A small number of Minneapolis-area Somali money transfer shops have reopened amid heightened scrutiny from banks, reports the Minnesota Star Tribune on Jan. 25, 2012. Though the amount transferable is limited to $500, the services are the only means many Somali-Americans have available to send remittances to family living in Somalia, a country lacking a functioning government or banking system, and plagued by drought and civil strife for almost 20 years. The inability of nearly 70,000 Somalis that live in the state to send money home had drawn strong criticism from Sen. Al Franken (D-MN) and other Minnesota legislators. At the end of December, the state's 14 Somali money transfer shops were shut down after the last Minnesota bank to wire money to Somalia closed their accounts.
In a letter
to Secretary of State Hillary Clinton and Treasury Secretary Timothy Geithner in December, Sen. Franken highlighted three major concerns he had in cutting off the remittances:
“First, it would deprive many Somalis of a major source of sustenance….Second, the lack of legitimate means for the transmission of funds to Somalia may end up driving people into more difficult-to-track channels for sending money, which heightens the risk of funds ending up in the hands of bad actors. Third, an end to the flow of remittances from the U.S. to Somalia would be a potential victory for al-Shabbab, which could then claim that America was preventing needed funds from getting to suffering Somalis.”
The last major bank to offer these services, Sunrise Community Banks, said in statement on their website
that “the humanitarian consequences of this decision weigh heavily on us. That is why we continue to work with determination and hope to discover a solution.” Adding, the bank has “reached out to multiple government agencies and officials, have made a specific proposal, and have told the agencies that we are seeking a constructive exchange with them in an effort to reach an accommodation that would satisfy the concerns of those sending funds, the government and the bank.” Sunrise Banks had stepped in to aid in the money-delivering process a few years ago after most major banks stopped aiding the Somali community, citing pressure from the U.S. State Department and Treasury Department. The government supposedly has discouraged banks from aiding the Somali community because of fears that the money being sent would aid terrorists in Somalia.
Both agencies have made limited public comments about the difficulties Somali-Americans are having sending remittances to Somalia. At a press briefing on Jan. 24
, Bruce Wharton, the deputy assistant secretary for Public Diplomacy, Bureau of African Affairs at State, said while he knew of some financial institutions providing transfer services, “the State Department is in discussions with Treasury and others to try to make sure that that flow from the Somali diaspora back home is safe, that the money does not go to people who wish to harm the United States, but that it can be a contribution to the people of Somalia overcoming the crisis that they face right now.”
Center for American Progress’ Sarah Margon reports
that Treasury has acknowledged on its blog
that many Somali-Americans depend on these services to send “money to their loved ones in the region struggling to survive,” and promotes “the continued use of legitimate and transparent methods for these critical transfers,” but has provided no guidelines, or even a policy memo on the best ways to do so.
“Whereas, The Somali community in Minneapolis provides significant financial support to their relatives in Somalia that provide basic needs like food, shelter, clothing and education: and
“Whereas, The halting of these funds causes great hardship to many people in need in Somalia:
“Now, Therefore Be It Resolved the City Council of the City of Minneapolis that we stand shoulder to shoulder with our Somali-American colleagues, neighbors and constituents in their desire to support their loved ones in the Horn of Africa and across the globe.
“Be It Further Resolved that we strongly urge all concerned parties to find an amicable solution that facilitates the normal flow of remittances without compromising the safety and security of the United States.”
The BBC estimates
the “U.S.-based Somalis are believed to send about $100 million back home each year – largely from Minnesota.” This financial support is believed to be as much as one-third of Somalia's Gross National Product (GNP).