Posts Tagged ‘remittances’

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Uganda’s police chief to probe remitters

May 3, 2015

The head of Uganda’s national police force said they will investigate money services businesses (MSBs) after Kenya suspended 13 MSBs alleged to finance the terrorist group al-Shabaab in Somalia. Several of those same companies operating in Somalia and Kenya also do business in Uganda.  Dahabshiil is probably the most prominent of the money transfer companies identified.

From the Kampala Observer via All Africa (h/t Chris Pariso):

Police chief Kale Kayihura has said they are to investigate transactions of money transfer companies here, after evidence in Kenya suggested that some were being used to channel money for financing terrorism.

Speaking in Kampala last week, Kayihura said some of the transfer companies under investigation in Kenya are affiliated to some institutions in Uganda. According to an April 14 gazette notice issued under Kenya’s Prevention of Terrorism Act and signed by police chief Joseph Boinnet, money transfer companies topped the list of 86 accounts alleged to fund terror groups.

The notable money transfer companies mentioned include Dahabshiil, which has agent locations and branches in 126 countries worldwide, including Uganda. Another mentioned company is Kendy Money Transfer Limited, which launched its money transfer services in Kenya last September…

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Kenya suspends 13 remitters including Dahabshiil

April 17, 2015

Kenya has frozen the bank accounts of 86 people and suspended the licenses of 13 money transfer organizations, including Dahabshiil, for their alleged role in funding the terrorist group al-Shabaab.  From NTV Kenya last week:

Critics of decisions like this often claim that regulators are cutting off “life lines” to poor Somalis by making money transfers to Somalia more difficult.  But as the news report points out, there are major, conventional banks that provide wire services.  It’s just that the fees are higher with the banks than with smaller money transfer firms and hawala dealers.  Kudos to Kenya for attempting to rein in the funding of al-Shabaab.

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Crime, sport, and jihad: suggested news reading

January 22, 2015
  • The feds have fined MoneyGram’s former chief compliance officer personally for $1 million for “willful” anti-money laundering failuresmore>>
  • U.S. blacklists soccer team due to drug trafficking by its owner… more>>
  • Citing “extremist” links, Britain ends taxpayer grants to the Muslim Charities Forummore>>
  • Human trafficking has become a standard business practice for terrorist groups… more>>
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Terror money news: recommended reading

November 6, 2014
  • Halal food certification enriches terror affiliates… more>>
  • Why terrorists love money transfer companies… more>>
  • Vice President says the Gulf monarchies funded ISISmore>>
  • Nigeria’s central bank denies financing Boko Harammore>>
  • An informative review of the controversial $1.3 billion in U.S. foreign aid to Egypt through American and Egyptian eyes… more>>
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Jihadist’s family out of business after secret $9 million transfer to Lebanon

September 29, 2014

Australian financial authorities have foiled an ongoing attempt to keep millions of dollars in transactions off the books by a remittance company owned by a terrorist’s sister and her husband. The case illustrates the possibilities for financial system abuse by small, non-bank financial companies based in the West with significant business operations in high-risk countries like Lebanon. The case also provides justification for probing the money trails and the sympathies of the families of convicted terrorists.

Hat tip to El Grillo for sending in related news. From The Sydney Morning Herald on Sept. 17:

Sharrouf family firm shut over terror funding fears

A Lakemba money transfer business owned by the sister and brother-in-law of convicted Sydney terrorist Khaled Sharrouf has been suspended amid concerns it was sending millions of dollars to the Middle East to finance terrorism.

Damour Sharrouf and her husband Ahmed Alwash have had their Lakemba firm Bisotel Rieh Pty Ltd suspended after the financial intelligence agency AUSTRAC became concerned about millions of dollars sent to Turkey and Lebanon that the firm has failed to account for. It is the first such suspension over suspected terrorism financing.

Ms Sharrouf, 37, is the older sister of Khaled Sharrouf, the 31-year-old who is wanted for terrorism offences and who escaped to the Middle East on his brother’s passport.

Local business owners told Fairfax Media they had seen Khaled Sharrouf inside the Lakemba business, which also operates a travel firm, before he went overseas.

“Yes, I’ve met him before,” barber Mohamad Machlouche, who owns the business next door to the money transfer firm, said. “He seemed different before [he went overseas]. He seemed normal, looking for work, was a normal person.

“No one on earth was expecting anything like this.”

According to the money transfer firm’s website, it has an office in the northern Lebanon city of Tripoli, seen as an epicentre for Sunni extremism in the country and a gateway to funding militant groups in neighbouring Syria – raising the possibility that money could even have gone to the brutal Islamic State group.

AUSTRAC’s acting head John Schmidt told Fairfax Media the agency’s concerns were based on the fact that Bisotel Rieh was failing to report all of the money it sent overseas and often refused to reveal who was ultimately receiving the funds. Also, it was sending money to “high terrorism financing risk jurisdictions”.

“We’ve had some concerns about the quality of their reporting. For example, for the period from January to August this year, they reported international funds transfers of $12.3 million. We believe from other sources that it was in fact closer to $21.3 million,” Mr Schmidt said.

“So in that eight-month period, there’s already a $9 million discrepancy. That causes concerns.”…

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Why can’t you send money home to Somalia? Because your politicians want sharia banking first

September 8, 2014

The fairy tale is that existing financial channels from conventional Western banks in England and Minnesota can create a new, “safe corridor” for high-tech, well-screened remittances from the Somali diaspora back to their families with an eliminated risk of financing terrorism or corruption in the process. The sharia banking plan is to leapfrog over the creation of a conventional, interest-based banking sector in Somalia by establishing sharia financial sector based exclusively on Islamic law. The word on the street is that the notorious money transfer company Dahabshiil is peddling influence with Somali politicians to ensure that no new financial institution cuts into their racket—a charge which (like every other mounting charge against it) Dahabshiil denies.

The result of all this is that there has yet to be a conventional bank in Somalia that can provide banking and money transfer services.  Thus it is becoming increasingly clear that Western banks should not be blamed for the inability of Somali leaders to authorize their own private banks and remittance channels.  The next time you hear somebody demand Western banks to keep the “lifeline” of Somali remittances open, ask yourself why Somali politicians won’t create a lifeline of their own.

The following excerpt from an Aug. 25 Foreign Policy article entitled, “Franchise Opportunity: Western Union in Somaliland” (hat tip Sal) goes a long way to explain why:

…For the past year, Somaliland’s parliament has failed to enact legislation allowing the creation of a commercial banking sector. The reluctance, government insiders say, is rooted in the belief that sends the muezzin’s call to prayer echoing from every corner of Hargeisa five times a day: the Islamic faith. Mindful of a constitution explicitly drafted according to Islamic principles, Somaliland’s parliamentarians have approved an Islamic Banking Law, but have yet to pass its commercial equivalent. They fear it could introduce the charging of interest on economic activity, which is unacceptable under sharia law.

“We’ve visited parliament; we have sat down with the chairman to explain how important this is, how much we need these foreign banks. We push and push and push,” says Abdilahi Hassan Aden, director general of Somaliland’s (unrecognized) central bank. “But we are still waiting.”

A Western advisor to the government sees parliament as ultimately persuadable, but not without work. “A lot of this is about changing the narrative when it comes to religion, changing mentalities,” the advisor says. “Islamic countries like Malaysia or Indonesia, for example, still manage to have commercial banking sectors.”

In private, some officials voice the suspicion that a commercial banking law has been so long in coming because the MTOs, influential local economic players that they are, until recently preferred the remittance system to remain just as it was. It’s a charge Dahabshiil, for its part, rejects. Abdirashid Duale, chief executive officer, insists the company is keen to see legislation allowing commercial banking passed. “Dahabshiil is very supportive of any law or other initiative that supports the commercial banking sector,” he says.*

Dahabshiil, which says it does background checks on all the customers it can, sees itself instead as a victim of world events. “All of this started because of 9/11,” Duale says. “Before then, there was no difference between us and a grocery store opening a bank account to deposit its earnings. With 9/11, the world changed, especially for Muslims.”

MTO operators say Barclays’s move would do the opposite of improving competition on a continent whose inhabitants already pay well over the odds for their money transfers. U.S.-based Western Union and MoneyGram, which the Barclays decision would not affect, charge far higher fees than Dahabshiil, which prides itself on being the cheapest MTO in the world.

Dahabshiil has now applied for and been granted a banking license under Somaliland’s existing Islamic banking legislation. But if that materializes, there would still be an open question of how thousands of rural families who will never see the inside of a bank — too far away, too expensive — would survive financially.

After a spirited lobbying campaign by the Somali diaspora, fronted by Olympic sprinter Mo Farah, whose family lives in Somaliland, the British government set up an action group in the fall of 2013 to try to hammer out a solution. The Department for International Development (DFID), alongside the British Treasury, is working on establishing a “safer corridor” for remittances. Its feasibility study explores ways of improving customer due diligence, from biometric fingerprinting to PINs to bar codes, and the establishment of an independent “trusted third party” to audit transactions. But more than a year after the remittance issue first blew up, the “safer corridor” remains a distant aspiration.

British consultants who were in Hargeisa to address a conference on money laundering, attended by Somaliland government ministers, remittance companies, the local Chamber of Commerce, and the World Bank, dismiss the “safer corridor” idea as a non-starter. (They have been commissioned by Dahabshiil to carry out a regional banking survey.) “It’s a Hans Christian Andersen story concocted by DFID, a case of the emperor’s new clothes,” says Peter Norris of Obiter Consult. “It’s been very unhelpful in luring everyone into a false sense of security.”

“The idea that you can have some massive computer system and somehow feed all this information in … and the computer will somehow work out which clients are dodgy and which are clean is a nonsense,” he adds…

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Singer shot dead after saying Somali bank funds terror

July 25, 2014

UPDATE—FEB. 21, 2015:

In October 2012, Dahabshiil commenced defamation proceedings in The Netherlands against Dahir Alasow (a Somali asylum seeker living in The Netherlands) in respect of various articles written by Mr Alasow and published on his websites including Sunatimes, Waagacusub and ASOJ. These articles alleged that Dahabshiil was, inter alia, involved in the financing of terrorism and other serious crimes, allegations which were categorically denied by Dahabshiil.

On 16 December 2014, the ’s-Hertogenbosch Court of Appeal of The Netherlands, following an extensive examination of the evidence, ruled that the articles were untrue and defamatory of Dahabshiil. Mr Alasow was ordered to remove various articles containing the defamatory allegations from his websites, publish a notice of rectification and pay Dahabshiil’s legal costs. The court’s decision can be found here:
http://uitspraken.rechtspraak.nl/inziendocument?id=ECLI:NL:GHSHE:2014:5351


Somali super star singer

MP Saado Ali Warsame

Saado Ali Warsame, a well-known singer and member of parliament in Somali, was assassinated Wednesday on the streets of Mogadishu near the Ambassador Hotel. The jihadist organization Al-Shabaab claimed responsibility for the murder.

The BBC reports that “a spokesman for the Islamist al-Shabab group, Abdulaziz Abu Musab, told the BBC that she was targeted for her politics.”

Warsame herself believed that a bounty was offered for her killing by Dahabshiil, a UAE-based money transfer business that operates primarily in Somalia. In 2013, the news website Suna Times reported that Warsame had “accused Dahabshiil of putting a two million dollar bounty for her death, shortly after she released a song called Dahabshiil ha dhigan (‘Don’t Deposit with Dahabshiil’).” Money Jihad has been one of the only other English-language websites to cover those allegations.  Dahabshiil’s attorneys have previously denied the allegations in correspondence with Money Jihad.

Warsame’s album warned fans about Dahabshiil’s ‘linkage to tribalism and extremism,’ and satirized the company’s name, which means “goldsmith” by calling it Dhiigshiil, which means “bloodsmith.” Dahabshiil makes regular payments to al-Shabaab.

A dual U.S. citizen, Warsame’s family should demand a full investigation by federal authorities, and the family should consider legal action against the perpetrators.

Despite all the warning signs, prominent charities and spokesmen such as Olympics medalist Mo Farah have insisted that Barclays bank continue offering remittance services in conjunction with Dahabshiil. Those advocates for partnership with Dahabshiil should review this tragic case of Ms. Warsame.

Speaking at her funeral, Prime Minister Abdiweli Sheikh Ahmed said, “We will never stop to hunt the criminals and we will punish them.” Let’s hope that is the case. Another East African musician, Nimo Djama, has also sung out against Dahabshiil’s role in terrorist financing. Officials in the UK and U.S. need to wake up about the threat of Dahabshiil before this happens again.