|State lacks control over money sent abroad|
| [30.08.2007, 10:59pm, Thu. GMT]|
|Norwegian authorities don't have adequate control over the money that immigrants send back home, according to a report for the foreign ministry. No one knows just how much money is sent from Norway to other countries, but it's estimated to amount to tens of millions of kroner a year. The peace research institute PRIO issued a critical report on Friday, financed by the foreign ministry and its aid agency Norad, that criticized authorities for not allowing the so-called hawala system of money transfers available in other countries.That system operates outside conventional financial institutions and helps its customers transfer funds quickly and inexpensively. In Somalia and parts of Iraq, it's effectively the only alternative for money transfers.|
Norway banned it, however, fearing it would be used for money laundering, tax evasion and financing for terrorism. The PRIO report says that instead, it could have helped track suspicious transactions and regulate overseas funds transfers.
The report also shows that the conventional banking system can be slow, expensive and irrelevant in countries with underdeveloped banking services.
Well-regarded services like Western Union and FOREX/Money Gram can handle foreign funds transfers quickly, but they're expensive for users.
State officials noted that many legitimate foreign money transfers are of critical importance to immigrants' families in developing countries.