“MSBs a High Risk for Banks” FCO claims


UK Gov. cannot interfere Barclay’s decision to stop money remittances leaked document revealsBarclays bank

Somalilandsun – In a recently leaked document the FCO has written that Money Service Business- MSBs are a high risk sector for banks with the UK Government estimating that £1.5 bn is laundered through MSBs every year.

Within that sector, Somalia in particular is a high risk corridor owing to the absence of any formal financial sector and state regulation in the country, which makes it extremely difficult to know who the recipient of the money is.

In line with global standards and EU requirements, Parliament has placed risk-based requirements on how UK banks and MSBs operate. In particular banks must have systems and controls in place to know their customer and adequately protect themselves from money laundering and terrorist financing. It is an operational and commercial decision for each bank how it implements the regulations and ensures it is compliant.

Barclays’ decision is ultimately a private commercial matter. There would be legal and reputational risks to the Government if it were to interfere with that decision, particularly given that Barclays has cited regulatory concerns in explaining its decision. Similarly, the Government would not be able to intervene on behalf of a particular company or even a particular region or ‘remittance corridor,’ since a number of companies and countries are affected. “

Read the full document : Leaked Doc about remittances – Medeshi