Question

why is hawala an effective means of transferring terrorist funds? it uses the barter system to avoid financial scrutiny. it is faster than electronic transfers. it produces virtually no paper trail. it allows interest to accrue on the amounts transferred.

Explanation:

Hawala is an informal value - transfer system. Its lack of a significant paper trail makes it hard to trace, which can be exploited for illegal activities like terrorist financing. It doesn't use the barter system, isn't generally faster than electronic transfers in a legal context, and doesn't have a key advantage of allowing interest to accrue for illegal purposes.

Answer:

It produces virtually no paper trail.