Federal officials, banks should find a way to restart transfers.
It's been about 10 days since the last bank in Minnesota stopped transferring funds from here to Somalia, citing federal rules intended to stop terror financing. Since then, all of the parties involved have said they want to find a way to resume the service, understanding that thousands of Somalis depend on remittances from family members in Minnesota.
So far the conversations haven't done the job, and Somali-Americans in Minnesota are scrambling to find ways to help their loved ones back home. Local banks and federal officials should keep pushing for a solution. The federal State and Treasury Departments should quickly find a way to allow legal, much-needed money transfers to the famine- and war-torn nation. No one wants funds in the hands of terrorists, but it isn't right for innocent people to lose their ability to send money to fight famine and poverty in their homeland.
In addition to humanitarian concerns, cutting off the flow of funds could become a national-security problem for America. If Somali-Americans can't continue the lifeline to friends and families through transparent, traceable means, they may rely on less scrupulous underground methods in which the money is more likely to be stolen or diverted for the wrong purposes.
The local Somali community is in this situation because just over a week ago, Sunrise Community Banks, the parent company of Franklin Bank, closed accounts with Minnesota's 14 Somali money-transfer groups known as hawalas. Franklin had been the only financial institution left in the state, and perhaps the nation, that worked with hawalas to get funds to the East African nation and to nearby refugee camps.
Because Somalia has no formal banking system or government, the hawalas had been necessary as middlemen to get the funds from places like Dubai to people in East Africa. An estimated $100 million is sent to Somalia annually from the United States, and the largest population of Somalis is in the Twin Cities.
A Sunrise official said the bank cut off the accounts because officials feared they would be held liable under federal rules if any transferred funds ended up in the wrong hands. They took the action after two Minnesota women were convicted in October of wiring more than $8,600 through hawalas to Al-Shabab, a militant Islamic group in Somalia classified by U.S. authorities as a terrorist organization. And in December, a Somali refugee in San Diego confessed to a similar crime.
Although no U.S. bank has ever been prosecuted for sending money to Somalia, Sunrise officials say it's too risky to continue facilitating the remittances. For weeks before Sunrise stopped making transfers, elected officials and Somali money-transfer operators had lobbied federal officials to grant the bank a waiver that would have removed its liability risk.
Minnesota Sens. Amy Klobuchar and Al Franken, as well as Rep. Keith Ellison, sent letters to several federal agencies explaining the risk to national security in shutting down the hawalas. They pointed out that if remittances from Somali expatriates living in the United States cease, it could benefit Al-Shabab by allowing the organization to claim that America was preventing needed funds from getting to suffering Somalis. Ellison has also suggested that a longer-term solution might be for the Somali community to open its own banks or money-wiring businesses.
In the meantime, the banks and the federal government should turn their talk about resolving the problem into action -- quickly. The lives of suffering Somalis may hang in the balance.
Source: Star Tribune
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