Thursday, July 11, 2013
British bank Barclays had set a Wednesday
deadline for suspending business with wire transfer services operating
in Somalia, threatening a major source of money for citizens in the
country. The bank gave extensions to many of the companies, but Somali
residents worry about what they will do if and when their financial
lifelines are cut.
Money transfer in Somalia is big business. The United Nations
estimates the country receives $1.2 billion each year through
remittances sent from overseas, which is helping the country rebuild
from decades of civil war.
But last month, Barclays said it would terminate the accounts of wire
transfer companies operating in Somalia, out of concern that some of
the money could be diverted to fund terrorism.
July 10 was initially set as the deadline for the cutoff to take
effect, but Barclays granted extensions, giving companies time to find
A representative of one of the biggest firms, Dahabshiil in Mogadishu, said business carried on as usual Wednesday.
But citizens, like Abdulahi Ali, a father of seven with family in Britain, remain concerned about an impending shutdown.
"The remittances we get through Dahabshiil are helpful for us," he
said, "especially during Ramadan. We are sad to hear that it will be
affected by the closure."
Many of the money transfers coming to Somalia go through the
alternative hawala brokerage system, which adheres to Islamic banking
codes, but does not always maintain extensive records of transactions
like some of the bigger wire services.
In announcing its decision last month, Barclays said some money
service businesses do not have "proper checks in place" and that they
could "therefore unwittingly be facilitating money laundering and
Banks in the United States have also stopped money transfers to
Somalia, out of concern they would be in violation of U.S. law against
financing terrorism, the main target in Somalia being the
al-Qaida-linked group al-Shabab.
But Isse Gurey, another Mogadishu resident with relatives in Britain,
said the decision to restrict transfers will hurt families instead.
"This is really tough for us," he said, "since we need the money from
our family members for our livelihoods and for all our needs.
Dahabshiil represents our lifeline and we want the decision to close the
Aid organizations are calling for an alternative to a shutdown, as
many of the non-governmental organizations working in Somalia, as well
as the United Nations, rely on money transfers through companies like
Dahabshiil to pay local staff.