Alternative remittance systems

According to ACAMS International Glossary of Key Money Laundering Terms and Acronyms, alternative remittance systems are informal networks of remitters that implement the transfer of values between countries outside of the legitimate banking system. A link in an alternative remittance network can be an ordinary shop that has an arrangement with a corre­spondent business in another country. These systems are often characterized by having no physical movement of currency and a lack of formality with regard to verification and record-keeping. The money transfer takes place through coded information being passed through chitties (receipts), couriers, letters or fax, followed by a telephone confirmation. Almost any document which carries an identifiable number can be used by the receiver to pick up the values in the other country. Sometimes, a torn playing card is used for this purpose.

Alternative remittance systems are often associated with ethnic groups from the Middle East, Africa, China or Asia and are referred to by differ­ent names depending upon the country: hawala (an Urdi word meaning "reference"), hundi (a Hindi word meaning trust), chiti banking (referring to the way the system operates), chop shop banking (China) and poey kuan (Thailand). These systems are also called underground or parallel bank­ing.