Mo Farah joins campaign for Barclays to keep cash transfers
- 7 August 2013
- From the section Business
Campaigners pressing Barclays to keep open cash transfer businesses to poorer countries have presented a petition to Downing Street signed by 25,500 people, including Olympic gold winner Mo Farah.
Barclays says it cannot police all such businesses effectively and they could be used for money laundering.
Protestors say they are a lifeline for people in countries where there is not a proper banking system.
Farah came to the UK at the age of eight from war torn Mogadishu.
Businesses, including banks, pull out of countries like Somalia where war has disrupted normal life, leaving people reliant on smaller, less formal monetary systems for cash payments from relatives who live outside the country.
Double Olympic gold medallist Farah has been urging his 800,000-plus Twitter followers to support "vital" money flows to families in Somalia.
He said: "It is so important that the government and the banks realise the incredibly serious threat this poses, and work with the remittance industry to find a solution.
"Millions of Somalis as well as people across the developing world depend on it."
Farah Hassan, one of the demonstrators, said without the money transfer companies, every aspect of his family's life would suffer: "There are no banking systems so that you can transfer money from one bank to the other. There is absolutely no other way other than the money transfer companies.
"It will affect my family because whether it's education, food, everyday living - if that money is not there, then clearly they won't be able to eat, they won't be able to educate themselves, they won't be able to do anything, so it's just allowing somebody to die."
Barclays is the last major UK bank that still provides such money transfer services to Somalia, which has an estimated 1.5 million of its nationals living overseas.
A recent United Nations study found that more than 40% of the Somali population received remittances.
The companies having their Barclays accounts in the UK closed have branches in countries as diverse as Bangladesh, South Africa and Romania.
There is no suggestion that all the businesses whose accounts Barclays plans to close are transferring money from illicit sources. Many of those on the list are thought to have found other bank account providers, and Barclays has not closed every such account.
It has granted a few companies, including some Somali ones, an extension until September.
But there are fears that if a lasting solution is not found it is likely that the system will be driven underground.
Dahabshiil, the largest such business providing services to Somalia, has said Barclays' decision could see money transfers pushed into the hands of "unregulated and illegal providers".
Barclays has said in a statement that it was fear of illicit activity under the current system that was leading it to pull out of the sector: "Whilst Barclays makes no comment on specific companies, it is recognised that some money service businesses don't have the necessary checks in place to spot criminal activity with the degree of confidence required by the regulatory environment under which Barclays operates."
Money laundering is illegal and can go on unnoticed. There are hefty fines when such activity is uncovered.
Barclays' rival HSBC last year agreed to pay US authorities $1.9bn (£1.2bn) in settlement over accusations that it allowed the laundering of billions of dollars of cash from drug barons and rogue states through its international branches.
The Labour MP, Rushanara Ali, delivered the petition to the prime minister's residence, saying it was vital the government acted: "What we cannot have is the government burying its head in the sand because that is too dangerous for developing countries, and also for people who want to get help to some of the poorest people in the world.
"This is about communities helping each other. It's about taking the pressure off the British taxpayer. That's why it's so important."
The government said the Economic Secretary Sajid Javid had held meetings with the major High Street banks, the British Bankers Association, representatives of money service businesses, as well as financial regulators, to discuss the provision of remittance services.
A spokesman described the meeting as "very constructive".
"The Department for International Development is also urgently reviewing the impact of changes on the UK remittance sector to developing countries and examining what can be done to support those affected and will take forward issues from the meeting to their roundtable in September," the spokesperson said.