Somali Australian Council of Victoria president Dr Hussein Haraco.
Wednesday, June 24, 2015
SOME Banyule Somali businesses are on the brink of closing after the last major bank severed ties with Australian money transfer agencies.
Constricting international financial regulations have put the jobs and livelihoods of remittance providers throughout the Australian Somali community in jeopardy with some already closing shop after Westpac closed accounts.
The Heidelberg Leader has previously reported Banyule’s Somali community’s plight to keep the bank accounts open, which allow them to send lifesaving money back to their families in Africa.
Westpac advised remitters at the Bell St Mall it would close the accounts for good in March after a Federal Court hearing in December.
Banks face hefty fines and consequences if money they handle transfers to terrorist organisations or activities and dealing with remittance money was high risk if a financial institution cannot track the cash to its final destination.
Meanwhile the Federal Government formed remittance closure working group could come to an end on June 30.
Somali Remittance Action Group chairman Hussein Haraco said the closure of remittance accounts was impacting traders in Banyule and across Victoria.
Dr Haraco said a money transfer operator at the Bell Street Mall had to close his business.
He said while the bigger banks were not playing ball, smaller institutions were still getting cash through.
Somali Australian Council of Victoria president Dr Hussein Haraco. Picture: Andrew Henshaw
Australian Bankers’ Association chief executive Steven Münchenberg said the issues faced in Australia were the same for banks and remitters globally.
“Obligations under the ever-growing international and domestic anti money laundering, counter-terrorism financing and sanctions regimes have made it extremely costly and risky for both Australian and overseas banks to continue to serve certain high-risk sectors of the population, including the remittance sector,” Mr Münchenberg said.
“The key to any solution is a global approach to address the international restrictions on banks.”
An Attorney General’s Department spokeswoman, who did not want to be named, said the Australian working group was considering practical measures that could bring the remittance industry within the acceptable risks boundaries of banks.