Barclays account shutdown raises Somali remittance fears By BBC | Wednesday, July 10 2013 at 16:53
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 per cent 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.
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.
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