Central Bank registers all Somali remittance agents
DUBAI - The UAE Central Bank has completed the formal registration of all Somali remittance and clearing houses operating in the UAE to regulate money transactions and remittances flowing to Somalia from here, according to a senior UNDP official.
The UAE Central Bank has been cooperative and supportive to the United Nation Development Programme initiative to ensure that the flow of money to Somalia remains open.
In an exclusive interview with Khaleej Times, Abdulsalam Omer, Programme Manager for Governance and Financial Services of the United Nation Development Programme (UNDP), said: "According to our assessment, the UAE Central Bank has been the world's best financial regulator that treated Somali remittances in a prudent manner that allows fund transfers but through formal channels. Somali financial remittance houses are now operating in accordance with the host country's regulations following the registration processes. The amount remitted via UAE is estimated between 50-70 million yearly."
Asked about the purpose of the UNDP representatives to the UAE, Omer said: "In fact we are here to closely work with the Somali financial houses and the UAE monetary authorities to ensure that these operators and money changers are complying with anti-money laundering laws at global and host country levels."
"Somali financial houses operating in the UAE have given full cooperation to the UAE Central Bank by adopting the new laws on hawala, and also showed interest in UNDP training courses organised to raise awareness and educate the attendees about the documentation they need to do to practice their trade," he said.
"UNDP officials have found that the UAE financial authorities. particularly the Central Bank, and Somali clearing houses are working together to curb money laundering. This has encouraged us to take the initiative to train the staff to comply with the latest regulations," said Omer.
He said:" Remittances are critical in meeting the immense humanitarian needs of the Somali people, therefore it is crucial to urgently resolve the matter to avert a catastrophe. It has been found by the UNDP that more than two million Somalis directly benefit from the remittance services to meet their daily needs which make up about 22.5 per cent of the total income of the Somali people."
The UAE's monetary authorities have been taking a series of strong measures to counter dirty money and they have successfully managed to do so, confirmed Omer. The total amount of remittances from overseas Somalis is between $800 million to $1 billion worldwide out of which around 50-70 million is remitted from UAE.
"The collapse of the central government in Somalia in 1991 has resulted in a lot of chaos in the financial systems of that country. There are no formal regulated financial channels that Somalis overseas can use to remit money to their families," added Omer. "The main objective and the role of the UNDP is to identify the problem and then start addressing them in the right way. I guess we have done a relatively good job, yet there is a long way to go," explained Omer.
The UNDP has recently launched its remittance initiative with the publication of 'A report on Supporting Systems and Procedures for Effective Regulation and Monitoring of Somali Remittance Companies-Hawala.'
Dubai-based Mohammed Djirdeh Houssein, CEO and partner of Sahan Commercial Broker LLC, said: "Our business is now doing better than in the past, thanks to the UAE Central Bank which has shown great understanding of the needs of the people in Somalia. Dubai is a major trade partner of Somalia and that most of the consumer products move from here to Somalia, hence the remittances from overseas help in financing trade."
All the clearing houses in UAE have according to the new rules appointed compliance officers to coordinate with the central bank and also organise internal training. Hassan Moalim Omar, chairman of the Somali Financial Services Association, said: "The UAE authorities have over the past two years initiated appropriate measures against money laundering. This has increased international confidence in the UAE's business environment, added Moalim. On the other side, the measures put in place have also helped us to operate in a secure environment without any worries and have also helped us to build confidence and linkages with the international financial institutions worldwide. We shall be very close to the UAE's monetary authorities and shall abide by all their rules and regulations."