Matthew Offord – 2015 Parliamentary Question to the HM Treasury

The below Parliamentary question was asked by Matthew Offord on 2015-09-16.

To ask Mr Chancellor of the Exchequer, what steps his Department is taking to ensure remittances flow through secure and accessible channels to Somalia.

Harriett Baldwin

The Treasury has worked closely with industry and regulators to ensure that remittances continue to flow from the UK to Somalia.

The Treasury plays a leading role in the Action Group on Cross-Border Remittances, which brings together participants from industry, Government, regulators and international partners to maintain a continued dialogue on the withdrawal of banking services from the money service business sector, in order to develop a shared understanding of the expectations of all parties and help support remittance flows.

Over the past two years, the Action Group has overseen a number of initiatives to boost compliance in the Money Service Business (MSB) sector, and to give greater confidence to banks offering services to this sector:

• The group has worked closely with the supervisors to develop revised guidance for the MSB sector, and for those offering banking services to the sector, including a statement from the Financial Conduct Authority (FCA) in April 2015 clarifying the FCA’s expectations with regards to Banks’ management of money-laundering risk.

• The National Crime Agency has worked collaboratively with the banking and MSB sectors to improve understanding and manage risk.

• Her Majesty’s Revenue and Customs (HMRC), the supervisor of MSBs, more than doubled the number of compliance visits to MSBs in 2014, and launched an e-learning product to improve MSBs’ understanding of their obligations under the Money Laundering Regulations.

  Alongside this work in the UK, the Government is also supporting targeted capacity building in Somalia, delivered through the World Bank. This includes a specific focus on improving regulation of the Somali remittance sector and supporting the drafting and introduction of necessary financial crime legislation. This goes hand-in-hand with our longer term programme to support the formalisation of the financial sector in Somalia.

  These actions both in the UK and Somalia are intended to safeguard the vital remittances that flow between the two countries. The Action Group continues to monitor UK-Somalia remittance corridor closely and is reassured that there is currently no evidence to date of an interruption in the flow of remittances between the UK and Somalia, or any significant increase in remittance costs. This is a resilient and responsive market and the Government remains committed to supporting it and the diaspora communities that rely on these services.

  Updates on the work of the Action Group can be found on the gov.uk website:

  https://www.gov.uk/government/groups/action-group-on-cross-border-remittances