Informal Value Transfer Systems
Informal value transfer systems (IVTS), however, exist in a number of cultures, and bypass regular financial channels and their monitoring systems (see financial intelligence). These are known by regional and cultural names including:
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- hawala (Middle East, Afghanistan, Pakistan)
- hundi (India)
While details differ by culture and specific participants, the systems work in a comparable manner. To transfer value, party 1 gives money (or other valuta) to IVTS agent 1-A. This agent calls, faxes, or otherwise communicates the amount and recipient of the funds to be transferred, to IVTS agent 2-A, who will deliver the funds to party 2. All the systems work because they are valuable to the culture, and failure to carry out the agreement can invite savage retribution.
Reconciliation can work in a number of ways. There can be physical transfer of cash or valuables. There can be wire transfers in third and fourth countries, countries without strong reporting requirements, which the IVTS agents can verify.
Another means of transferring assets is through commercial shipment of conventional goods, but with an artificially low invoice price, so the receiver can sell them and recover disbursed funds through profit on sales.
Read more about this topic: Clandestine HUMINT, Support Services, Finance
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