NCJ Number
230508
Date Published
April 2010
Length
2 pages
Annotation
This paper provides two case studies to highlight the risks from using alternative remittance systems.
Abstract
This paper provides a brief overview of the characteristics of alternative remittance systems (ARS), the risks from using these systems, and current responses to these risks. An ARS refers to a variety of terms used to describe the practice of transferring value from one country to another, usually through informal channels rather than through established conventional means such as banks. ARS providers examined for this report are usually small and send remittances to only one country. There is concern among ARS users and government officials that these providers do not always abide by the laws of the countries in which they operate. Certain aspects of ARS that make them appealing for use by criminals and terrorists include: the lack of a single set of coherent documentation for each transaction which would identify the receiver of the remittance; no obligation by providers to identify their customers, especially since most instructions are made over the phone; the use of intermediaries and the potential for remittances to come from many sources thus hiding the identity of all the sources; and the possibility that some providers could be a front for criminal organizations. Two case studies dealing with ARS are discussed, along with the regulation of ARS providers and recommendations for future research. References