Kenya Shuts Down 13 Somali Remittance Firms

Kenya Shuts Down 13 Somali Remittance Firms

Kenya has suspended the licences of 13 Somali remittance firms and targets to freeze the accounts of dozens of individuals, NGOs and travel companies as it tightened the noose on suspected sympathisers of the Al-Shabaab terror group.

The move comes in the wake of an attack that killed 148 Garissa University students last week.

Those affected include market leader Dahabshiil, which is used by 95 per cent of international agencies and charities in Somalia, as well as smaller players like Kendy, UAE Exchange, Amal, Iftin, Kaah Express and Amana.

Others include Juba Express, Tawakal, Bakaal, Hodan, Continental and Flex.

Inspector-General of Police Joseph Boinnet, in a special issue of the Kenya gazette published on Tuesday, listed the names of 85 entities suspected to have links with the terrorist group.

The list includes Muslims for HumanRights (Muhuri), a Nairobi-based forex bureau and at least four minor bus companies.

Somalia’s Central Bank governor Bashir Issa Ali confirmed that 13 Somali money transfer firms have been officially notified by Central Bank of Kenya (CBK) about the closure of accounts adding that the move would have a devastating impact Kenya’s Somali community, numbering just overone million people.

“It’s going to hurt Somalis in Kenya more than Somalis in Somalia. The amount of money sent from abroad to Kenya is huge,” Ali was quoted by Reuters as having said, pointing out that many Somalis in Kenya rely on relatives abroad for basics, including school fees.

Treasury principal secretary Kamau Thugge said investigations are ongoing on the financial activities of the suspected entities and individuals.

He told a press briefing in Nairobi that the accounts of firms and individuals found to aiding the Al-Shabaab terror group would be frozen.

The owner of one Somali money transfer firm told Reuters the Kenyan government has not suspended remittance firms’ bank accounts but that the CBK had instead revoked their licences.

“Last night we simply received a notice, without discussion and without informing us (beforehand),” said the owner. “This is not the way to fight terrorists.”

The move by Kenya comes in the wake of similar action by the United Kingdom and the United States despite concerns by human rights groups that the drastic measureswould leave thousands in the war ravaged nation disadvantaged.

On February 6, 2015, US banks stopped money transfers to Somalia because of strict regulations set by the US Office of the Comptroller of the Currency over concerns of money laundering and funding for terrorist organisations.

Although major US banks stopped wiring money to Somalia years ago, California-based Merchant Bank continued doing so until recently when it decided to end the service to avoid potential penalties by regulatory agencies.

A group of US Congress leaders in February protested the end of the remittances and demanded a meeting with the US government to develop a possible emergency plan to address the acute shortage of lifesaving money transmission services to Somalia, and discuss how we can move toward a sustainable, longer-term framework for facilitating lawful money transfers through transparent channels.

“Decreasing remittances will exacerbate Somalia’s humanitarian situation. Twenty-two aid organisations recently noted that about one-third of Somali families say they would not be able to afford basic food, medicines and school fees without help from their relatives abroad,” the Congressional team said in a letter on February 7 following the termination of remittance services to Somalia by Merchant Bank.

The bank handled an estimated 80 per cent of the remittances from the US to Somalia.

“Nearly all business startups in Somalia are funded by remittances, and with nearly three million Somalis already dependent on aid organisations, eliminating the ability to send money into Somalia could throw the country and its already vulnerable economy deeper into crisis,” the Congress leaders added.

The end of bank money transfers, the only legal means for Somalis in the US to send money to needy families back home, has rattled many. More than 40 per cent of Somalis receive remittances, the bulk of which are used for basic needs, including food, clothes, medicine and education, according to a UN survey.

The ongoing feuds in Somalia between rival factions has ensured high rates of migration over the past two decades, leaving more than 600,000 migrants scattered all over the world.

In Kenya alone, there are an estimated 500 Somali refugees. Security agencies have regularly accused some of the Somali refugees for habouring suspected members of the Al-Shaabab group.

On Monday a group of leaders from the northeastern region demanded the closure of the Dadaab refugee camp shut down as part of efforts to tame the Al-Shabaab menace.

The leaders who included Garissa Township MP and National Assembly Majority Leader Aden Duale claimed the camps were being used to plan attacks against Kenya.

“The camps have been the centres where the training, coordination and the assembly of terror networks is done. We want the refugees to be relocated, across the border,” they said in a joint statement.

“They come from Somalia and the people of Kenya need to be protected. They can go across the border. UNHCR (the UN Refugees Agency) can still facilitate. They have been with us for the last 20 years. I think time has come when the national security of our people becomes paramount than the international obligations that we have,” they added in the statement read by Mr Duale.

– Business Daily