Olive Branch and the Hammer A Strategic Analysis of Hawala in the Financial War on Terrorism
Hancock, Daniel A.
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"Since September 11, 2001, U.S. counter-terror efforts to disrupt al Qa'ida's finances have been imprecise at best; at worst, they have had profound negative effects. The question of why hawala poses such a great threat and why there is a need for strict regulation or elimination of hawala has been the subject of great deliberation among policy makers and financial scholars since al Qa'ida's attack on New York and Washington, D.C. Regardless, strategic banter became policy with the publishing of Executive Order (EO) 13224 which greatly expanded the U.S.'s ability to freeze, block and disrupt the transfer and storage of terrorist funds.2 In the aftermath of 9/11, this executive order set the tone and direction for U.S. strategy to disrupt and infiltrate al Qa'ida's financial network. EO 13224 created the framework for further debate that continues today. The debate is driven by the underlying assumption of policy makers that hawala was a fundamental piece of al Qa'ida's financial repertoire, allowing al Qa'ida to finance its global operations, particularly the 9/11 attack on America. The roots of this false assumption are in myth and post 9/11 histrionics. A prevailing school of thought argues that regulation of hawala needs to be tempered with patience, regional collaboration, socio-economic and cultural sensitivity, and broader formal financial reform. Efforts to date by the U.S. government and international community have been too aggressive and have not achieved their stated objectives. Hastily made recommendations and regulation will not benefit the U.S. in its long-term efforts to defeat al Qa'ida. This school of thought encompasses Maimbo, Thompson, Passas, and Sharma -- all referenced throughout this paper."
This article was published in Culture and Conflict Review (Summer 2008), v.2 no.3
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