There is no paper trail. There is no oversight. There are no clear rules. But the cash flow is staggering: roughly $200 billion a year.
This amount, sent home by immigrants and migrant workers through back channels, dwarfs global foreign aid. Canada’s share — approximately $7.5 billion a year — is more than double the country’s official development assistance.
Although these hand-to-hand remittances do a tremendous amount of good in poor countries, they pose serious risks for both senders and governments.
Immigrants have no guarantee their earnings will actually reach their families. The money could be pocketed by greedy middlemen, stolen enroute or whittled down by bribes to corrupt local officials.
Financial authorities have no knowing whether this informal financial system is being used by drug dealers to launder dirty money or terrorist groups to finance international operations. It certainly has the potential to do both.