What are the legal implications of the Hawala and the Kamaitee System within the UK?

This Thesis explores the Kamaitee system which exists within the Pakistani community in the UK. The Kamaitee system is an informal banking system which falls within a subsection of the Hawala system. The Hawala system has been researched and written about at length, particularly after the events on 9/11. In analysing UK legislation and literature for this thesis, alongside the analysis of legislation and literature originating from Pakistan this study has begun to explore the potential legal implications surrounding the Kamaitee system. As the Kamaitee system is linked to the Pakistani community this was a necessary inclusion. Furthermore, due to the lack of academic research surrounding the Kamaitee system empirical research was conducted in the form of semi-structured interviews with participants who run and benefit from the Kamaitee system within West Yorkshire.
This study is composed of five parts. The first is an evaluation of the use of cash, UK legislation and literature surrounding money laundering, terrorist financing, and tax evasion. It considers the implications of Hawala on these crimes and uses the evidence from the interviews to find common potential issues. The second part explores the requirement for customer due diligence, the presence of both control and trust within minority communities and how relationships are built in informal banking systems. The third part focuses on criminal financing, the potential different types that may be present in informal banking systems and to what extent is criminal
financing an element of the Kamaitee system. The fourth part explores conflicts, power dynamics and how these impact the system as well as explaining why this system is used by citizens in Pakistan and finds common reasons with individuals interviewed for this study. The final part analyses the empirical data collected for this study, identifying common themes.