The Economic Secretary to the Treasury, Andrea Leadsom held a meeting with various representatives from the London Somali diaspora community at Acton town hall on Monday 23rd March. The aim of this meeting was to discuss what steps the government could take to ensure the financial sector retains a legitimate channel for the transfer of remittances to Somalia.
The attendees included Angie Bray, local Acton MP and concerned Somali individuals who have been directly affected by the remittance crisis. The different perspectives of the people who use remittances to support their livelihoods by sending money back to friends and family in Somalia coupled with government representatives ensured a holistic and fruitful dialogue.
The discussion was led by Mohamed Ibrahim, the Chair of the London Somali Youth Forum, and Adam Matan, the Director of the Anti-Tribalism Movement. The chairs of the meeting were keen to welcome the ‘international leadership’ the UK is showing on Somali remittances and supported further work with regulators to ensure that banks can take a proportionate approach to risk rather than an end service-provision all together approach.
The Economic Secretary to the Treasury, Andrea Leadsom, said: “It has been vital to hear the experiences of this issue from the London Somali community first-hand, as remittances play a key role in supporting developing countries. The government is committed to ensuring that UK customers are able to access the financial services they need to keep remittances flowing, and today’s discussion will help us inform policy-making on this issue going forward.
“The problem of banks withdrawing services is part of a global trend with global causes, affecting people across the world. The UK has been leading international efforts to prioritise work to address this issue, including through the G20 and global Financial Action Task Force. We have also taken substantial action at home to work through the particular challenges faced by money remitters, and we will continue our work to develop a ‘safer payment corridor’ pilot for remittances from the UK to Somalia.”
Director of the Anti-Tribalism Movement, Adam Matan said: “The issue that communities face is that the banks decided to close down the remittance service accounts because there was a fear of terrorism finance and money-laundering but that initial risks may increase due to MSB’s not having regulated banking accounts.
“There must be concern for the Somali people. Before we had big issues with Al-Shabaab and FGM, Khat, and now we have problems with money flowing, which is another element we need to consider. It would be great if we could take a concrete actions to secure this money for people’s livelihoods.”
Ealing Central & Acton MP, Angie Bray, said: “There has been a real problem with UK financial institutions withdrawing peoples’ ability to make remittance payments overseas, which has had a real impact on a number of my constituents. I am really pleased the Minister has been so prepared to come here to Acton to meet those affected and hear their views, and I hope the Treasury will be able to follow through with sensible policies on this issue and continue their work on the safer payment corridor.”
With regards to the decision of some banks to close services to money service businesses (MSBs), the Minister enquired about specific complications the community were not faced with, informing attendees that the government had provided guidance on risk management to both MSBs and banks in order to help maintain confidence in their commercial dealings on remittances.
Problems have risen whereby banks have withdrawn services to MSBs. However a global trend can be seen occurring with banks withdrawing accounts and other banking services to avoid a range of risks associated with international regulation and complication procedures for anti-money-laundering and countering the financing of terrorism (known as ‘de-risking’). The government has repeatedly stated its commitment to ensuring that UK consumers are able to send money safely and securely to their friends and family in developing countries.
Today, the Economic Secretary is continuing her work to support customers affected by de-risking with a cross-sector meeting with MSBs, banks, charities and others, designed to root out common obstacles to service-provision.