Serving the UMN community since 1900

The Minnesota Daily

Serving the UMN community since 1900

The Minnesota Daily

Serving the UMN community since 1900

The Minnesota Daily

Daily Email Edition

Get MN Daily NEWS delivered to your inbox Monday through Friday!

SUBSCRIBE NOW

By demonizing pleasure, we set ourselves up for unfulfilling sex lives.
Opinion: Let’s talk about sex
Published March 27, 2024

Money transfer law harms Somalis

The greatest collateral damage of the war on terrorism might not come from a bomb. Instead, it might come from an apparently benign law right here in Minnesota. Collateral damage is the political euphemism for innocent civilian death and in this case it might soon apply to some 700,000 Somalis.

A law enacted Nov. 9 will require businesses that transmit money to obtain a license from the state by Jan. 1, 2002. In jeopardy are the small wire transfer services that use the hawalad network to send money into Somalia. The hawalad is an informal banking network and is the only way to transfer funds into Somalia – whose banking system collapsed following the 1991 civil war, according to the United Nations.

The law requires applicants to pay a $4,000 application fee and provide a surety bond ranging from $50,000 to $250,000, depending on the company’s size. Also, the business must have a net worth ranging from $100,000 to $500,000 and be on “good standing” with the state to be eligible for a license. Somalis living in Minnesota send millions of dollars in relief into their home country, but the businesses that send the money only charge a few dollars per transaction and might not be able to afford or meet the state’s monetary requirements. Without the hawalad network, tens of thousands of Somalis would be unable to send much-needed money. Even if all the businesses are able to stay open, the law will surely increase their costs, a price that will be passed onto money senders and, in the end, the starving people of Somalia.

Minnesota passed the law to protect against money laundering, Department of Commerce spokesman Bruce Gordon said. On Nov. 7, the Justice Department raided two money transfer businesses in Minneapolis that were affiliated with Al-Bakkaratt, an organization suspected of laundering money to al-Qaida. Gordon said this was the impetus behind the law.

“There has been quite a bit of attention regarding this practice in light of the federal investigations,” Gordon said.

Stopping money headed for terrorists is of undeniable importance. However, putting undue restrictions, or even worse, shutting these services down will lead to hundreds of thousands of deaths. In November the United Nations released a report warning 700,000 Somalis were on the brink of starvation, a problem stemming in part from “a reduction in crucial financial remittances from Somalis overseas that traditionally help Somalis at home to overcome difficult times.” Minneapolis is home to the largest population of Somali refugees in the United States and shutting down their only method of sending money into Somalia would greatly exacerbate the problem.

The state of Minnesota holds a proverbial bomb over Somalia’s head. Let us hope they don’t drop it.

Leave a Comment

Accessibility Toolbar

Comments (0)

All The Minnesota Daily Picks Reader Picks Sort: Newest

Your email address will not be published. Required fields are marked *