Somalia has appealed the decision by Sunrise Community Banks to end the remittances program from Minnesota, the state that is home to the largest Somali-American community in the United States. US-based Somalis send about $100 million back home each year, according to the US Treasury.
The move to shut down the service came two months after two Somali-American women from Rochester, Minnesota, were convicted of raising money for a l Shabab rebels, Al-Qaeda-linked militants who control parts of the Horn of Africa country.
Sunrise has said it is looking for alternate arrangements to send remittances , but would end the service it was providing on Friday over fears that it would risk violating US regulatory and anti-terrorism financing laws. It said the decision to end the service was unrelated to the trial of the two women.
The Somali American Money Services Association said the businesses complied with state and federal laws and believed they were being singled out and denied vital banking services.
“Remittance is an essential lifeline for the Somali people, and it is the only source of funding that sustains the livelihood of millions of Somalis, mostly women and children,” the association said in a statement.
The association said services would resume once a solution could be found.
The end-of-year deadline had sparked appeals by the Somali community in Minnesota, the Somali government, US lawmakers and relief groups to find an alternative to the services.
The Somali government has said an estimated $2 billion — one-third of the country’s gross domestic product — is channeled to Somalia through “hawala” or small money transfer businesses.
US banks have been closing such services over the past several years, leaving few alternatives to send money to Somalia, which has no formal banking system. Advocates said the Sunrise shutdown would force Somali-Americans to use less secure and less documented routes.
The association said a rally was planned for Friday afternoon in Minneapolis to protest the end of the services.
Democratic US Representative Keith Ellison of Minneapolis appealed to President Barack Obama earlier in December to find a way to continue the remittances, citing the “catastrophic humanitarian situation in Somalia.”
Sunrise said it recognized the potential impact from the end of the wire transfer services.
“We continue to work tirelessly with the community and government officials to create a temporary legal and regulatory solution that would allow the bank to extend the account closure date,” Sunrise said in a statement.
On Wednesday, the Somali Mission to the United Nations appealed to the Sunrise CEO to extend the Friday deadline, which was previously extended from Dec. 15.
Sunrise said the challenges of providing aid and services to Somalia were not new and that the US government had found ways to remove legal obstacles temporarily for aid groups providing food to famine victims.
“The bank remains hopeful that the government would be willing to consider a similar solution in this instance,” Sunrise said. “Until that solution is found, the bank must continue to comply with all US laws and banking regulations.”
