Barclays prevented from ending Somali ‘lifeline’

Barclays prevented from ending Somali ‘lifeline’

“The risk of financial crime is an important regulatory concern and we take our responsibilities in relation to this very seriously,” it said in a statement on the injunction.

Banks have been tightening rules in a bid to comply with international regulations against money laundering and funding terrorism, but experts said that there were no known cases of regulatory breaches by Somali companies.

“We are not just a business… We enable Somalis to help themselves, by sending money to every corner of the Somali territories to enable relatives and friends to buy food, medicine and to pay for education,” said Dahabshiil, which is the largest money transfrer business in Africa.

“Remittances are also used for investment in business start-ups and property, remittances are helping Somalis get the country back onto its feet.”

It was feared that closing organised transfers could drive them underground.

Abdi Farah Shirdon, Somali Prime Minister, welcomed the decision, while warning that a “permanent solution must be found to keep open this vital lifeline.”

The best solutions would be to set up formal banking systems, experts say.

Somalis send money back home via transfer businesses which can accept deposits abroad and immediately credit recipients back home. But regulations require transfer systems pass money through a bank account.

“As Somalia continues to recover from two decades of unrest these remittances remain an essential source of income for more than half of all Somalis,” Mr Shirdon added.

“To many these remittances pay for a basic standard of living, allowing families to put food on the table, clothe their family, treat illnesses and educate their children.”

Charity groups have been campaigning to keep the transfer system afloat.

“The ruling provides a small window of opportunity for Somalis living in the UK to send money home to loved ones in one of the poorest countries in the world,” Oxfam’s Ben Phillips said.

“However, this does not solve the problem – a long-term fix is needed to safeguard hundreds of thousands of people relying on the money for food, medicines and education.”

Source: AFP, Press Association

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