Somalis scramble after halt of money-transfer system
MINNEAPOLIS — Somalis caught off guard when more than a dozen Minnesota businesses stopped accepting wire transfers said Friday they were scrambling to find a way to get money to relatives in East Africa and options mentioned by the U.S. Treasury weren’t realistic.
Somalis in the U.S. use the businesses, known as hawalas, to send money to relatives in the famine-stricken nation and nearby refugee camps because Somalia hasn’t had a functioning government since 1991 and has no banking system.
But 15 Minnesota hawalas stopped accepting wire transfers Thursday because the bank that handles the majority of the transactions planned to close their accounts Friday. Minnesota-based Sunrise Community Banks has said it fears unintentionally violating regulations designed to combat terrorism financing.
Abdirahim Hersi, 27, of Minneapolis went to a money service business with the money in hand and was surprised to find the transfers had already stopped.
“I don’t know what to do,” said Hersi, who sends $500 every month to his mother, daughter and siblings in the Dadaab refugee camp. He and hundreds of other Somalis gathered to protest in a park.
The U.S. Treasury said there are other legitimate ways for Somalis to send money home. They include setting up accounts with other U.S. banks or sending money through other money transmitters or U.S.-based banks to clearinghouses in Dubai, which arrange for payouts in Somalia. Another option, it said, is that Somalis could declare the money and ship cash or money orders to those same hubs for payout.
Abdulaziz Sugule, former chairman of the Somali Money Services Business and a consultant on the issue, said sending cash would be more risky than wire transfers, as it might not reach its intended destination. People handling the cash risked being killed, he said. Going through multiple money service businesses, adds layers of cost and time to each transaction, he added.
Sunrise Community Banks’ decision to stop the transactions came weeks after two Minnesota women were convicted of conspiracy to provide support to al-Shabab, a group at the center of violence in Somalia and one the U.S. says is tied to al-Qaida. Evidence at their trial showed the women used the hawalas to send money to the terrorist group.
The bank said Friday it would consider an extension of the service if it received some sort of way to minimize its risk. No solution was reached at a meeting Friday with Somali leaders, money-service business owners and officials.
U.S. Attorney B. Todd Jones said a waiver isn’t possible.
“The Department of Justice doesn’t give anyone a free pass right up front for possible future criminal activity,” Jones said.
Kamal Hassan of Edina said he has been sending almost half of his income to family members in the Dadaab refugee camp.
“I blame al-Shabab. Because it is the terrorists’ fault,” he said.
The Associated Press