EFTA02023994.pdf

11 From: David Smith [mailtoil l Sen September 06, 201 : PM To: Subject: Do you know about hawala/ hundi? Dear If you don't, I just thought of a nifty use of "free global tech" that would play to interest in disruptive tech being used for pro-poor activities, and might tie very much to Urban's goals (under the Integrated department) across multiple dimensions. I could explain it in five minutes on the phone, and then if of interest could spend the 2 hours needed to write it up. David 6 Sep I2 Here's the quickie intro: littp: en.wikipedia.ory. xviki I lawala I have a feeling that if one could use a formal an audited password system, one could eliminate the fraud risk without losing the system's efficiencies. EFTA_R1_00530756 EFTA02023994 The figure shows how Hawala works: (1) A customer (A, left-hand side) approaches a hawala broker (X) in one city and gives a sum of money (red arrow) that is to be transferred to a recipient (B, right-hand side) in another, usually foreign, city. Along with the money, he usually specifies something like a password that will lead to the money being paid out (blue arrows). (2b) The hawala broker X calls another hawala broker M in the recipient's city, and informs M about the agreed password, or gives other disposition instructions of the funds. Then, the intended recipient (B), who also has been informed by A about the password (2a), now approaches M and tells him the agreed password (3a). If the password is correct, then M releases the transferred sum to B (3b), usually minus a small commission. X now basically owes M the money that M had paid out to B; thus M has to trust X's promise to settle the debt at a later date. After the September 11terrorist attacks, the American government suspected that some hawala brokers may have helped terrorist organizations to transfer money to fund their activities. The 9/11 Commission Report has since confirmed that the bulk of the funds used to finance the assault were not sent through the hawala system, but rather by an official inter- bank wire transfer to a SunTrust Bank in Florida, where two of the conspirators had opened a personal account. However as a result of intense pressure from the U.S. authorities, widespread efforts are currently being made to introduce systematic anti-money laundering initiatives on a global scale, to betterfferthe activities of the financiers of terrorism and those engaged in laundering the profits of drug smuggling. EFTA_R1_00530757 EFTA02023995 David Smith CEO, Affordable Housing Institute E: Chairman, Recap Real Estate Advisors E: T: C: Skype: AFFORDABLE HOUSING INSTITUTE www liordablchou sinninst it titc.org RECAP REAL ESTATE ADVISORS 38 Chauncy Street, Suite 600 I Boston, MA 02111 DISCLAIMER: E-mails and any files transmitted with them contain confidential and proprietary information and are solely for the use of the intended recipient. If you are not the intended recipient. please return the e-mail to the sender and delete it from your computer. Email transmission cannot be guaranteed to be secure or error-free The contents of e-mails and any files transmitted EFTA_R1_00530758 EFTA02023996 with them may have been changed or altered without the consent of the author. Any action taken or omitted to be taken in reliance on the contents of any email or its attachments is at your own risk and to the fullest extent permitted by law Recap Advisors. LLC and &litotes accepts no responsibility or liability to you. EFTA_R1_00530759 EFTA02023997