[Or are we calling them Somals now? :o) ]
Financial Times, Nov 9, 2001
TERRORIST FINANCE: Closing down bank 'will hit Somalis'
By EDWARD ALDEN, ROBERT SHRIMSLEY and MARK TURNER
Aid agencies and economists in Somalia have warned that the US decision to close Barakat, the country's largest remittance company, could push the country, already reeling from civil war and famine, into the hands of extremists.
The US and its allies this week began shutting down the company's operations, saying it had skimmed off tens of millions of dollars to fund the terrorist operations of Osama bin Laden's al-Qaeda network.
US officials said the Dubai company's chairman, Ahmed Nur Ali Jim'ale, was a close bin Laden associate. But to many ordinary Somalis, living in a country without formal banks, Barakat - a business that encompasses financial services, telecoms and construction - is the only way to access money from their relatives abroad. Remittances are the country's largest source of foreign exchange, estimated at Dollars 500m a year, and dwarf foreign aid flows. The transfers are highly efficient and attract fees of up to 6 per cent.
The impact of closing Barakat on Somali citizens underscores the dilemmas of the US war on terrorism. Much as Afghani civilians have become victims of the war between the US and al-Qaeda, the effort to crack down on terrorist financing is likely to produce many unintended victims.
Even before this week's announcement, international attention on Somalia's remittance banks after September 11 had caused money transfers to decline by as much as 50 per cent in some areas, and the United Nations, which also uses the banks, raised concerns last month.
"In the region we work, 50 per cent of people are completely dependent on these funds," warned Elkhidir Daloum, Save the Children's Somalia programme manager.
"If people are not transferring money, matters could get drastically worse."
While other Somali remittance operators could help bridge the gap, such as Dahab-Shil and Amal Express, their operations are also likely to be affected.
Somalia's economy has already suffered severely over the past year from bad weather, border closures and a ban on livestock exports to the Gulf.
Mr Daloum and others fear that Somalis, many of whom condemned the September 11 attacks in the US, might be driven into the hands of extremists.
Roland Marchal, from the Paris-based Centre d'Etudes et de Recherches Internationales, said: "If the US wants to marginalise the fundamentalists and get support from the Somalis, they are acting once again in the wrong way," he said. "The US focus on Barakat has had two major effects. Somalis in the diaspora are very reluctant to send money since they could be targeted, and the agents are stopping operating at a time when fresh money is needed more than ever.
"It is easy to see demonstrations in the coming week in Mogadishu: fundamentalists will use that to get social support, and secular or open-minded Muslims will be easy targets for them."
While acknowledging that Barakat is used for both legitimate and illegitimate purposes, US Treasury officials believe the economic impact on remittances to Somalia will be limited.
"There are alternative remittance systems to Somalia," said one official. "Moneygram has an office in Mogadishu. Western Union operates on the borders. There are plenty of opportunities to find alternative remittance systems which will ensure there will be no adverse collateral consequences to families in Somalia."
Yusuf Jumale, Barakat's vice-chairman, said he was "dismayed and really shocked" at the US action - and denied any link with al-Qaeda or Mr bin Laden.
"The first time we heard of this man was when the Americans bombed him in Afghanistan," he said. "We are surprised the American government listened to the propaganda put out by our enemies."
No US authority had asked the organisation anything, said Mr Jumale, reiterating the bank's willingness to open its books to any authorities. "Our lawyers even called the State Department recently and asked if there were any problems - they said no."
But a US Treasury official yesterday reiterated that "we are confident in the intelligence information we have".
The US had begun tracking the operations of Barakat as far back as 1999, suspecting links to al-Qaeda financing, according to former US officials.
In criminal charges laid on Wednesday against the president and treasurer of Barakat's North American operations, US customs officials alleged that the company was operating an illegal wire transfer business and appeared to have structured the transactions to avoid detection by US law enforcement.
UK offer to co-ordinate intelligence
Gordon Brown, the UK chancellorof the exchequer, has offered London as an international clearing house for all intelligence on terrorist finances, writes Robert Shrimsley.
He has told Paul O'Neill, the US Treasury secretary, Britain's National Criminal Intelligence Service could collate and distribute information on possible terrorist money laundering. "It will be necessary to build up an international database on this so we can take effective action against all groups involved in terrorist action," Mr Brown said.
He plans to use next week's meeting of the IMF's international monetary and financial committee to ask all member countries to ratify in their domestic laws, the eight principles governing surveillance and seizures of suspicious transactions.
Copyright: The Financial Times Limited