20111231
AFP
US Somalis said Friday that a Minnesota bank group's decision to cut off their money transfer business would have a devastating impact on people in the war-torn African country.

Somalis were preparing to protest in Minneapolis, Minnesota after Sunrise Community Banks said they would shut down the accounts of money transfer shops handling Somalia-related business.

The move puts a stop to the main avenues for the largest US Somali community to send millions of dollars a year back to relatives in the eastern African country wrecked by years of war and famine.

But Sunrise said it needs the government to remove "legal obstacles" -- which Somalis say is the threat of prosecution if funds end up in the hands of designated terrorists -- before it can resume the service.

"The impact is really drastic. Almost all the Somalis here were relying on the Sunrise banks to send money to their loved ones in Somalia," said Saeed Fahia, executive director of the Confederation of Somali Community in Minnesota.

"Anybody who wants to do some work in Somalia has to use the 'hawala' (money transfer) system. People want to support schools, hospitals. There is no alternative."

Sunrise, an association of three banks, announced in early December that it would close the accounts of a dozen or so money transfer shops serving an estimated 30,000 Somalis in the region.

Sunrise gave no clear reason for the action, but it came after two Minnesota Somali women were convicted in October of sending thousands of dollars to Al-Qaeda-linked radical Shebab militants in Somalia, designated terrorists by the US government.

On December 1, an immigrant Somali woman in Los Angeles pleaded guilty of sending money to the Shebab.

Somalis send money back home via the hawala transfer shops, which can accept small deposits on the US side and immediately credit recipients in Somalia before any money is actually transferred.

The hawalas, though, need the large banks to help balance the books with larger transfers.

The Somali American Money Services Association said its members "believe that their businesses have been singled out and denied vital banking services."

"Cutting more than $100 million every year that the Somali Americans send their families will adversely impact the already fragile situation in Somalia and push millions to poverty," it said.

In a statement on Thursday, Sunrise apologized for shutting the accounts, and called for unspecified government remedies to allow them to continue the business.

"Sunrise Community Banks recognizes the potential humanitarian impacts that the lack of money transfer services has on the people of Somalia," it said.

Sunrise noted that the government has "remedied legal obstacles" to allow humanitarian groups to send food to Somali famine victims.

"The bank remains hopeful that the government would be willing to consider a similar solution in this instance," it added.

The US Treasury declined to comment on the issue.

But terror financing specialist Scott Rembrandt said on the agency's website last week that banks are responsible themselves to avoid being involved in money laundering or terrorist financing,

"So many Somali-Americans have sent money to their loved ones in the region struggling to survive," he said.

However, he added, "maintaining safe, transparent payment channels is of the utmost importance given that funds have also been transferred to Al-Shebab."