Regulatory Frameworks for Hawala and Other Remittance Systems
March 24, 2005

Approaches to a Regulatory Framework for
Formal and Informal Remittance Systems: Experiences and Lessons

Prepared by the Monetary and Financial Systems Department
In collaboration with the Legal Department and the World Bank and consultation with other departments

February 17, 2005

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  Overview and Executive Summary
I.   Background, Ongoing Work, Terminology
  A.   Background
  B.   Ongoing Work in the Remittance Area
  C.   Terminology
II.   Risks of Misuse to Remittance Systems
  A.   Vulnerabilities of Remittance Systems
  B.   Addressing ML/FT Risks: The FATF Requirements for Remittance Systems
III.   Experience of Countries Adopting Regulatory Regimes for Remittance Systems
  A.   Countries with Registration Regimes
  B.   Countries with Licensing Regimes
  C.   Compliance with AML/CFT Requirements—Practices
  D.   Sanctions—Practices
IV.   Analysis of Regulations
  A.   Issues for Remitting Countries
  B.   Issues for Receiving Countries
V.   Lessons from the Practices of Selected Countries
  A.   Lessons for Regulatory Frameworks
  B.   Lessons on Practices for AML/CFT Requirements
  C.   Lessons on Sanctions
VI.   Issues for Discussion
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Text Tables
Table 1. Summary of Registration and Licensing Requirements
Text Boxes
Box 1. Loyalty Cards
Box 2. Somali Financial Services Association
I. Improving Development Impact
II. Lowering Remittance Costs
III. Task Force to Develop Guidance on Payment System Aspects of International Remittance Systems
IV. Improving Data Collection
V. FATF Recommendations
VI. Requirements in Sample Countries for Regulating Money Remittance Providers