distinct stages for inducing a comprehensive shift from informal to formal channels. The main source of analytical information is work conducted by the World Bank in support of the Asia-Pacific Economic Cooperation (APEC) Remittance Initiative. Additional research could explore in more detail how the features of a given corridor should be addressed in implementing regulations and how operators in the formal sector can best reach remittance senders.
This paper discusses Colombia’s experience of implementing a regulatory framework for money transfers that is capable of attracting money remitters to cross the line to a formal system. It also describes the supervisory practices and procedures the country designed and has applied for the past 12 years to enforce those regulations.
Given the large turnover in the money remittance sector, money remittance offices are considered a significant part of the Dutch financial system. In addition, because it has emerged that money remittances can be misused for money laundering and terrorist financing, the Netherlands has found it necessary to regulate the money remittance providers.
The purpose of this paper is to comment on the Brazilian foreign exchange system and to show why informal money transfers are not allowed. The sections that follow briefly describe Brazil’s financial system and its foreign exchange system and discuss the most important aspects of their regulation. The section “Monitoring of the Foreign Exchange System” comments on the surveillance procedure, which aims to maintain the regular operation of the system. The last part of this paper describes the treatment of informal money transfers.
Hawala and other remittance systems have gained attention in recent years with the substantial growth of remittance flows from countries with large migrant labor forces and with increased focus on combating money laundering and the financing of terrorism. The IMF and the World Bank have been researching these systems since 2002 to better understand the interplay of historical, cultural, and economic factors that promote such systems. This book is a survey of regulatory practices and an overview of experiences in different countries, and includes articles on regulatory frameworks in remitting and receiving countries and on the problems that can arise when regulating remittance systems.