Barclays Account shut-down raises Somali fears

Many Somalis rely on money sent from
their relatives abroad
Barclays bank is closing about 100 UK
accounts held by cash transfer businesses,
over fears they are being used for money
laundering.
The businesses are vital for Somali
expatriates sending remittances back
home, where banking facilities have
collapsed.
Aid workers say the service is a "lifeline"
for 40% of the Somali population, who rely
on the transfers.

It is feared that the cash transfer business
could now go underground.
Several money transfer businesses -
including Dahabshiil, the largest such
business providing services to Somalia -
say Barclays has given them a temporary
reprieve of one month.
Dahabshiil says it is urgently trying to meet
the bank's criteria to keep its account open.
Abdirashid Duale, chief executive officer of
Dahabshiil, has said Barclays' decision
could see money transfers pushed
underground into the hands of
"unregulated and illegal providers".

Barclays is the last major UK bank that still
provides such money transfer services to
Somalia, which has an estimated 1.5 million
of its nationals living overseas.

The UK Serious Organised Crime Agency
has identified money service businesses
generally as a potential money laundering
risk.
'Humanitarian crisis'
All international banks have been
tightening rules in a bid to cut money-
laundering and funding of groups accused
of terrorism.

"Some money service businesses don't
have the proper checks in place to spot
criminal activity and could therefore
unwittingly be facilitating money-
laundering and terrorist financing,"
Barclays said in a statement last month.
The bank emphasised that it was "very
happy" to serve companies with strong
anti-financial crime controls.

Last month, more than 100 researchers
and aid workers signed a letter urging the
UK government to stop Barclays closing its
account with Dahabshiil.
They said the move would cause a crisis
for the families that rely on the transfers.
According to Dominic Thorncroft of the UK
Money Transmitters Association (UKMTA)
trade body, "closing these accounts will
lead to a humanitarian crisis in Somalia".

UKMTA represents over a third of money
transfer firms in the UK.
Oxfam says there is no need for a blanket
shut-down of these kinds of accounts.
Instead, it would like to see better
regulation and the money service
businesses investigated on a case-by-case
basis.

Research for the charity suggests that
Somali migrants in the UK may be sending
as much as £100 million a year back to
Somalia, about 12.5% of the total amount.
That would make it the second largest
proportion of remittances, after the US.

Oxfam's study also estimates that
remittances could account for about 60%
of a recipient's annual income.

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