Business
Blocking of wire transfers from the US to Somalia could cause hardship
Jamal said he is urging money transfer companies, known as hawalas, to make sure “money doesn’t fall into the wrong hands.”
The decision to end Somali remittances came weeks after two Minnesota women were convicted in October of conspiracy to provide support to al-Shabaab, the most dangerous insurgent group in East Africa.
Evidence showed the women, who claimed they were sending money to charity, used the hawalas to send more than US$8,600 to the terror group, which has ties to al-Qaida. In another case, a Somali refugee in San Diego admitted this month that she sent money to the group.
Joe Witt, president and chief executive officer of the Minnesota Bankers Association, said banks are required to monitor their customers and report on certain types of activity. If they make a mistake or report something wrong, they face huge penalties.
“It’s an incredible framework of rules and regulations, and if you do it wrong, it’s absolutely a nightmare for the banks,” Witt said.
Meanwhile, he said, money service businesses that wire funds internationally, especially to places that might be unstable, have been tagged as businesses that involve heightened security and compliance measures. While that doesn’t mean every hawala is risky, he said a lot of banks have “made a determination that it’s not a type of business they are comfortable in conducting.”
Adan Hassan, spokesman for the Somali American Moneywiring Association and a manager at Kaah Express, a Minnesota-based hawala with locations in six other states, said the hawalas are subject to federal and state regulations, and he understands the regulations are necessary for national security and the well-being of the community. The hawalas must comply in order to keep their licenses.
Federal regulations require that hawalas ask for identification from anyone submitting over US$3,000, Hassan said, though some companies require IDs for lower amounts as well. The hawalas collect the name, location, and phone number of the beneficiary, and the sender gives the hawala cash or a check or money order. The money is processed and the sender receives a receipt.
