{"id":4334,"date":"2014-02-14T18:25:56","date_gmt":"2014-02-14T18:25:56","guid":{"rendered":"https:\/\/africaresearchinstitute.org\/wordpress\/?p=4334"},"modified":"2022-03-15T10:00:09","modified_gmt":"2022-03-15T10:00:09","slug":"somali-remittances-update-banking-up-the-wrong-tree","status":"publish","type":"post","link":"https:\/\/africaresearchinstitute.org\/wordpress\/somali-remittances-update-banking-up-the-wrong-tree\/","title":{"rendered":"Somali remittances update: banking up the wrong tree"},"content":{"rendered":"

In a recent blog \u201cAnti-Money Laundering Regulations: Can Somalia survive without remittances<\/a>\u201d the World Bank\u2019s Sonia Plaza warned of the deleterious and undesirable effects of interrupting remittance flows to Somalia.<\/p>\n

This is a timely reminder. Following the inaugural meeting of the UK government\u2019s Action Group on Cross-Border Remittances, the Working Group on a Safer Corridor for UK-Somali Remittances starts work on Monday 17 February. The World Bank is part of both the Advisory Group and the Technical Implementation Group for this welcome initiative.<\/p>\n

ALSO READ –\u00a0<\/strong>Somali remittances: 10 things you need to know<\/a><\/p>\n

It is worth re-emphasising that the crisis for Somali remittances was caused by a broken banking system and the subsequent response of regulators \u2013 not by Somali money transfer operators (MTOs). This is a point which is certainly acknowledged by DFID and all other participants in the Safer Corridor Group; as is the importance of maintaining the flow of remittances to the Somali regions through existing MTOs, in the absence of any functioning banking sector or alternative channels.<\/p>\n

Yet UK government ministers, including the Chancellor of the Exchequer, continue to answer enquiries about the issue in a manner which \u2013 knowingly or otherwise \u2013 stigmatises the conduct of Somali MTOs and the whole UK remittance sector.<\/p>\n

The opening paragraph of official replies usually asserts that \u201cthe government recognises the important role that remittances play in supporting the people and economies of developing countries and the use of money service business (MSB) services by UK residents\u201d. All well and good, but then the template continues: \u201cAs you will be aware, MSBs are a high risk sector for banks. The Government estimates that \u00a31.5 billion is laundered through MSBs every year\u201d.<\/p>\n

For those seeking a solution to the Somali situation, this wording is distinctly unhelpful. In effect, it places the blame for the current crisis squarely at the feet of MSBs while exonerating the risk management of UK banks and the oversight of regulators in recent years.<\/p>\n

As a blanket statement, it also confers guilt on all<\/i> MSBs without drawing any sectoral distinctions between, for example, forex brokers, bureaux de change and remittance MTOs. For companies and sectors unfairly tarnished in this way<\/a>, mounting an effective defence is the stuff of Franz Kafka\u2019s nightmare novel \u201cThe Trial\u201d, in which Josef K. \u2013 who works at a bank \u2013 is prosecuted by an unknown authority for an unspecified crime.<\/p>\n

Of course the UK remittance sector, like any financial services industry, may have its fair share of criminal and rogue operators. But leading Somali MTOs are adamant that they have complied with every regulatory directive and inspection required of them \u2013 and are willing to adhere to even stricter regulation. In private, the National Crime Agency (NCA) says that the Somali corridor is not one which gives rise to undue concern about exploitation by money-launderers and financiers of terrorist activity; and in public the NCA has stressed that it is counter-productive to deny MTOs access to bank accounts. As Somali MTOs prepare to work with government, some new wording in official correspondence and statements on Somali remittances which omits the guilty-by-association cast would surely lead to more constructive discussions.<\/p>\n

On a related topic, it was announced last week<\/a> that the African Institute for Remittances<\/a> (AIR) has chosen Nairobi as the site for its secretariat \u2013 four years after its creation was announced by the World Bank, European Commission and African Union Commission. Somalis no doubt hope that the World Bank, AIR\u2019s implementing agency and a key member of the Safer Corridor Working Group, will be mindful of DFID\u2019s stated intention of designing and implementing its pilot corridor for Somalia within 12 months.<\/p>\n

Edward Paice<\/strong> is Director of Africa Research Institute<\/p>\n

FURTHER READING<\/strong><\/span><\/p>\n

Somalia, remittances and unintended consequences: in conversation with Abdirashid Duale<\/a><\/p>\n

Somali money matters – an update on the remittances saga<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Edward Paice reflects on the undesirable effects of interrupting remittance flows to Somalia and the UK government response which lays the blame, wrongly, at the door of Somali money transfer operators.<\/p>\n","protected":false},"author":7,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"_monsterinsights_skip_tracking":false,"_monsterinsights_sitenote_active":false,"_monsterinsights_sitenote_note":"","_monsterinsights_sitenote_category":0,"_uf_show_specific_survey":0,"_uf_disable_surveys":false,"footnotes":""},"categories":[17],"tags":[320,402,321,198,315,314],"class_list":["post-4334","post","type-post","status-publish","format-standard","hentry","category-blog","tag-abdirashid-duale","tag-action-group-on-cross-border-remittances","tag-dahabshiil","tag-dfid","tag-remittances","tag-somalia"],"aioseo_notices":[],"yoast_head":"\nSomali remittances update: banking up the wrong tree - Africa Research Institute<\/title>\n<meta name=\"description\" content=\"It is worth re-emphasising that the crisis for Somali remittances was caused by a broken banking system and the subsequent response of regulators \u2013 not by Somali money transfer operators (MTOs).\" \/>\n<meta name=\"robots\" content=\"index, follow, max-snippet:-1, max-image-preview:large, max-video-preview:-1\" \/>\n<link rel=\"canonical\" href=\"https:\/\/africaresearchinstitute.org\/wordpress\/somali-remittances-update-banking-up-the-wrong-tree\/\" \/>\n<meta name=\"twitter:card\" content=\"summary_large_image\" \/>\n<meta name=\"twitter:title\" content=\"Somali remittances update: banking up the wrong tree - Africa Research Institute\" \/>\n<meta name=\"twitter:description\" content=\"It is worth re-emphasising that the crisis for Somali remittances was caused by a broken banking system and the subsequent response of regulators \u2013 not by Somali money transfer operators (MTOs).\" \/>\n<meta name=\"twitter:creator\" content=\"@AfricaResearch\" \/>\n<meta name=\"twitter:site\" content=\"@AfricaResearch\" \/>\n<meta name=\"twitter:label1\" content=\"Written by\" \/>\n\t<meta name=\"twitter:data1\" content=\"Yovanka ARI\" \/>\n\t<meta name=\"twitter:label2\" content=\"Est. reading time\" \/>\n\t<meta name=\"twitter:data2\" content=\"3 minutes\" \/>\n<script type=\"application\/ld+json\" class=\"yoast-schema-graph\">{\"@context\":\"https:\/\/schema.org\",\"@graph\":[{\"@type\":\"WebPage\",\"@id\":\"https:\/\/africaresearchinstitute.org\/wordpress\/somali-remittances-update-banking-up-the-wrong-tree\/\",\"url\":\"https:\/\/africaresearchinstitute.org\/wordpress\/somali-remittances-update-banking-up-the-wrong-tree\/\",\"name\":\"Somali remittances update: banking up the wrong tree - Africa Research Institute\",\"isPartOf\":{\"@id\":\"https:\/\/africaresearchinstitute.org\/wordpress\/#website\"},\"datePublished\":\"2014-02-14T18:25:56+00:00\",\"dateModified\":\"2022-03-15T10:00:09+00:00\",\"author\":{\"@id\":\"https:\/\/africaresearchinstitute.org\/wordpress\/#\/schema\/person\/03660fee7530e23ea5b5e53fe67eedf2\"},\"description\":\"It is worth re-emphasising that the crisis for Somali remittances was caused by a broken banking system and the subsequent response of regulators \u2013 not by Somali money transfer operators (MTOs).\",\"breadcrumb\":{\"@id\":\"https:\/\/africaresearchinstitute.org\/wordpress\/somali-remittances-update-banking-up-the-wrong-tree\/#breadcrumb\"},\"inLanguage\":\"en-US\",\"potentialAction\":[{\"@type\":\"ReadAction\",\"target\":[\"https:\/\/africaresearchinstitute.org\/wordpress\/somali-remittances-update-banking-up-the-wrong-tree\/\"]}]},{\"@type\":\"BreadcrumbList\",\"@id\":\"https:\/\/africaresearchinstitute.org\/wordpress\/somali-remittances-update-banking-up-the-wrong-tree\/#breadcrumb\",\"itemListElement\":[{\"@type\":\"ListItem\",\"position\":1,\"name\":\"Home\",\"item\":\"https:\/\/africaresearchinstitute.org\/wordpress\/\"},{\"@type\":\"ListItem\",\"position\":2,\"name\":\"Somali remittances update: banking up the wrong tree\"}]},{\"@type\":\"WebSite\",\"@id\":\"https:\/\/africaresearchinstitute.org\/wordpress\/#website\",\"url\":\"https:\/\/africaresearchinstitute.org\/wordpress\/\",\"name\":\"Africa Research Institute\",\"description\":\"Building on the Dynamism in Africa Today\",\"potentialAction\":[{\"@type\":\"SearchAction\",\"target\":{\"@type\":\"EntryPoint\",\"urlTemplate\":\"https:\/\/africaresearchinstitute.org\/wordpress\/?s={search_term_string}\"},\"query-input\":{\"@type\":\"PropertyValueSpecification\",\"valueRequired\":true,\"valueName\":\"search_term_string\"}}],\"inLanguage\":\"en-US\"},{\"@type\":\"Person\",\"@id\":\"https:\/\/africaresearchinstitute.org\/wordpress\/#\/schema\/person\/03660fee7530e23ea5b5e53fe67eedf2\",\"name\":\"Yovanka ARI\",\"url\":\"https:\/\/africaresearchinstitute.org\/wordpress\/author\/y-ariyigasdhb76r\/\"}]}<\/script>\n<!-- \/ Yoast SEO plugin. -->","yoast_head_json":{"title":"Somali remittances update: banking up the wrong tree - Africa Research Institute","description":"It is worth re-emphasising that the crisis for Somali remittances was caused by a broken banking system and the subsequent response of regulators \u2013 not by Somali money transfer operators (MTOs).","robots":{"index":"index","follow":"follow","max-snippet":"max-snippet:-1","max-image-preview":"max-image-preview:large","max-video-preview":"max-video-preview:-1"},"canonical":"https:\/\/africaresearchinstitute.org\/wordpress\/somali-remittances-update-banking-up-the-wrong-tree\/","twitter_card":"summary_large_image","twitter_title":"Somali remittances update: banking up the wrong tree - Africa Research Institute","twitter_description":"It is worth re-emphasising that the crisis for Somali remittances was caused by a broken banking system and the subsequent response of regulators \u2013 not by Somali money transfer operators (MTOs).","twitter_creator":"@AfricaResearch","twitter_site":"@AfricaResearch","twitter_misc":{"Written by":"Yovanka ARI","Est. reading time":"3 minutes"},"schema":{"@context":"https:\/\/schema.org","@graph":[{"@type":"WebPage","@id":"https:\/\/africaresearchinstitute.org\/wordpress\/somali-remittances-update-banking-up-the-wrong-tree\/","url":"https:\/\/africaresearchinstitute.org\/wordpress\/somali-remittances-update-banking-up-the-wrong-tree\/","name":"Somali remittances update: banking up the wrong tree - Africa Research Institute","isPartOf":{"@id":"https:\/\/africaresearchinstitute.org\/wordpress\/#website"},"datePublished":"2014-02-14T18:25:56+00:00","dateModified":"2022-03-15T10:00:09+00:00","author":{"@id":"https:\/\/africaresearchinstitute.org\/wordpress\/#\/schema\/person\/03660fee7530e23ea5b5e53fe67eedf2"},"description":"It is worth re-emphasising that the crisis for Somali remittances was caused by a broken banking system and the subsequent response of regulators \u2013 not by Somali money transfer operators (MTOs).","breadcrumb":{"@id":"https:\/\/africaresearchinstitute.org\/wordpress\/somali-remittances-update-banking-up-the-wrong-tree\/#breadcrumb"},"inLanguage":"en-US","potentialAction":[{"@type":"ReadAction","target":["https:\/\/africaresearchinstitute.org\/wordpress\/somali-remittances-update-banking-up-the-wrong-tree\/"]}]},{"@type":"BreadcrumbList","@id":"https:\/\/africaresearchinstitute.org\/wordpress\/somali-remittances-update-banking-up-the-wrong-tree\/#breadcrumb","itemListElement":[{"@type":"ListItem","position":1,"name":"Home","item":"https:\/\/africaresearchinstitute.org\/wordpress\/"},{"@type":"ListItem","position":2,"name":"Somali remittances update: banking up the wrong tree"}]},{"@type":"WebSite","@id":"https:\/\/africaresearchinstitute.org\/wordpress\/#website","url":"https:\/\/africaresearchinstitute.org\/wordpress\/","name":"Africa Research Institute","description":"Building on the Dynamism in Africa Today","potentialAction":[{"@type":"SearchAction","target":{"@type":"EntryPoint","urlTemplate":"https:\/\/africaresearchinstitute.org\/wordpress\/?s={search_term_string}"},"query-input":{"@type":"PropertyValueSpecification","valueRequired":true,"valueName":"search_term_string"}}],"inLanguage":"en-US"},{"@type":"Person","@id":"https:\/\/africaresearchinstitute.org\/wordpress\/#\/schema\/person\/03660fee7530e23ea5b5e53fe67eedf2","name":"Yovanka ARI","url":"https:\/\/africaresearchinstitute.org\/wordpress\/author\/y-ariyigasdhb76r\/"}]}},"_links":{"self":[{"href":"https:\/\/africaresearchinstitute.org\/wordpress\/wp-json\/wp\/v2\/posts\/4334","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/africaresearchinstitute.org\/wordpress\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/africaresearchinstitute.org\/wordpress\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/africaresearchinstitute.org\/wordpress\/wp-json\/wp\/v2\/users\/7"}],"replies":[{"embeddable":true,"href":"https:\/\/africaresearchinstitute.org\/wordpress\/wp-json\/wp\/v2\/comments?post=4334"}],"version-history":[{"count":3,"href":"https:\/\/africaresearchinstitute.org\/wordpress\/wp-json\/wp\/v2\/posts\/4334\/revisions"}],"predecessor-version":[{"id":13164,"href":"https:\/\/africaresearchinstitute.org\/wordpress\/wp-json\/wp\/v2\/posts\/4334\/revisions\/13164"}],"wp:attachment":[{"href":"https:\/\/africaresearchinstitute.org\/wordpress\/wp-json\/wp\/v2\/media?parent=4334"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/africaresearchinstitute.org\/wordpress\/wp-json\/wp\/v2\/categories?post=4334"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/africaresearchinstitute.org\/wordpress\/wp-json\/wp\/v2\/tags?post=4334"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}