Hawala

The words aval and avallo bear a similarity to hawala, and the context of intensive trade between Italian cities and the Muslim world suggests a possible link.

[7] The transfer of debt was "not permissible under Roman law but became widely practiced in medieval Europe, especially in commercial transactions", potentially borrowing from hawala.

[9] Following the September 11 attacks in 2001, international organizations responsible for counterterrorism and enforcing laws against money laundering have directed their efforts on identifying problems within the hawala, as well as other remittance systems.

According to the IMF, countries with limited financial services experience macroeconomic consequences because residents rely heavily on informal fund transfer systems.

Informal value transfer systems share common characteristics, including anonymity and lack of regulation or official scrutiny.

Hawaladar networks are often based on membership in the same family, village, clan or ethnic group, and cheating is punished by effective excommunication and the loss of honour, which lead to severe economic hardship.

Settlements of debts between hawala brokers can take a variety of forms (such as goods, services, properties, transfers of employees, etc.

"[13] According to the CIA, with the dissolution of Somalia's formal banking system, many informal money transfer operators arose to fill the void.

It estimates that such hawaladars, xawilaad or xawala brokers[2][14] are now responsible for the transfer of up to $1.6 billion per year in remittances to the country,[15] most coming from working Somalis outside Somalia.