Minnesota hawalas under siege

Hawala protest

Many innocents get squashed by the elephantine steps taken in the never-ending war on terrorism. Some showed up outside the Wells Fargo bank at 2600 E. Franklin today, protesting the closing of hawala accounts, which means they are left with no way to send money back to hungry families in Somalia.

Hawalas are the money transfer system used by Minnesota’s Somali immigrant community to send money home (see below.) Somalia has no functioning banking system (and a barely-there government.) The informal money exchange system is the only way that people can support their families. Hussein Samatar wrote in an op/ed in the Star Tribune:

What Somali-Minnesotans cannot understand is why they have to take the brunt impact from the Patriot Act’s expansion of the Secretary of the Treasury’s authority to regulate financial transactions (signed on Oct. 26, 2001, by President George W. Bush and recently given a four-year extension by President Obama).

Somali-Minnesotans are Americans, and are law-abiding members of the community. Therefore, it is their right to conduct their banking business without the addition of these great difficulties.

How do hawalas work?According to Wikipedia:

“A customer approaches a hawala broker in one city and gives a sum of money to be transferred to a recipient in another, usually foreign, city. The hawala broker calls another hawala broker in the recipient’s city, gives disposition instructions of the funds (usually minus a small commission), and promises to settle the debt at a later date.

“The unique feature of the system is that no promissory instruments are exchanged between the hawala brokers; the transaction takes place entirely on the honor system. As the system does not depend on the legal enforceability of claims, it can operate even in the absence of a legal and juridical environment. Trust and extensive use of connections, such as family relations and regional affiliations, are the components that distinguish it from other remittance systems.”

The TC Daily Planet will have more coverage of the local hawala situation early next week, in an article by Lolla Mohammed Nur.

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January 5, 2012 · 11:05 pm

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