Hawala System

Al-Qaeda / JI were said self sufficient financially. Intelligence reported there was 8 source of income for their activities. Intelligence estimation shows JI have received almost 1.3 billion rupiah from Al-Qaeda since 1996 until 2000. The one of the most successful way to transfer the hard cash to the target group was Hawala system. It was an informal remittance system that does not require transferor’s identity verification or detecting and reporting suspicious transactions. The transfer of money is carried out through unregulated network with no physical or electronic movement of money. The settlement takes place between the hawaladar (intermediary commander) and the other hawaladar (intermediary receiver) from whom the money is received. Profit for this system is expected around 1% to 3% for each transactions. This business was successful based on the trust from two different parties. United Nations said minimum $200 billion in circulation and World Bank said billions exchanged.