Dahabshiil Wins Injunction Against Barclays Bank to Keep Money Flowing to Somalia
By Gianluca Mezzofiore | November 6, 2013 2:33 AM EST
A High Court injunction has over-ruled Barclays Bank's decision to close the account of money transfer agent Dahabshiil - one of 250 remittance agencies the bank wanted to stop providing banking services for over fears that such companies funded terrorists.
The court's ruling means that customers will be able to continue transferring money through the Dahabshiil account.
Barclays announced its decision to close its money service businesses (MSBs) in light of fears that it would "unwittingly be facilitating [...] terrorist financing".
Judge Launcelot Henderson said Barclays' decision was unfair, and said the reasons behind the bank's move to end links with Dahabshill "need to be fully examined".
Henderson's verdict echoes the view of the Overseas Development Institute (ODI), whichdescribed Barclays' decision as "unwarranted, unnecessary and a threat" to people in need.
Around 100,000 Somalis living in the UK use the Dahabshiil service, and the company's chief executive officer Abdirashid Duale previously said the court case was a matter of life and death for these people.
In a statement released after the verdict, Dahabshiil said the ruling was a "victory for the millions of Somalis and other Africans, many of whose livelihoods depend on our services".
"The court handed down its judgment, granting an interim injunction which has the effect of preserving Dahabshiil's banking arrangements with Barclays until the conclusion of a full trial," it said.
Oxfam welcomed the injunction ruling, saying it "provides a small window of opportunity for Somalis living in the UK to send money home to loved ones in one of the poorest countries in the world.
"However, this does not solve the problem - a long-term fix is needed to safeguard hundreds of thousands of people relying on the money for food, medicines and education."
The campaign against the shutdown included Olympic gold winner Mo Farah, who came to the UK at the age of eight from war-torn Mogadishu. The runner urged his 800,000-plus Twitter followers to support "vital" money flows to families in Somalia.
Barclays has long defended its "legitimate decision" to close the Dahabshiil account, claiming it was based on "the well-known risks of money laundering and terrorist financing in the money-service business sector."
"The risk of financial crime is an important regulatory concern and we take our responsibilities in relation to this very seriously," the bank added.
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