Following 9/11 and the invasion of Afghanistan, concerns about the use of hawala in terror finance schemes led Coalition forces and the new Afghan government to refrain from paying Afghan troop wages through hawala, although no other formal banking or payroll system was available at the time. Dr. Edwina Thompson argues that the preoccupation with hawala also distracted Coalition partners from confronting the true source of terror finance: Gulf donors.
Here’s Thompson’s recent TEDxClapham talk on the subject. Pay particular attention to minutes 11-14. But watch the whole video—it includes Thompson’s reflection on her own near abduction by militants while doing research in Jalalabad:
The point is well made. As Money Jihad has often said, hawala is not a source of financing terrorism, it is a method. We can regulate or eliminate methods, but determined sources of financing will find other ways of transferring value unless we stop those donors where they live.