A.L.E.R.T.
(America Law Education Rights & Taxation)

09-24-2001
Hawala Underground Banking

From the Desktop of Gordon Phillips --

Today we'll take a brief look at hawala underground banking, the nemesis of cyber-flatfoots everywhere.

Writing for http://www.newsday.com in a September 21, 2001 article titled 'U.S. Probes bin Laden's Finances', Associated Press writer Sharon Theimer states (excerpted): 

'U.S. officials believe Osama bin Laden's terrorist network is financed largely through charities and a variety of businesses ... [Sen. John] Kerry said U.S. efforts to track bin Laden's finances may be complicated by his network's use of the 'Hawala' system, an underground money system that in part lets people in different countries swap cash, eliminating the need for cross-border transfers and avoiding exchange laws.'

Complicated is a mild understatement. Try impossible. Ah, yes, Hawala -- the age old eastern practice that many lawfully educated Americans will need to adopt once an unconstitutional National Sales Tax (NST) has been enacted, blessed by the courts, and foisted upon us. 

The NST will be, de facto, a direct tax on property without apportionment, a clear and flagrant violation of the intent of Jimmy Madison and his righteously rebellious cohorts. Watch for an exposition on the unconstitutionality of the NST here shortly.

In brief, as I write this today, there is STILL no internal taxation on the sales of goods, services, and private property within the Union States. Never has been, not since the day Washington took office. Find a code section authorizing such and win a F$10,000 cash reward from INFORM AMERICA!

But there will be soon. It's coming to the WalMart near you. Just give it a few years. The NST will be a reality in your world shortly.

Which is why lawful Americans need to start circling their economic wagons RIGHT NOW and developing private barter and trade networks, both local and nationwide -- the so-called "underground economy" the Socialists abhor. 

Did you ever stop to think that the "underground economy" is the REAL economy? Where consenting adults agree on the value of goods and services, absent any trace of government meddling, 'price fixing' and regulation? Warning: these are dangerous thoughts!

Of course, how could 'underground banking' possibly be illegal in a country with Article I, Section 10 which states that 'No State shall pass any Law impairing the Obligation of Contracts'? This is some of the strongest, clearest language in the entire Constitution. We have the right to contract privately with each other without interference from, or 'partnership' with, government. Period.

Simple barter involves a direct exchange of money, services or some commodity between two parties. The Hawala system interposes a third party (my principle of 'Triangulation' at work) to receive, hold and factor transfers of value as a catalyst to the deal, and in whatever commodity is necessary to make it work. It's a beautiful thing.

The FBI, FinCEN, Interpol and all the King's Horses combined can investigate the hawala system until the dying sun balloons into a red gas giant and they'll never figure it out.

Writing in the February-March 1996 issue of the 'SAPRA India Monthly Bulletin' (http://www.subcontinent.com), California based specialist on Asian affairs and consultant on International Money Laundering issues, Larry B. Lambert, writes the following (excerpted) in an article titled 'Underground Banking and National Security':

'Money laundering networks have and continue to provide avenues to siphon money between individuals, groups, and nations across national borders and across the world for legitimate and illegitimate purposes. Less is known of underground banking in law enforcement circles and government regulatory agencies than any other form of money laundering or cash movement ... due to lack of understanding of the cultures in which the systems operate ... underground banking has historically proven itself to be one of the safest methods for money launderers to transfer large sums of money without a trace ... How easily may vast sums of money be moved from point to point without a trace or trail? ... What is underground banking? Where did it originate? What implications does it have to governments seeking to track illicit funds, halt narcotics money laundering and to control financial support to subversive and international terrorist organizations? ... Hawala is an Arabic word, which is used in non-Arabic Muslim countries with the spelling hawallah, meaning the transfer of money or information between two persons using a third person ... Whether the underground banking is done by Indians, Pakistanis or some other nation, its roots are inevitably found in the culture which originated the practice out of necessity. As an example of how underground banking originated, let's examine its genesis in China ... Historically, in China, if you had a quantity of raw opium and I wished to purchase the opium, I would give you a quantity of silver. The silver would become a medium of exchange with which I obtained a commodity. If there was an unsatisfied debt and I had the ability to pay in raw opium, that opium would be a means of payment and a form of money. I accepted the opium from you at the rate of one kilo for each one hundred taels of silver you owed me. I stockpiled silver in anticipation of future purchases, and you did the same with your opium ... Suppose I wish to purchase 500 kilos of opium from you. You live in Burma, I live in China. I do not want to transport 50,000 taels of silver, so I tell my cousin in Burma to pay you and I promise to settle with him later. You deliver 250 kilos, but you receive 50,000 taels of silver. I now have a 50,000 tael liability on my cousin's books, a 25,000 tael asset on your books and a commodity worth 25,000 taels on my books. I sell my opium for double its unit cost and have 50,000 taels of silver in my possession. My cousin tells me to pay a 50,000 tael debt he owes in China and thus settle my debt with him in Burma. I have caused the transportation of 250 kilos of opium from Burma to China without moving my silver and have 25,000 taels in Burma which the Chinese authorities will never see...'

Gordon closes: Isn't it wonderful to observe freedom and human ingenuity in action, even in an impending global police state? Fellow Americans, take a Clue Card -- and get busy.