Paper Summary:

This paper describes a research project to investigate and describe the reasons and methods of money laundering in the Kingdom of Saudi Arabia (KSA), especially the practice of hawala, and to evaluate the effectiveness of the Financial Intelligence Unit (FIU), the country's major agency dealing with money laundering. An extensive literature review organized around the four central research questions is presented along with a description of the methodology for the interviewing of persons working in businesses, law and regulatory sectors who are employed in the field of money laundering.

Table of Contents:
Aims and Context of the Project
Academic Contribution
Practical Contribution
Literature Review
Q1: How Does Money Laundering Play a Role In Terrorist Financing in the KSA?
Q2: To What Extent Do Organizations Engaged in Political Violence Use Money Laundering Techniques or Transfer Systems in the Context of KSA?
Q3: How Widespread and Effective is the Use of Money Laundering and Hawala to Avoid Detection of Terrorist Financing in the KSA?
Q4: Has SAFIU been Effective in its Mission to Combat the Financing of Terrorism and Money Laundering in KSA in Light of International Standards?
Approach and Methodology
Conduct of Interviews
Analysis of Data

From the Paper:

"Illegal immigrants in KSA, who may not have access to legitimate banking sources, have helped to increase the demand for Hawala services. Illegal immigrants are unable to open a bank account because they cannot reveal their identification documents due to fear of deportation. A substantial number of illegal workers use Hawala to send money from Saudi Arabia back to their families in their home countries. Hawala is attractive to people because it provides a fast, convenient and safe way to transfer funds at a lower commission than that charged by banks."

Sample of Sources Used:

• Duaij A, Hawala: The Main Facilitator for Middle Eastern Organised Crime Groups 2009
• El-Qorchi M, The Hawala System, Senior Economist, Monetary and Exchange Affairs Department, IMF http://www.gdrc.org/icm/hawala.htmlAccessed on 27/Jan/10
• Patrick M.Jost, Harjit Singh Sandhu, INTERPOL, Money Laundering - The hawala alternative remittance systems and its role in money laundering 2000
• Wilson J,Qorchi El, Informal Funds Transfer Systems: An Analysis of the Informal Hawala System http://books.google.com/books?id=s2h1CyesVnQC&pg=RA2-PA5-IA3&dq=Informal+funds+transfer+systems:+an+analysis+of+the+informal+Hawala+system+(2003)&lr=&hl=ar&cd=1#v=onepage&q=Informal%20funds%20transfer%20systems%3A%20an%20analysis%20of%20the%20informal%20Hawala%20system%20(2003)&f=falseAccessed on 25/Jan/10
• Interpol General Secretariat, Lyon, January 2000, The hawala alternative remittance system and its role in money launderinghttp://www.apgml.org/frameworks/docs/8/Hawala%20ARS%20&%20its%20role%20in%20ML%20-%20FinCEN%20and%20Interpol%20(Jost%20&%20Sandhu)%202000.pdfAccessed on 27/Dec/10

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