WASHINGTON — Proposals to tax money transfers from the U.S. to citizens in other countries won’t stop the terrorist funding sent through informal channels like hawalas, experts warned a House terrorism subcommittee on Tuesday.

Rep. Mike Rogers, R-Ala., proposed legislation on May 30 that would tax remittances primarily to Latin American nations to prevent undocumented immigrants from sending money to those countries; revenues would help build a border wall. But the House Subcommittee on Terrorism and Illicit Financing now is considering the idea of imposing a similar 2 percent fee on money transfers to any country to clamp down on terrorism.

However, experts at the hearing stressed that taxation of legitimate channels of transferring money would drive more people to use trust-based money transfers like hawalahs to send money to other countries.

“As the technology has advanced, so too have terrorists and criminals,” said Duncan DeVille, the global head of financial crimes compliance at Western Union. “We have to stop the flow of funds to the bad guys.”

John Cassara, representing the Center of Sanctions and Illicit Finance at the Foundation for the Defense of Democracies, said “ hawaladars,” the borkers who conduct the transactions, often are cooperating with ISIS.

“Hawalah is present in ISIS-controlled territories in Iraq and Syria,” he said.

But several members of the subcommittee said remittances—both formal and informal ones like those through hawalahs — generally keep families connected overseas, helping foreigners send money to relatives in their home countries.

“These transfers can help stabilize an individual’s household,” said Rep. Tom Emmer, R-Minn.

“In 2015, worldwide remittance flows are estimated to have exceeded $601 billion,” according to the World Bank’s Migration and Remittances Factbook 2016. “Of that amount, developing countries are estimated to receive about $441 billion, nearly three times the amount of official development assistance.”

Matthew Oppenheimer, CEO of Remitly, Inc. an independent U.S.-based digital remittance company, said that his customers send money for basic needs of their family members, “things we take for granted here.”

He specifically cautioned the congressmen against taxing remittances. “When remittances are sent from modern and legitimate channels, they strengthen national security,” he said. “Taxing means money will flow to underground channels.”

The top 10 remittance recipient countries in 2015 were India, China, the Philippines, Mexico, France, Nigeria, Egypt, Pakistan, Germany and Bangladesh, according to the World Bank. None of those are countries listed in President Donald Trump’s executive order baring citizens of certain countries from entering the U.S.

“Taxing would be a shame for both customers, because it would effectively double the cost of hard-earned money,” said Oppenheimer. “And it would be bad for our national security, because higher cost would drive more remittances to be send underground where they wouldn’t be able to be tracked or traced.”

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