Regulation of payment services - Simpler rules for hawala-systems and other money remittance systems

The Ministry of Finance has today put forward a proposal for regulation of payment services, including proposal for simpler rules for “hawala” business and other money remittance companies. – This should contribute to that simple money remittance businesses can operate in legal forms, says Finance Minister Sigbjørn Johnsen.

It is proposed to regulate payment services in Norway in accordance with EEA rules.  The proposal contains, in addition to the regulation of payment institutions, simpler rules and less extensive requirements for limited or informal money remittance business such as “hawala”-systems.

- Today, such informal value transfer businesses mainly operate outside governmental control. By lowering the requirements for registration, license and capital requirements, such businesses will get a realistic opportunity to operate legally, says Finance Minister Sigbjørn Johnsen. “Hawala” gives people living in Norway, the ability to send money home to their families who live in parts of the world who do not have a functioning banking system. This is a very important contribution to the local economy in many poor countries. From that perspective, it has long been a political desire to facilitate regulated and legal alternatives for such money transfers. I am pleased we now have this in place, says Johnsen.

- The cost of money transfers to foreign countries can often be high, and the market for this kind of service is not very transparent. This measure will contribute to that a larger share of such services takes place in regulated forms, and will hopefully contribute to transparency and greater competition, which serves consumers, says Minister of Children, Equality and Social Inclusion Audun Lysbakken.

To ensure that such enterprises do not contribute to money laundering or terrorist financing, the Ministry proposes that businesses which are operating under the simpler rules shall be subject to accounting and auditing rules, money laundering rules and full supervision from the Financial Supervisory Authority. Companies with limited permit can only offer money transfers up to a maximum of NOK 5 million per month.