October 23, 2006

Oct. 23, 2006: Dubai-based ring & Hawala Banks

A Mideast Money-Laundering Bust -- In a sting dubbed "Operation Khyber Pass," Italian officials have cracked a Dubai-based ring that exploits the hawala system of funds transfer, Maureen Kline, Oct. 19, 06

www.businessweek.com/globalbiz/content/oct2006/gb20061019_484344.htm?chan=globalbiz_europe_more+of+today%27s+top+stories

Kline is a correspondent for BusinessWeek in Milan.

This is an excellent source of information.

Italian authorities, with the help of the U.S. Drug Enforcement Administration and Britain's Serious Organized Crime Agency, have unmasked an international money-laundering ring based in Dubai that uses the hawala trust-based system of money remittance.

[....] The hawala system, which originated in India, typically works this way: a Pakistani taxi driver in New York who wants to send cash to his family in Pakistan turns the cash over to an agency. The agency is typically a company with some other activity such as an import-export business. For a fee, the agency telephones its branch in Pakistan and instructs the branch to deliver the equivalent sum very quickly to the driver's family. Later, the Pakistani branch of the agency and the New York branch settle their intercompany debt with a wire transfer or an exaggerated bill for imported shirts.

... Pakistanis living in Carpi, a town near Modena in northern Italy. ... Indian named Kumar Jain Naresh, known as "Patel," who lives in Dubai ... "informal bank,"... drug barons in places like Turkey.

Hair-Care Front

[....] Dubai as a major hub for hawala transactions ... expatriate workers from India and Pakistan ... large gold market .... lax on illicit financial transactions ... imposed reporting requirements.

[....] $4 million per day ... drug cartels in Turkey, South America, and Asia, ... commission of 7% to 11% ... illegal weapons sales. ... treasurer of a cultural association ... Al Qaeda ...

[....] the far larger phenomenon of global illicit trade, including drug and prostitution trafficking.

"Illicit trade has become economically enormous, and is capable of undermining governments," Naim says. While globalization and technology have improved law-enforcement capabilities, he maintains that global criminal activity has benefited more and is transforming the international economic system—subverting rules, creating new economic actors, and reconfiguring the map of international political and economic power. "This is the reason to be concerned."




Are we too complacent?

Emergency official concerned with N.L. communication system after outage, canadaeast.com , Oct. 23, 06

www.canadaeast.com/cp/national/article2.php?articleID=57567

ST. JOHN'S, N.L. (CP) - Bell Aliant needs to prove to Newfoundlanders that its system can be trusted after thousands were left without telephone and 911 emergency services, says the head of the province's Emergency Measures Organization.

A minor fire at a Bell Aliant switching station late Friday night knocked out phone service for 100,000 customers in St. John's for about five hours, and left the entire island without Internet access. [....]


What happened? Aliant was supposed to be such a successful company ... at least its stock value used to be considered solid ... There is a problem with our own complacency about the security of our lives in the most ordinary ways...... electricity, telephone, emergency services, and more. Another aspect: there is no other service that could have kicked in in the East. Telcos have had a monopoly with government(s) for emergency services, I believe. Not even the wireless connections would work. Cable? Check further. Is there a better way?

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