OK, I am sure everyone of us have seen this thing at least once or twice. Here is the problem…

This type of transfer is known as Hundi or Hawala (aka. underground banking and Informal value transfer system IVTS). Because IVTS provides security, anonymity, and versatility to the user, the systems can be also used for supplying resources for doing illegal activities. Following the September 11, 2001 attacks on the United States, IVTS have come under increased scrutiny and regulation in many countries as a result of pressure from the United States. Now this activity falls in the grey area, and in the eyes of the law it is considered suspicious action. Therefore subjected to criminal investigation, if found by authorities.

Here are some of the associated risks:

• You can be subjected to money laundering investigation by CRA or FINTRAC.
• In Pakistan, the situation is even worse, its a criminal offense regardless on the amount, according to Anti-Money Laundering (AML) Act, 2010. Even if you are using a proper channel, always keep the official receipt, otherwise your funds can be held by the bank, and you will be subjected to investigation.
• In Canada, you may be able to clear your name, after an investigation, but this will reduces your chances of obtaining Canadian citizenship. (Applicable to newcomers)

Alternative

On the other hand, remittance is made easy & cheap by services like Remitly and WorldRemit. Moreover, banks in Canada have also jumped on the opportunity and they also offer the same services at a very reasonable price. Comparing this to aforementioned risk, I thinks its clear what path to take.

Here is a short video on the subject: https://fintrac-canafe.canada.ca/intel/advisories-avis/bank-video-eng. You can read more about it in the references below.

References:

1. Underground Banking through Unregistered Money Services Businesses: https://fintrac-canafe.canada.ca/intel/advisories-avis/bank-eng
2. Situations that may prevent you from becoming a Canadian citizen: https://www.canada.ca/en/immigration-refugees-citizenship/services/canadian-citizenship/become-canadian-citizen/eligibility/situtations-prevent-citizenship.html
3. PK Anti-Money Laundering Act, 2010. http://anf.gov.pk/library/law/anti_money_laundering_act_2010.pdf
4. What is Hawala? https://en.wikipedia.org/wiki/Hawala