US money-transfer clampdown dismays immigrants: African and other developing world immigrants have used the tried and tested hawala system to send money back to their families for decades. Now they are under the cosh as US authorities clamp down in a bid to dry up funds for terrorists.

Author:Vesely, Milan
Position:Dateline USA

With large immigrant communities settling in the Washington and New York areas in recent times, the informal money-transmitting business--or hawalas in Arabic--has flourished. Often the only way for immigrants to send money back home, these private money-transmitting businesses have long been a thorn in the side of US federal authorities. The pressure to deal with them increased markedly after the 9/11 attacks on the World Trade Center.


In April 2004, US Federal agents raided 17 Washington-based money businesses that allegedly had sent millions of dollars abroad without legal approval. Part of a nationwide crackdown aimed at curbing the ability of terrorists to move cash in and out of the US, the raids have been cloaked in secrecy. What is known is that $3.6m of cash was seized, even though no terrorist-related charges have been brought against the money-changers themselves. That no charges have been made led skeptics and immigrant-community activists to charge that the raids were designed to grab headlines rather then to stifle the flow of illicit money to terrorist organisations. "They targeted mom and pop businesses that have nothing to do with terrorism," one critic charged, adding that "these people simply lacked the resources to meet all of the stringent licensing requirements".

"We are alienating communities that we should be bringing together in our corner for coalitions against terrorism," Professor Nikos Passas, an expert on terrorism at Northeastern University, said. "It is counter-productive."


Targeting the Eritrean Cultural and Civic Center at Sixth and L Streets NW Washington, federal agents swept into the centre's second floor office and seized documents and computers as well as payment records and office literature. Situated in a rented building, the centre is alleged to have been sending hundreds of thousands of dollars overseas, most, if not all, to Eritrean immigrant families back home.


Justifying the US government's actions, Kevin Delli-Colli, assistant special agent in charge of the local Bureau of Immigration and Customs Enforcement, said: "When you have an underground banking system it tends to make us very vulnerable to terrorist activity."

Immigrants who use the club for social activities and to watch Eritrean TV programmes were outraged by the raid. "To include us within a terrorist group is unacceptable. Of course we are offended," Eritrean cab driver...

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