US money laundering laws and banking decisions hurting Somalia families
Adeso invites you to a briefing marking the launch of a new joint research report with Inter American Dialogue and Oxfam America, keeping the Lifeline Open: Remittances and Markets in Somalia. The briefing will take place on September 6th, 2013 at Safari Restaurant 3010 4th Av South, Minneapolis, Minnesota 55408 from 6pm-8pm. The launch will discuss the impact of bank account closures of US-based money transfer operators to the Somali community.
Every year, a $1.3 billion stream of cash that the people of Somalia depend on for food, shelter, clothing and other necessities is under threat according to a new report from Adeso, the Inter-American Dialogue, and Oxfam America released on July 31st 2013. Fear of US anti-terror and money laundering laws is leading banks to close critically needed bank accounts of US-based money transfer operators. With the lack of a formal banking system in Somalia, families now face the possibility of being unable to access funds from friends and relatives that they desperately require for survival.
More money in remittances is sent to Somalia than the amount the country receives in humanitarian assistance, development assistance and foreign direct investment combined. Somalis based in the US send approximately $214 million each year back to their families in Somalia; nearly the same amount the US sends in foreign assistance to Somalia ($242 million). This aid allows individuals and families to spend money based on their specific needs and immediate priorities.
The money is a lifeline for many Somalis, providing them with a means to meet their immediate needs as well as open and sustain small businesses, send children to school, and invest in their communities. Remittances to women, in particular, result in investments in education, health, and nutrition. “More than half the recipients of remittances are women,” said Degan Ali, Executive Director, Adeso. “These are teachers and business owners. The money they receive can account for more than half of their income.”
Somali money transfer operators also play a critical role in cash relief programs, which Adeso, Oxfam, the United Nations, the US Administration for International Development and other humanitarian agencies used to help Somalis buy food and other basic necessities during the 2011 famine.
“These companies don’t just connect Somalis to their relatives; they connect Somalis with humanitarian agencies like ours so we can provide life-saving assistance,” Ali added.
Adeso Press Release, Friday, September 06, 2013