Behind the Informal Funds Transfer, Hawala System

8/7/2019 Behind the Informal Funds Transfer, Hawala System.

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Behind The Informal Funds Transfer (Hawala) System.

Tehseen Ahmed :

Approximately 500 billion rupees transfer annually through hawala system in Pakistan. Government official,

ministers, beurocrates seldom criticize on this system and reveals the sheering efforts to restrain this illegal

system as Mr. Rehman Malik stated at KCCI Meeting.

Hawala System is simultaneously performing a vital role to boost the economy in many countries through

which foreign remittances surge but some of the countries prohibited Hawala System due to the negative

impact on economy and on the political situations.

On the contrary, in Pakistan, Hawala is the basic tool by which regulators of the country can ruin the financial

as well as the political turmoil. Increasing trend of political and financial turmoil is the consequence of boosting Hawala System.

All the bribes, speed money, stolen money, black money collect by the government officials, politicians and businessmen transfers through Hawala System to the safe place. All the funds of political parties, terrorists

and diplomats receive through the Hawala System. To save the taxes and duties, the differ amount of theunder invoiced import/export goods also transfer through the Hawala System. The system has some positive

and negative impacts on our country showing below :

Benefits On Economy :

Mostly the companies and individuals provide Hawala Faiclity are linked each other and instruct other party

to pay the specific amount of money to the specific person and send the commodity against the amountcredited by Hawala agent, in result of, international trade increases.

Under Invoicing on exports of goods encourage to exporters for trading, ultimately, industries, manufacturer

and labours are motivated to earn more.

Usually, Pakistani living out of the country sends money to their families in Pakistan in foreign currency

which is beneficial for the Economy of Pakistan.

Benefits For Inhabitants :



Service charges pay against the foreign remittances is approximately 60 times lower in Hawala System than

the formal remittance system.

It is more easier to transfer funds than formal remittance system where sender have to disclose his complete

identity, purpose of remittance as well as the have to define receiver.

Sender / Receiver enjoy the taxes to save and the transfers and balances are not showing in his bank

statements.

Harms To The Society :

It is clear that all the terrorists either religious or political are supported through abroad. Hence, all the funds

for terrorism remit through the Hawala System which consequently affect country and it’s residents.

Government and the companies deprive of taxes and duties which collect at the time and after the remittances,

consequently development of country sacrifices.

Custom duties and taxes steals through under invoicing on imports of goods and again non development of

country.

Harm For The Economy :

Economy of the country is deprived of charges and taxes against the remittances resulting reduction of

government income.

Usually importers and exporters under invoice the goods and send/receive rest of the money through Hawala

System. As a result, custom duties and taxes deprive the government.

Government officials inspect the bank accounts on higher transactions and balances, but using Hawala

System, they are failed to check.

Harm For The Inhabitants :

Usually Hawala System provides transactions on cash bases, increasing trend of snatching in Pakistan is quite

risky.

Terrorists receive funds through Hawala is use for the political turmoil in the country and inhabitants loose

their lives and wealth.

Money earned through corrupt Government Officials and the Politicians send by using Hawala System Only

to the swiss accounts, while inhabitants are the heirs of the money.

Reason for Non Taking Action against the System :



All the corrupt politicians and government officials move their money to safe place in different countries and

the Hawala System is the only way to conduct it. That is why, every sovereign is just of the view that it is

illegal activity and we are trying to restrain it but all in vain.

Unseen Reality :

Since last two years, newspapers/media is giving hike to foreign remittances which had positive impact on

foreign reserves, ignoring the facts that the agencies are involved in creating unrest/terrorism in the country

behind the seen. This despicable act should come to an end to formulate a policy and encouraging use of legalchannels being practiced and followed in all democratic countries were terrorism and malpractices are

abhorred.

Documents

Behind the Informal Funds Transfer, Hawala System