State Department downplays Somali refugee concerns about new banking restrictions

I’ve been meaning to at least report on the latest round of angst over restrictions on sending American money from the Somali ‘community’ here to Somalia.  Of course the banks are worried that the dollars (that probably came through various US welfare programs) will end up in the hands of terrorists.

State Department Spokeswoman Psaki (of the beaded necklaces): no big deal that they can’t send cash to Somalia.

So, here is a report from Foreign Policy summing up where things stand now.  As expected, Rep. Keith Ellison is going to bat for his Minnesota Somali constituents.

Remember readers that the remittance practice is a big deal and is an important driver for migrants of all sorts to get here—those Central American governments, happy to see their ‘children’ go to America, are driven by the desire for the cold hard cash that the migrants send home.  The cash thus leaves the US economy.

Foreign Policy:

Many companies that send money from immigrants in the United States to friends and family in Somalia shut down this week, but the State Department doesn’t see any need for an emergency response.

State spokeswoman Jen Psaki downplayed the impact that a cutoff of remittances could have on millions of Somalis who the U.N. says depend on the money for basic survival. It would be a “stretch,” Psaki said Wednesday, to connect remittances to economic opportunity in Somalia.

Psaki said the U.S. government had “engaged in ongoing communication with the Somali community in the United States and financial institutions serving that community” in an effort to effectively regulate remittances and keep them from financing terrorism.

At issue is the fallout from a decision by the main bank facilitating international wire transfers to Somalia to close the accounts used to hold and then send the money. Merchants Bank of California, which handled 60 to 80 percent of those funds, closed all Somali accounts on Friday, as Foreign Policy was the first to report. The closure was a result of regulatory pressure on banks to verify where the money is going to make sure it isn’t funding terrorism, which is hard to do in Somalia because the country doesn’t have a central bank or formal banking system.


Oxfam, the humanitarian organization, responded to Psaki’s comment by pointing out that Somalia receives $1.3 billion in remittances every year, which is more than the country gets in aid or foreign investment.

“It is critical that the Department of State recognize the catastrophic consequences that the current disruption in remittances will have in Somalia,” Scott Paul, a senior advisor for Oxfam America, said in an emailed statement.

There is more, see what Rep. Keith Ellison has to say, here.

For the many new readers who joined us yesterday, we have resettled over 100,000 Somali refugees to the US in the last couple of decades, here.  Minneapolis is ground zero because of the refugee contractors operating there which include:  Catholic Charities, Lutheran Social Service, and the evangelicals, World Relief (new name is Arrive Ministries), here.  The original attraction of Minnesota was its generous welfare system.

The US State Department and its contractors brought in 9,000 new Somalis to America in 2014 and are on target for 10,000 this year.  They will be distributed around the country.

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