Somalia gets the equivalent of 35 percent of its gross national product from remittances, at least $1.3 billion from individuals abroad. That’s more than the nation receives from all international aid (both governmental or private) and foreign direct investment combined. According to a February study from Oxfam, remittances likely provide up to 80 percent of Somali small-business capital and “one out of every three Somalis” depends on remittances for “food, school or basic healthcare.”
But thanks to U.S. Treasury regulations meant to stop money laundering for terrorists, the last U.S. bank to do major business with Somali money transferring companies, Merchant’s Bank of California, stopped in February. Somali remittance services generally need to use a bank in the country from which the money is being sent, yet according to Oxfam’s report, “in recent years [those businesses] have found it increasingly difficult to access banking services in the USA, the UK, Australia and elsewhere” because of money-laundering regulations.
Democratic Rep. Keith Ellison (Minn.) wrote to the Treasury Secretary and other executive branch officials, asking them “to address the acute shortage of lifesaving money transmission services to Somalia.” Ellison told the Minnesota Star-Tribune that when he asked if there were any possible legislative solutions to get money flowing back to Somalia, executive branch representatives “literally stared back at us with blank expressions, with no proposals.”
The Christian Science Monitor reported in March that “no Somali money transfer operator has ever been convicted of sending money to an illicit entity by the United States.”
Source: Reason
