Money transfer services could be used to finance terrorism
Rome, Nov. 19 – The risk of money transfer services being used to finance terrorist cells is real, Andrea Strippoli Lanternino of the Italian anti-money laundering association (AIRA) told AGI. There are two types of money transfers: legal, using services like Western Union and MoneyGram, and illegal.
Legal money transfers “are regulated by legislation and leave a paper trail from origin to destination, which can be tracked by authorities,” Strippoli Lanternino explained. “Proceeds of illegal activities can be transferred using money transfer agencies located throughout Italy or through unofficial channels, by physically transporting the cash,” said Ranieri Razzante, president of AIRA and director of the observatory examining money laundering and terrorist financing at Luiss University in Rome.
“In this context, there is reason to suspect that some economic entities (real estate companies, financial intermediation or travel agencies) in which Italians also play a role, could act as centres that collect proceeds from crime and distribute this money in small amounts that can be moved by single passengers staying below the cash limits.”
And then there are the illegal, unregulated systems, called Informal Value Transfer Systems (IVTS), like hawala. Strippoli Lanternino continued: “That money cannot be tracked as the transfers take place without the physical movement of money.
Through a system based on a fiduciary relationship and the use of intermediaries money can be transferred from one country to another without being monitored by authorities.” The U.S. Financial Crimes Enforcement Network (FinCEN) defines IVTS as “a system or a network of people that allows or facilitates the transfer of values nationally or internationally, outside the official and regulated financial system.” Strippoli Lanternino pointed out, “It is not possible to verify whether the money moved through these informal systems is used to finance terrorist organisations or cells, precisely because of the illegal nature of such methods.”