Possible Problems with Alternative Remittance Systems: Australian Institute of Criminology

The events of 11 September 2001 have heightened interest in ensuring that all sectors of the financial system are not misused either by criminal or terrorist groups. In addition to conventional banks, money and value can be transferred by alternative remittance providers who have, until recently, not been closely regulated. Regulators are concerned that the informal nature of these businesses may lead to their use by terrorist groups and other criminals. This brief considers the characteristics of alternative remittance businesses, the risks they pose and some of the current responses to these risks.

This report is one of three in a suite on this issue by the AIC:

• Money laundering and terrorism financing risks posed by alternative remittance in Australia
• Alternative remittance systems in Australia: Perceptions of users and providers
• Risks of money laundering and the financing of terrorism arising from alternative remittance systems