Somali Money Biz: 'The Money Will Go Underground'
Wednesday, July 03, 2013
The chief executive of Somalia's largest money transfer company warned
Tuesday that funds wired into the country could "go underground" if
Somalis aren't able to send money to family members through banks.
Abdirashid Duale, the chief executive of Dahabshiil is asking Barclays
bank to reconsider a decision announced last month to stop facilitating
money transfers to some companies in Somalia. Banks worried about
anti-terror regulations have grown wary of facilitating transfers into
Somalia, where the al-Qaida-linked militant group al-Shabab still
controls a wide region.
Somalia's diaspora community sends $1.2 billion into Somalia annually,
according to a study released this month by the U.N.'s food and
agricultural agency. That money is desperately needed in one of the
world's poorest countries.
"What's the alternative? The alternative is that people will go
underground, and then the regulators won't see who is sending money,"
Duale told The Associated Press by telephone. "Money will go on flights
and be transported in pockets."
Dahabshiil is one of Somalia's rare business successes. Started in 1970
by Duale's father, the company says it employs more than 5,000 people in
150 countries. The company helps transfer money for such humanitarian
groups as the U.N., Oxfam and Save the Children.
Duale says Dahabshiil is in compliance with all international banking
regulations. He shared a portion of a letter from Barclays that said the
decision to sever ties "is not a negative reflection of your Anti-Money
Laundering standards, nor a belief that your business has unwittingly
been a conduit for financial crime," but rather is because of the risks
"of the sector in which you operate."
That risk, Duale argues, is in inherent in all money transfers. He noted
that the 9/11 commission that investigated the 2001 attacks in the
United States found that the attackers used Western banking institutions
to transfer money.
"We have our compliance system to follow. We ask people for ID. There is
a database we can check if they are a member of al-Shabab or not," he
said. "The risks are always there. The risk is not unique for a specific
Barclays said in a statement last week that as a global bank it must
comply with rules and regulations in all the jurisdictions in which it
"It is recognised that some money service businesses don't have the
proper checks in place to spot criminal activity and could unwittingly
be facilitating money laundering and terrorist financing," it said.
"Abuse of their services can have significant negative consequences for
society and for us as their bank."
Barclays said it is happy to maintain a relationship with businesses
that have anti-financial crime controls. Western Union operates in
Somalia but does not have a presence in many places, including the
Aid groups that work in Somalia are worried about the possible impact of
Barclays' decision. A coalition of aid groups said that one study of
financial transactions in Somalia found that 73 percent of remittance
recipients said that they use the money they receive from relatives — an
average of $2,040 per year — to pay for basic food, education, and