___________________________________________________
US State Dept Narcotics Report 2011 (introduction):
Somalia is the world's quintessential failed state. A fragile transitional
federal government controls only portions of the country's capital and
remote pockets of some regions. That government is besieged by a
classic insurgency, led by U.S.-designated foreign terrorist organization,
al-Shabaab. Many ministries exist in name only, or have non-functioning,
mostly unpaid staff. There is no court system to speak of, and policing is
rudimentary. Any laws that do exist are currently unenforceable given
the security threat to the government and its lack of capacity. The
financial system in Somalia operates almost completely outside
government oversight on the black market, or via international money
transfer companies known as hawalas. The USG lead for Somalia, U.S.
Embassy Nairobi’s Somalia Unit, has no credible state partner with which
to engage on drug control issues.
Somalia does not play a major role in the production, trafficking, or
consumption of illicit narcotics or precursor chemicals associated with
the drug trade. Somalia's narcotics financing is centered on the khat
trade. Khat is a leafy plant grown regionally and chewed by Somalis, and
citizens of other regional states in the Horn of Africa and the Arabian
Peninsula, as well as in parts of Asia. It imparts a mild amphetamine-like
high, manifesting in excitement, euphoria, and suppressed appetite.
Although it is a controlled substance in much of the world, khat is legal in
Somalia, and has aspects of a local traditional practice. Khat is grown in
Kenya, Ethiopia, Yemen and Uganda, imported mostly by plane, and
sold throughout Somalia. Most khat proceeds go back to khat
transporters based outside of Somalia in cash or via money transfer
companies. It is highly unlikely that khat money is laundered in Somalia
because khat proceeds are not illegal and opportunities for legal
investment are few given Somalia's weak economy.
There is no information related to drug-related currency transactions
through Somalia's financial institutions (such as they are). To the extent
Somalis are engaged in the drug trade in the United States, some of
those proceeds are probably transferred to Somalia through hawalas in
the form of remittances, however, informed observers speculate that the
amounts are relatively small.
There is virtually no information sharing on narcotics and terrorist
financing with the United States or other developed countries. There are
no joint formal investigations ongoing of which we are aware Somalia
does not officially encourage or sanction drug trafficking, and there is no
evidence that senior officials are engaged in such activities. Somalia is
not a party to the 1988 United Nations Drug Convention.
For Full report, click here
_________________________________________________________
US State Dept Trafficking in Persons Report 2011 (introduction):
(Special Case)
Somalia remains a Special Case for a ninth consecutive year due to the
lack of a viable central government since 1991. Control of its geographic
area is divided among the self-declared independent Republic of
Somaliland, the semi-autonomous region of Puntland, and the remainder
of the country nominally under the control of the Transitional Federal
Government (TFG). Somalia currently lacks a national governing
structure that could assume responsibility for addressing the country’s
human trafficking problem. During the reporting period, fighting
continued between TFG troops, allied militias, and African Union forces
against anti-TFG forces, terrorist groups, and extremist elements. The
TFG remained preoccupied with the task of securing government
representatives and installations from attacks by such elements; in this
perpetual state of insecurity the government was not able to address
human trafficking. In addition, the TFG currently lacks the necessary
means to identify, investigate, and address systemic issues in Somalia,
including those related to forced labor and forced prostitution; its
capacity to address human trafficking will not significantly increase
without tangible progress in re-establishing governance and stability in
Somalia.
Information regarding trafficking in Somalia remains extremely difficult to
obtain or verify; however, the Somali territory is believed to be a source
and transit country for men, women, and children who are subjected to
conditions of forced labor and sex trafficking. As in previous years,
trafficking victims were primarily trafficked within the country, from
Somalia’s south and central regions to the Puntland and Somaliland
regions. Sources note a rise in reported trafficking cases during the
reporting period. Somali women and girls may have been subject to sex
trafficking in Garowe, the Puntland-administered part of Las Anod (Sool
region), and pirate towns such as Eyl and Harardheere. Sources report
a clearer link between piracy and human trafficking during the reporting
period; girls are reportedly taken from coastal regions, particularly
Bossaso, and placed in pirates’ homes to be exploited in domestic and
sexual servitude. Some female brothel owners, who can profit as much
as $50 per client, kept victims in harsh conditions and meted out
physical abuse as a means of compelling victims to work. There was
reportedly an increase in the use of drugs to render victims unconscious
during transport. In Somali society, certain groups are traditionally
viewed as inferior and are marginalized; Somali Bantus and Midgaan are
sometimes kept in servitude by more powerful Somali clan members as
domestic workers, farm laborers, and herders.
Due to an inability to provide care for all family members, some
desperate Somalis willingly surrender custody of their children to people
with whom they share family relations and clan linkages; some of these
children may become victims of forced labor or sex trafficking. While
most child laborers work within their households or family business,
some children may be forced into labor in agriculture, herding livestock,
or in the construction industry.
Human smuggling is widespread in Somalia and evidence suggests that
traffickers utilize the same networks and methods as those used by
smugglers. Men, women, and children in internally displaced persons
(IDP) camps or congregated along coastal areas hoping to be smuggled
to Europe or the Middle East remained particularly vulnerable to
trafficking. There were reports of trafficking offenders preying on young
women and children, mostly IDPs from South and Central Somalia, at
marketplaces and in the streets, falsely promising them lucrative jobs
outside Somalia. Dubious employment agencies facilitate human
trafficking, targeting individuals desiring to migrate to the Gulf states for
employment. Somali women are smuggled, sometimes via Djibouti, to
destinations in the Middle East, including Yemen and Syria, as well as to
Sudan and South Africa, where they are subjected to conditions of
domestic servitude and forced prostitution. Somali men are subjected to
conditions of forced labor as herdsmen and menial workers in the Gulf
states. Somali children are reportedly smuggled to Saudi Arabia through
Yemen for forced begging. Members of the Somali diaspora use fake
offers of marriage to lure unsuspecting victims, many of whom are
relatives, to Europe or the United States, where they are forced into
commercial sexual exploitation. For example, in November 2010, U.S.
authorities indicted 29 Somali gang members for prostituting four girls –
including one 12-year-old – in several U.S. states. Ethiopian women are
smuggled through Somalia to Yemen and onward to other destinations in
the Middle East where they are forced into domestic servitude and
prostitution.
According to the UN, the recruitment and use of children in armed
conflict has been increasing over the past two years; although the exact
figure is unknown, UN sources estimate that there are several hundred
children in the forces of the TFG or its associated militias, and several
thousand among the insurgent groups. Youth under the age of 18
continued to be recruited, including by force and deception, for direct
participation in hostilities in central and southern Somalia. During the
reporting period, extremist groups al-Shabaab and Hisbul Islam merged
and jointly used systematic force and deception to target vulnerable
children, sometimes as young as eight years old, for membership in their
militias. These forces reportedly increased recruitment at schools and
other educational facilities during the reporting period; al-Shabaab
threatened to punish teachers and parents who refused to send their
children to the training camps. The groups used children to plant
roadside bombs and other explosive devices in addition to carrying out
assassinations, portering, and domestic servitude. In Kismayo, Baidoa,
and Merka, al-Shabaab obligated all boys 15 years of age and older to
fight or face death; in November, al-Shabaab executed two children in
Hurwaa District of Banadir region. Al-Shabaab also continued to forcibly
recruit young girls who were then “married” to its militia leaders and used
for sexual servitude, logistical support, and intelligence gathering. While
the TFG’s military reportedly improved its recruitment practices to
prevent conscription of child soldiers into government ranks, UN sources
reported that the TFG and its allied militias continued to unlawfully use
children throughout the reporting period in their fighting forces. Without
established birth registration systems, it remained difficult to determine
the exact age of persons conscripted into armed groups.
The respective authorities operating in Somalia’s three regions made
few concrete efforts to address human trafficking during the reporting
period; there was generally a lack of anti-trafficking efforts on all fronts –
prosecution, protection, and prevention – in all regions of Somalia. There
is a severe lack of capacity in every part of the country to adequately
address the problem. Understanding of human trafficking and how to
identify and address it remained low among government officials and the
general population. TFG officials recognized trafficking as a problem, but
acknowledged that it is not a priority.
None of the three regions have laws that specifically prohibit human
trafficking, though the pre-1991 penal code outlaws forced and
compulsory labor and local laws prohibit forced labor, involuntary
servitude, and slavery in Somaliland. In December 2010, the Puntland
Parliament enacted provisions prohibiting and punishing offenses under
Islamic law when smugglers cause the death of smuggled or trafficked
persons, prescribing punishments of between one and five years’
imprisonment. However, there is neither a unified police force in the
territory to enforce these laws, nor any authoritative legal system
through which trafficking offenders could be prosecuted. There were no
known prosecutions or convictions of human trafficking offenses,
including by traditional or Shari’a courts, during the reporting period.
Despite the existence of laws protecting children from conditions of
forced labor, authorities did not enforce these against child traffickers.
The government did not provide anti-trafficking training for government
officials and made no known efforts to investigate, prosecute, or punish
government officials involved in trafficking offenses.
The government did not provide any protection services to victims of
trafficking. The International Organization for Migration (IOM) and local
organizations began providing rented houses and reintegration services
to rescued trafficking victims in Bossaso, Puntland. These facilities were
dedicated to trafficking victims and accessible to male and female Somali
and foreign victims. These organizations also placed child victims with
families for care. During the reporting period, IOM and its local partners
provided medical and psychological assistance, food, clothes, vocational
training, and seed money for establishing small businesses to 10 victims
of trafficking – eight in Puntland and two in Somaliland. IOM reported that
clan elders brought a total of 50 suspected trafficking victims in
Somaliland and Puntland to its attention. The government did not
provide financial or in-kind assistance to these organizations.
Government authorities did not utilize formal procedures to identify and
protect victims of trafficking or refer them to available protection
services. The government also did not provide assistance to any Somali
nationals who were repatriated as victims of trafficking.
During the reporting period, there were no reports of formal conscription
or forced recruitment of persons under the age of 18 into the TFG,
Somaliland, or Puntland armed forces. During a November 2010 visit by
the UN Special Representative of the Secretary General on Children and
Armed Conflict, the TFG prime minister promised to investigate all
reports of child soldiers, some of who may be trafficking victims, in the
TFG army and, if found, to demobilize them. Also in December, the TFG
named a Focal Point for Human Rights and Children with responsibility
for addressing child soldier issues. Throughout the reporting period, the
TFG also continued to improve its recruitment practices and participate
in formal troop training to stop child soldier recruitment, including
conscription. New recruits, trained in Uganda and Djibouti, were
thoroughly vetted, and child soldiers were removed from the new units
upon return to the country. However, there are reports that the TFG and
allied forces continued to use a small number of children in armed
service, some of whom may have been involuntary conscripts.
The government made no known efforts to prevent trafficking in persons.
During the reporting period, the government did not conduct anti-
trafficking information or education campaigns or make any discernible
efforts to reduce the demand for commercial sex acts. Neither Somali
national nor regional authorities implemented any programs to address
forced child labor or provided assistance to non-governmental
organizations to do so. Somalia is not a party to the 2000 UN TIP
Protocol.
For full report click here
_________________________________________________________
US State Dept Terrorism Report 2010
Overview: Somalia’s Transitional Federal Government (TFG) continued
to have a fragile hold on power and exerted control over only a small
portion of the capital of Mogadishu. This, together with Somalia’s
protracted state of violent instability, long unguarded coasts, and porous
borders, made the country an appealing location for terrorists seeking a
transit or launching point for operations there or elsewhere. The
capability of the TFG and other Somali local and regional authorities to
carry out counterterrorism activities or develop a counterterrorism
agenda was extremely limited. Clan dynamics remained an influential
factor in governance and security issues.
The terrorist and insurgent group al-Shabaab and other anti-TFG clan-
based militias continued to exercise control over strategic locations in
central Somalia. The TFG and peacekeepers of the African Union
Mission in Somalia (AMISOM) remained confined to parts of Mogadishu
such as the main seaport, airport, and neighborhoods near Villa
Somalia. Al-Shabaab's continued destabilizing influence gave the group
and allied violent extremists a safe haven to train and plan terrorist
activities.
Several senior al-Shabaab leaders have publicly proclaimed loyalty to al-
Qa‘ida (AQ). In some terrorist training camps, AQ-affiliated foreign
fighters led the training and indoctrination of the recruits. Al-Shabaab
conducted suicide attacks, remote-controlled roadside bombings,
kidnappings, and assassinations of government officials, journalists,
humanitarian workers, and civil society leaders throughout Somalia. Al-
Shabaab also threatened UN and other foreign aid agencies and their
staff, resulting in the withdrawal of significant humanitarian operations,
including that of the World Food Program (WFP) from southern Somalia
in January 2010.
Al-Shabaab's influence in Somaliland and Puntland, though on a much
smaller scale than in southern Somalia, remained a concern to local and
regional authorities.
2010 Terrorist Incidents:
Puntland: An estimated 50 government officials, security officers, and
leading elders were killed in terrorist-related attacks in Puntland. A clan
militia led by Siad Atom, connected to al-Shabaab, in the mountainous
Sanag region, was believed to be behind these attacks. From July to
November, Puntland forces launched military operations against Atom
and his allied clan fighters. Puntland's president announced the end of
the operation in November although the ability of Atom to continue future
attacks remained viable and strong.
Somaliland: Attacks and government responses included the following:
* On June 10, Somaliland police clashed with a heavily armed
unidentified group with likely links to terrorists in Burao's eastern
neighborhood. A police officer was killed, and Eastern Burao's police
commander and Togdheer's regional police commander were reportedly
wounded in the clashes. Police arrested five people and impounded
three sacks of explosive powder and weapons. On November 15, a
Berbera court sentenced one of the arrestees, Ahmed Ibrahim Farah, to
death by hanging after he pled guilty to terrorism charges. The court
delivered death sentences to three other accomplices, two men and a
woman, who were tried in absentia. The court also sentenced three
women to serve a one-year jail term each for their role in the terrorist
raid while two other women were set free due to lack of evidence.
* On January 28, a remote control explosion targeting Farah Askar
Hussein, Governor of the Sool region, killed one of his staff and
wounded Hussein and his driver. The explosion occurred at the front
gate of his Las Anod residence during the visit of eight Somaliland
ministers. Somaliland police have not made any arrests related to this
incident.
Mogadishu/South and Central region: During 2010, al-Shabaab carried
out multiple attacks, including a number in Mogadishu against the TFG
and African Union Mission in Somalia. Among the most deadly were a
series of attacks in March, which killed at least 60 people and wounded
160 more; and a string of attacks in late August, which killed at least 87
people and wounded 148. Also in August, al-Shabaab suicide bombers
entered the Muna Hotel in Mogadishu and killed 31 people, including six
members of parliament and four other government officials, when they
detonated their explosives on the roof of the hotel. Attacks and
government responses included the following:
* On May 1, twin explosions inside a packed mosque in the Bakara
market of Mogadishu killed 45 worshippers and left an estimated 100
others injured, including top al-Shabaab militants. A similar mosque
attack on May 2 in Kismayu killed two and injured 13 people after
congregational prayers.
* On August 24, two al-Shabaab gunmen disguised in TFG military
uniforms made a forced entry into Hotel Muna in Mogadishu's
Hamarweyne district and killed 31 of the guests, including members of
parliament and other government officials. The two attackers, according
to TFG official sources, went on a shooting spree while inside the hotel
before one of them blew himself up with a suicide vest.
* On September 9, AMISOM peacekeepers disrupted an al-Shabaab
attack on the Mogadishu airport. After attackers detonated twin suicide
truck bombs near the airport, AMISOM reportedly shot five more bomb-
strapped al-Shabaab militia members as they tried to sneak into the
airport during the resulting mayhem. Four civilians and three
peacekeepers were killed in the attack.
* On November 10, al-Shabaab militia beheaded four people in
Galgaduud for their suspected association with Ahlu Sunna Wal Jama'a
(ASWJ), a moderate Islamic organization that oftentimes fights against al-
Shabaab and has links, albeit weak, with the TFG.
Legislation and Law Enforcement: Somalia's Transitional Federal
Government in Mogadishu, under siege by insurgents, called on regional
governments to help stem the flow of terrorist financing, requesting local
governments trace, freeze, and seize al-Shabaab financing. On May 3,
the TFG passed a counterterrorism law, and in July, Puntland followed
with similar legislation establishing special courts to try terrorism
suspects. Somaliland has not passed any such laws, though its court
system has been able to hand out death sentences to al-Shabaab and
other extremists for crimes committed.
Countering Terrorist Finance: Somalia was a terrorist financing center.
Existing anti-money laundering and counterterrorist finance laws were
unenforceable, given the security threat to the government and its lack
of capacity. The financial system in Somalia operated almost completely
outside of government oversight either on the black market or via
international money transfer entities known as hawalas. Financial entities
in Somalia self-imposed international standards, to the extent they exist,
in order to do business elsewhere in the world.
Al-Shabaab derived most of its funding internally, particularly from
control over the key port of Kismaayo and taxation of goods and
legitimate commerce. Some of the external financing entered Somalia as
cash, but most likely arrived through hawalas. Al-Shabaab also financed
its operations through extortion of private citizens and local businesses,
revenue from air and seaports under their control, and to an unknown
extent by diversion of humanitarian and development assistance. The
TFG, Puntland, and Somaliland regional administrations were unable to
control transit across their borders, and goods flowed into and out of
Somalia without government knowledge. In areas controlled by al-
Shabaab, the group "taxed" goods' movements.
The TFG did not have an independent system or mechanism for freezing
terrorist assets. No government entities were charged with, or capable of
tracking, seizing, or freezing illegal assets. In theory, the Treasury
Ministry would be responsible for investigating financial crimes, but it
lacked the capacity, including financial, technical, and human resources.
U.S. Embassy personnel in Kenya were aware of the interdiction of one
suspected terrorist financier carrying cash illegally into Somalia.
Interdictions of these sorts by TFG officials result in an arrest, and then
indefinite detentions or releases given Somalia's inadequate judicial
system.
There was no mechanism for distributing information from the TFG to
financial institutions, and the TFG enforced no suspicious transactions
or large currency transactions reporting requirements on banks or other
financial institutions. However, many institutions operating in Somalia
maintained international offices and therefore adhered to minimum
international standards, including freezes on terrorist entities' finances.
The government did not distribute to financial institutions the names of
suspected terrorists and terrorist organizations listed on the UN 1267
Sanctions Committee's consolidated list associated with Usama bin
Ladin, members of AQ, or the Taliban.
Somalia did not have any mechanisms in place to share information
related to terrorist financing with the United States.
Regional and International Cooperation: Some Western and regional
nations worked to assist the TFG/National Security Forces through
training and support.
Countering Radicalization and Violent Extremism: The TFG's Ministry of
Information began issuing news releases, which helped make it a
credible source of information for both Somali citizens and the Somali
media. This in turn has bolstered the credibility of their reports of al-
Shabaab atrocities. The Ministry's most effective outreach tool was its
multi-media public broadcasting platform, Radio Mogadishu, which
broadcast over FM radio, streamed live on the Internet, and maintained
a webpage and Facebook presence. The station has made considerable
strides in objective reporting about both the extremists and the
government and thereby gained audience share.
Radio Mogadishu also launched a religious affairs call-in show that
examined, from an Islamic perspective, al-Shabaab's claims to religious
legitimacy. The show aired three times a week and received callers and
text messages from all over Mogadishu (including al-Shabaab controlled
areas) and Facebook messages from around the world. The messaging
was overwhelming critical of al-Shabaab.
_________________________________________________________
AML News / Updates
26 September, 2011
The EU Council amended Annex I to Regulation 356/2010 updated the
list of persons and entities subject to restrictive measures by way of
implementation of Regulation (EU) No 956/2011
Read Regulation (EU) No 956/2011
_________________________________________________________________
Links:
Worldwide AML Legislation (International Bar Association)
US State Dept Narcotics Report 2011 (introduction):
Somalia is the world's quintessential failed state. A fragile transitional
federal government controls only portions of the country's capital and
remote pockets of some regions. That government is besieged by a
classic insurgency, led by U.S.-designated foreign terrorist organization,
al-Shabaab. Many ministries exist in name only, or have non-functioning,
mostly unpaid staff. There is no court system to speak of, and policing is
rudimentary. Any laws that do exist are currently unenforceable given
the security threat to the government and its lack of capacity. The
financial system in Somalia operates almost completely outside
government oversight on the black market, or via international money
transfer companies known as hawalas. The USG lead for Somalia, U.S.
Embassy Nairobi’s Somalia Unit, has no credible state partner with which
to engage on drug control issues.
Somalia does not play a major role in the production, trafficking, or
consumption of illicit narcotics or precursor chemicals associated with
the drug trade. Somalia's narcotics financing is centered on the khat
trade. Khat is a leafy plant grown regionally and chewed by Somalis, and
citizens of other regional states in the Horn of Africa and the Arabian
Peninsula, as well as in parts of Asia. It imparts a mild amphetamine-like
high, manifesting in excitement, euphoria, and suppressed appetite.
Although it is a controlled substance in much of the world, khat is legal in
Somalia, and has aspects of a local traditional practice. Khat is grown in
Kenya, Ethiopia, Yemen and Uganda, imported mostly by plane, and
sold throughout Somalia. Most khat proceeds go back to khat
transporters based outside of Somalia in cash or via money transfer
companies. It is highly unlikely that khat money is laundered in Somalia
because khat proceeds are not illegal and opportunities for legal
investment are few given Somalia's weak economy.
There is no information related to drug-related currency transactions
through Somalia's financial institutions (such as they are). To the extent
Somalis are engaged in the drug trade in the United States, some of
those proceeds are probably transferred to Somalia through hawalas in
the form of remittances, however, informed observers speculate that the
amounts are relatively small.
There is virtually no information sharing on narcotics and terrorist
financing with the United States or other developed countries. There are
no joint formal investigations ongoing of which we are aware Somalia
does not officially encourage or sanction drug trafficking, and there is no
evidence that senior officials are engaged in such activities. Somalia is
not a party to the 1988 United Nations Drug Convention.
For Full report, click here
_________________________________________________________
US State Dept Trafficking in Persons Report 2011 (introduction):
(Special Case)
Somalia remains a Special Case for a ninth consecutive year due to the
lack of a viable central government since 1991. Control of its geographic
area is divided among the self-declared independent Republic of
Somaliland, the semi-autonomous region of Puntland, and the remainder
of the country nominally under the control of the Transitional Federal
Government (TFG). Somalia currently lacks a national governing
structure that could assume responsibility for addressing the country’s
human trafficking problem. During the reporting period, fighting
continued between TFG troops, allied militias, and African Union forces
against anti-TFG forces, terrorist groups, and extremist elements. The
TFG remained preoccupied with the task of securing government
representatives and installations from attacks by such elements; in this
perpetual state of insecurity the government was not able to address
human trafficking. In addition, the TFG currently lacks the necessary
means to identify, investigate, and address systemic issues in Somalia,
including those related to forced labor and forced prostitution; its
capacity to address human trafficking will not significantly increase
without tangible progress in re-establishing governance and stability in
Somalia.
Information regarding trafficking in Somalia remains extremely difficult to
obtain or verify; however, the Somali territory is believed to be a source
and transit country for men, women, and children who are subjected to
conditions of forced labor and sex trafficking. As in previous years,
trafficking victims were primarily trafficked within the country, from
Somalia’s south and central regions to the Puntland and Somaliland
regions. Sources note a rise in reported trafficking cases during the
reporting period. Somali women and girls may have been subject to sex
trafficking in Garowe, the Puntland-administered part of Las Anod (Sool
region), and pirate towns such as Eyl and Harardheere. Sources report
a clearer link between piracy and human trafficking during the reporting
period; girls are reportedly taken from coastal regions, particularly
Bossaso, and placed in pirates’ homes to be exploited in domestic and
sexual servitude. Some female brothel owners, who can profit as much
as $50 per client, kept victims in harsh conditions and meted out
physical abuse as a means of compelling victims to work. There was
reportedly an increase in the use of drugs to render victims unconscious
during transport. In Somali society, certain groups are traditionally
viewed as inferior and are marginalized; Somali Bantus and Midgaan are
sometimes kept in servitude by more powerful Somali clan members as
domestic workers, farm laborers, and herders.
Due to an inability to provide care for all family members, some
desperate Somalis willingly surrender custody of their children to people
with whom they share family relations and clan linkages; some of these
children may become victims of forced labor or sex trafficking. While
most child laborers work within their households or family business,
some children may be forced into labor in agriculture, herding livestock,
or in the construction industry.
Human smuggling is widespread in Somalia and evidence suggests that
traffickers utilize the same networks and methods as those used by
smugglers. Men, women, and children in internally displaced persons
(IDP) camps or congregated along coastal areas hoping to be smuggled
to Europe or the Middle East remained particularly vulnerable to
trafficking. There were reports of trafficking offenders preying on young
women and children, mostly IDPs from South and Central Somalia, at
marketplaces and in the streets, falsely promising them lucrative jobs
outside Somalia. Dubious employment agencies facilitate human
trafficking, targeting individuals desiring to migrate to the Gulf states for
employment. Somali women are smuggled, sometimes via Djibouti, to
destinations in the Middle East, including Yemen and Syria, as well as to
Sudan and South Africa, where they are subjected to conditions of
domestic servitude and forced prostitution. Somali men are subjected to
conditions of forced labor as herdsmen and menial workers in the Gulf
states. Somali children are reportedly smuggled to Saudi Arabia through
Yemen for forced begging. Members of the Somali diaspora use fake
offers of marriage to lure unsuspecting victims, many of whom are
relatives, to Europe or the United States, where they are forced into
commercial sexual exploitation. For example, in November 2010, U.S.
authorities indicted 29 Somali gang members for prostituting four girls –
including one 12-year-old – in several U.S. states. Ethiopian women are
smuggled through Somalia to Yemen and onward to other destinations in
the Middle East where they are forced into domestic servitude and
prostitution.
According to the UN, the recruitment and use of children in armed
conflict has been increasing over the past two years; although the exact
figure is unknown, UN sources estimate that there are several hundred
children in the forces of the TFG or its associated militias, and several
thousand among the insurgent groups. Youth under the age of 18
continued to be recruited, including by force and deception, for direct
participation in hostilities in central and southern Somalia. During the
reporting period, extremist groups al-Shabaab and Hisbul Islam merged
and jointly used systematic force and deception to target vulnerable
children, sometimes as young as eight years old, for membership in their
militias. These forces reportedly increased recruitment at schools and
other educational facilities during the reporting period; al-Shabaab
threatened to punish teachers and parents who refused to send their
children to the training camps. The groups used children to plant
roadside bombs and other explosive devices in addition to carrying out
assassinations, portering, and domestic servitude. In Kismayo, Baidoa,
and Merka, al-Shabaab obligated all boys 15 years of age and older to
fight or face death; in November, al-Shabaab executed two children in
Hurwaa District of Banadir region. Al-Shabaab also continued to forcibly
recruit young girls who were then “married” to its militia leaders and used
for sexual servitude, logistical support, and intelligence gathering. While
the TFG’s military reportedly improved its recruitment practices to
prevent conscription of child soldiers into government ranks, UN sources
reported that the TFG and its allied militias continued to unlawfully use
children throughout the reporting period in their fighting forces. Without
established birth registration systems, it remained difficult to determine
the exact age of persons conscripted into armed groups.
The respective authorities operating in Somalia’s three regions made
few concrete efforts to address human trafficking during the reporting
period; there was generally a lack of anti-trafficking efforts on all fronts –
prosecution, protection, and prevention – in all regions of Somalia. There
is a severe lack of capacity in every part of the country to adequately
address the problem. Understanding of human trafficking and how to
identify and address it remained low among government officials and the
general population. TFG officials recognized trafficking as a problem, but
acknowledged that it is not a priority.
None of the three regions have laws that specifically prohibit human
trafficking, though the pre-1991 penal code outlaws forced and
compulsory labor and local laws prohibit forced labor, involuntary
servitude, and slavery in Somaliland. In December 2010, the Puntland
Parliament enacted provisions prohibiting and punishing offenses under
Islamic law when smugglers cause the death of smuggled or trafficked
persons, prescribing punishments of between one and five years’
imprisonment. However, there is neither a unified police force in the
territory to enforce these laws, nor any authoritative legal system
through which trafficking offenders could be prosecuted. There were no
known prosecutions or convictions of human trafficking offenses,
including by traditional or Shari’a courts, during the reporting period.
Despite the existence of laws protecting children from conditions of
forced labor, authorities did not enforce these against child traffickers.
The government did not provide anti-trafficking training for government
officials and made no known efforts to investigate, prosecute, or punish
government officials involved in trafficking offenses.
The government did not provide any protection services to victims of
trafficking. The International Organization for Migration (IOM) and local
organizations began providing rented houses and reintegration services
to rescued trafficking victims in Bossaso, Puntland. These facilities were
dedicated to trafficking victims and accessible to male and female Somali
and foreign victims. These organizations also placed child victims with
families for care. During the reporting period, IOM and its local partners
provided medical and psychological assistance, food, clothes, vocational
training, and seed money for establishing small businesses to 10 victims
of trafficking – eight in Puntland and two in Somaliland. IOM reported that
clan elders brought a total of 50 suspected trafficking victims in
Somaliland and Puntland to its attention. The government did not
provide financial or in-kind assistance to these organizations.
Government authorities did not utilize formal procedures to identify and
protect victims of trafficking or refer them to available protection
services. The government also did not provide assistance to any Somali
nationals who were repatriated as victims of trafficking.
During the reporting period, there were no reports of formal conscription
or forced recruitment of persons under the age of 18 into the TFG,
Somaliland, or Puntland armed forces. During a November 2010 visit by
the UN Special Representative of the Secretary General on Children and
Armed Conflict, the TFG prime minister promised to investigate all
reports of child soldiers, some of who may be trafficking victims, in the
TFG army and, if found, to demobilize them. Also in December, the TFG
named a Focal Point for Human Rights and Children with responsibility
for addressing child soldier issues. Throughout the reporting period, the
TFG also continued to improve its recruitment practices and participate
in formal troop training to stop child soldier recruitment, including
conscription. New recruits, trained in Uganda and Djibouti, were
thoroughly vetted, and child soldiers were removed from the new units
upon return to the country. However, there are reports that the TFG and
allied forces continued to use a small number of children in armed
service, some of whom may have been involuntary conscripts.
The government made no known efforts to prevent trafficking in persons.
During the reporting period, the government did not conduct anti-
trafficking information or education campaigns or make any discernible
efforts to reduce the demand for commercial sex acts. Neither Somali
national nor regional authorities implemented any programs to address
forced child labor or provided assistance to non-governmental
organizations to do so. Somalia is not a party to the 2000 UN TIP
Protocol.
For full report click here
_________________________________________________________
US State Dept Terrorism Report 2010
Overview: Somalia’s Transitional Federal Government (TFG) continued
to have a fragile hold on power and exerted control over only a small
portion of the capital of Mogadishu. This, together with Somalia’s
protracted state of violent instability, long unguarded coasts, and porous
borders, made the country an appealing location for terrorists seeking a
transit or launching point for operations there or elsewhere. The
capability of the TFG and other Somali local and regional authorities to
carry out counterterrorism activities or develop a counterterrorism
agenda was extremely limited. Clan dynamics remained an influential
factor in governance and security issues.
The terrorist and insurgent group al-Shabaab and other anti-TFG clan-
based militias continued to exercise control over strategic locations in
central Somalia. The TFG and peacekeepers of the African Union
Mission in Somalia (AMISOM) remained confined to parts of Mogadishu
such as the main seaport, airport, and neighborhoods near Villa
Somalia. Al-Shabaab's continued destabilizing influence gave the group
and allied violent extremists a safe haven to train and plan terrorist
activities.
Several senior al-Shabaab leaders have publicly proclaimed loyalty to al-
Qa‘ida (AQ). In some terrorist training camps, AQ-affiliated foreign
fighters led the training and indoctrination of the recruits. Al-Shabaab
conducted suicide attacks, remote-controlled roadside bombings,
kidnappings, and assassinations of government officials, journalists,
humanitarian workers, and civil society leaders throughout Somalia. Al-
Shabaab also threatened UN and other foreign aid agencies and their
staff, resulting in the withdrawal of significant humanitarian operations,
including that of the World Food Program (WFP) from southern Somalia
in January 2010.
Al-Shabaab's influence in Somaliland and Puntland, though on a much
smaller scale than in southern Somalia, remained a concern to local and
regional authorities.
2010 Terrorist Incidents:
Puntland: An estimated 50 government officials, security officers, and
leading elders were killed in terrorist-related attacks in Puntland. A clan
militia led by Siad Atom, connected to al-Shabaab, in the mountainous
Sanag region, was believed to be behind these attacks. From July to
November, Puntland forces launched military operations against Atom
and his allied clan fighters. Puntland's president announced the end of
the operation in November although the ability of Atom to continue future
attacks remained viable and strong.
Somaliland: Attacks and government responses included the following:
* On June 10, Somaliland police clashed with a heavily armed
unidentified group with likely links to terrorists in Burao's eastern
neighborhood. A police officer was killed, and Eastern Burao's police
commander and Togdheer's regional police commander were reportedly
wounded in the clashes. Police arrested five people and impounded
three sacks of explosive powder and weapons. On November 15, a
Berbera court sentenced one of the arrestees, Ahmed Ibrahim Farah, to
death by hanging after he pled guilty to terrorism charges. The court
delivered death sentences to three other accomplices, two men and a
woman, who were tried in absentia. The court also sentenced three
women to serve a one-year jail term each for their role in the terrorist
raid while two other women were set free due to lack of evidence.
* On January 28, a remote control explosion targeting Farah Askar
Hussein, Governor of the Sool region, killed one of his staff and
wounded Hussein and his driver. The explosion occurred at the front
gate of his Las Anod residence during the visit of eight Somaliland
ministers. Somaliland police have not made any arrests related to this
incident.
Mogadishu/South and Central region: During 2010, al-Shabaab carried
out multiple attacks, including a number in Mogadishu against the TFG
and African Union Mission in Somalia. Among the most deadly were a
series of attacks in March, which killed at least 60 people and wounded
160 more; and a string of attacks in late August, which killed at least 87
people and wounded 148. Also in August, al-Shabaab suicide bombers
entered the Muna Hotel in Mogadishu and killed 31 people, including six
members of parliament and four other government officials, when they
detonated their explosives on the roof of the hotel. Attacks and
government responses included the following:
* On May 1, twin explosions inside a packed mosque in the Bakara
market of Mogadishu killed 45 worshippers and left an estimated 100
others injured, including top al-Shabaab militants. A similar mosque
attack on May 2 in Kismayu killed two and injured 13 people after
congregational prayers.
* On August 24, two al-Shabaab gunmen disguised in TFG military
uniforms made a forced entry into Hotel Muna in Mogadishu's
Hamarweyne district and killed 31 of the guests, including members of
parliament and other government officials. The two attackers, according
to TFG official sources, went on a shooting spree while inside the hotel
before one of them blew himself up with a suicide vest.
* On September 9, AMISOM peacekeepers disrupted an al-Shabaab
attack on the Mogadishu airport. After attackers detonated twin suicide
truck bombs near the airport, AMISOM reportedly shot five more bomb-
strapped al-Shabaab militia members as they tried to sneak into the
airport during the resulting mayhem. Four civilians and three
peacekeepers were killed in the attack.
* On November 10, al-Shabaab militia beheaded four people in
Galgaduud for their suspected association with Ahlu Sunna Wal Jama'a
(ASWJ), a moderate Islamic organization that oftentimes fights against al-
Shabaab and has links, albeit weak, with the TFG.
Legislation and Law Enforcement: Somalia's Transitional Federal
Government in Mogadishu, under siege by insurgents, called on regional
governments to help stem the flow of terrorist financing, requesting local
governments trace, freeze, and seize al-Shabaab financing. On May 3,
the TFG passed a counterterrorism law, and in July, Puntland followed
with similar legislation establishing special courts to try terrorism
suspects. Somaliland has not passed any such laws, though its court
system has been able to hand out death sentences to al-Shabaab and
other extremists for crimes committed.
Countering Terrorist Finance: Somalia was a terrorist financing center.
Existing anti-money laundering and counterterrorist finance laws were
unenforceable, given the security threat to the government and its lack
of capacity. The financial system in Somalia operated almost completely
outside of government oversight either on the black market or via
international money transfer entities known as hawalas. Financial entities
in Somalia self-imposed international standards, to the extent they exist,
in order to do business elsewhere in the world.
Al-Shabaab derived most of its funding internally, particularly from
control over the key port of Kismaayo and taxation of goods and
legitimate commerce. Some of the external financing entered Somalia as
cash, but most likely arrived through hawalas. Al-Shabaab also financed
its operations through extortion of private citizens and local businesses,
revenue from air and seaports under their control, and to an unknown
extent by diversion of humanitarian and development assistance. The
TFG, Puntland, and Somaliland regional administrations were unable to
control transit across their borders, and goods flowed into and out of
Somalia without government knowledge. In areas controlled by al-
Shabaab, the group "taxed" goods' movements.
The TFG did not have an independent system or mechanism for freezing
terrorist assets. No government entities were charged with, or capable of
tracking, seizing, or freezing illegal assets. In theory, the Treasury
Ministry would be responsible for investigating financial crimes, but it
lacked the capacity, including financial, technical, and human resources.
U.S. Embassy personnel in Kenya were aware of the interdiction of one
suspected terrorist financier carrying cash illegally into Somalia.
Interdictions of these sorts by TFG officials result in an arrest, and then
indefinite detentions or releases given Somalia's inadequate judicial
system.
There was no mechanism for distributing information from the TFG to
financial institutions, and the TFG enforced no suspicious transactions
or large currency transactions reporting requirements on banks or other
financial institutions. However, many institutions operating in Somalia
maintained international offices and therefore adhered to minimum
international standards, including freezes on terrorist entities' finances.
The government did not distribute to financial institutions the names of
suspected terrorists and terrorist organizations listed on the UN 1267
Sanctions Committee's consolidated list associated with Usama bin
Ladin, members of AQ, or the Taliban.
Somalia did not have any mechanisms in place to share information
related to terrorist financing with the United States.
Regional and International Cooperation: Some Western and regional
nations worked to assist the TFG/National Security Forces through
training and support.
Countering Radicalization and Violent Extremism: The TFG's Ministry of
Information began issuing news releases, which helped make it a
credible source of information for both Somali citizens and the Somali
media. This in turn has bolstered the credibility of their reports of al-
Shabaab atrocities. The Ministry's most effective outreach tool was its
multi-media public broadcasting platform, Radio Mogadishu, which
broadcast over FM radio, streamed live on the Internet, and maintained
a webpage and Facebook presence. The station has made considerable
strides in objective reporting about both the extremists and the
government and thereby gained audience share.
Radio Mogadishu also launched a religious affairs call-in show that
examined, from an Islamic perspective, al-Shabaab's claims to religious
legitimacy. The show aired three times a week and received callers and
text messages from all over Mogadishu (including al-Shabaab controlled
areas) and Facebook messages from around the world. The messaging
was overwhelming critical of al-Shabaab.
_________________________________________________________
AML News / Updates
26 September, 2011
The EU Council amended Annex I to Regulation 356/2010 updated the
list of persons and entities subject to restrictive measures by way of
implementation of Regulation (EU) No 956/2011
Read Regulation (EU) No 956/2011
_________________________________________________________________
Links:
Worldwide AML Legislation (International Bar Association)
|
|
Sanctions:
On 26 September, 2011, the EU Council amended Annex I to
Regulation 356/2010 updated the list of persons and entities
subject to restrictive measures by way of implementation of
Regulation (EU) No 956/2011
Read Regulation (EU) No 956/2011
The UN has an arms embargo in force together with a travel ban
and asset freeze on certain individuals. For more information,
please visit the following link: -
http://www.un.org/sc/committees/751/index.shtml
The EU have similar restrictive measures in force. For further
information, please visit the following link: -
http://ec.europa.
eu/external_relations/cfsp/sanctions/docs/measures_en.pdf
As of 5th May, 2010, The US Department of the Treasury’s Office
of Foreign Assets Control (“OFAC”) is issuing regulations with
respect to Somalia to implement Executive Order 13536 of April
12, 2010. OFAC intends to supplement this part 551 with a more
comprehensive set of regulations, which may include additional
interpretive and definitional guidance and additional general
licenses and statements of licensing policy.
For further information, please visit the following link: -
http://www.treasury.gov/resource-
center/sanctions/Programs/pages/somalia.aspx
November 28, 2011 - The Arab League (comprising 22 Arab
member states), of which this country is a member, has approved
imposing sanctions on Syria. These include: -
* Cutting off transactions with the Syrian central bank
* Halting funding by Arab governments for projects in Syria
* A ban on senior Syrian officials travelling to other Arab countries
* A freeze on assets related to President Bashar al-Assad's
government
The declaration also calls on Arab central banks to monitor
transfers to Syria, with the exception of remittances from Syrians
abroad.
For further information, click here
The Arab League (comprising 22 Arab member states), of which
this country is a member, has boycotted Israel in a systematic
effort to isolate Israel economically in support of the Palestinians,
however, the implementation of the boycott has varied over time
among member states..
There are three tiers to the boycott. The primary boycott prohibits
the importation of Israeli-origin goods and services into boycotting
countries. The secondary boycott prohibits individuals, as well as
private and public sector firms and organizations, in member
countries from engaging in business with any entity that does
business in Israel. The Arab League maintains a blacklist of such
firms. The tertiary boycott prohibits any
entity in a member country from doing business with a company or
individual that has business dealings with U.S. or other firms on
the Arab League blacklist.
____________________________________________________
Offshore Jurisdiction Blacklists:
Information unavailable.
____________________________________________________
US State Department Money Laundering Report - 2012:
Somalia has essentially been without a functioning central
government since 1991 and continues to be viewed as the world’s
quintessential failed state. The Transitional Federal Government
(TFG) now largely controls almost all of the country’s capital as
well as pockets of some regions. Many ministries exist in name
only or have non-functioning, mostly unpaid staff. Due to its lack
of a public regulatory system and its inaccessibility, little is known
about money laundering in Somalia. No anti-money
laundering/counter-terrorist financing (AML/CFT) laws exist. There
is some evidence that piracy proceeds from Somalia make their
way to Dubai and Nairobi. Piracy ransoms, much of which
reportedly remains as cash, are delivered through cash drops to
pirates off Somalia’s coast. Anecdotal reports indicate ransom
payments finance real estate, luxury goods and businesses.
Public corruption is rampant and significantly facilitates money
laundering. For example, some government officials in Somalia’s
northern region of Puntland are reportedly benefiting from pirate
ransoms. They may facilitate ransom laundering or the transfer of
ransom money to neighboring countries or globally.
The financial system in Somalia operates almost completely
outside of government oversight, either on the black market or via
money/value transfer services (MVTS), particularly hawalas.
Smuggling is rampant. Somalia has one of the longest land
borders as well as the longest coastline in Africa. The TFG and
local officials are unable to maintain control over these points of
entry, and goods flow in and out of Somalia unchecked.
Somalia is also a center for terrorist financing. Al-Shabaab, a U.S.-
designated international terrorist organization, maintains
headquarters in the country. Its insurgency against the TFG is
financed externally, including by the global Somali diaspora and
business community. Some funds enter as cash, but a significant
portion reportedly passes through hawalas and other MVTS.
There are also occasional reports of U.S. dollar counterfeiting in
al-Shabaab-controlled areas as well as reports of al-Shabaab
extorting ransom payments from pirates. Al-Shabaab operations
are also financed through extortion schemes targeting private
citizens, local businesses, seaports under the group’s control,
and diversion of development and humanitarian assistance funds.
For additional information focusing on terrorism financing, please
refer to the Department of State’s Country Reports on Terrorism,
which can be found here: http://www.state.gov/j/ct/rls/crt/
Do Financial Institutions engage in currency transactions related
to international narcotics trafficking that include significant
amounts of US currency; currency derived from illegal sales in the
U.S.; or that otherwise significantly affect the U.S.: NO
Criminalization of Money Laundering:
“All serious crimes” approach or “list” approach to predicate
crimes: Not criminalized
Legal persons covered: criminally: Not applicable civilly: Not
applicable
Know-your-customer (KYC) rules:
Enhanced due diligence procedures for PEPs: Foreign: NO
Domestic: NO
KYC covered entities: Not applicable
Suspicious Transaction Reporting (STR) Requirements:
Number of STRs received and time frame: Not applicable
Number of CTRs received and time frame: Not applicable
STR covered entities: Not applicable
Money Laundering Criminal Prosecutions/Convictions:
Prosecutions: None
Convictions: None
Records exchange mechanism:
With U.S.: MLAT: NO Other mechanism: NO
With other governments/jurisdictions: NO
Somalia is not a member of any Financial Action Task Force
(FATF)-style regional body.
Enforcement and implementation issues and comments:
The legal system in Somalia is composed of traditional courts
(“xeer”), a variety of local and regional court systems as well as a
system with both civilian and military courts under the TFG. There
are no AML/CFT laws, and the financial regulations that do exist
are unenforceable given the lack of policing and investigative
capacity and Somalia’s insecurity.
Somalia essentially lacks a formal financial sector, and there are
no functioning government regulatory agencies. Consequently,
formal financial institutions and the MVTS sector in Somalia are
not subject to KYC programs under Somali law. There are virtually
no financial record keeping requirements enforced by the Somali
government, nor are there suspicious transaction or large
currency transaction reporting requirements. International
standards, to the extent they exist, are self-imposed in Somalia by
hawalas and other financial entities that must meet international
rules and regulations to do business elsewhere in the world.
The Ministry of Finance and Treasury lacks the capacity, including
financial, technical and human resources, to investigate money
laundering and terrorist financing. There were no arrests for
money laundering in 2011. In one 2010 case, a suspected
terrorist financier bringing bulk cash into Somalia was interdicted;
in another, incoming counterfeit U.S. dollars were seized at
Mogadishu International Airport. It is not clear what happened to
the perpetrators; either indefinite detentions or quick releases are
endemic, given Somalia’s inadequate judicial system.
Somalia has no laws requiring forfeiture of criminal proceeds or
terrorist funds. No government entities are charged with, or
capable of tracking, seizing, or freezing illegal assets. Somali
businesses do not coordinate with the government with regard to
illegal transactions. The TFG has called on regional governments
to help stem the flow of terrorist financing, including requesting
local governments to trace, freeze, and seize funds and finances
related to and in support of al-Shabaab.
Somalia does not have any mechanisms in place under which to
share information related to financial crimes, money laundering,
and terrorist financing with the U.S. or with other developed
countries. The lack of AML/CFT laws, regulatory bodies, and
enforcement mechanisms to counter money laundering and
financial crimes is due to a lack of capacity within the TFG, and
not the lack of political will. Obstacles to enacting and
implementing AML/CFT laws include the TFG’s limited territorial
control, threats to the government by the al-Shabaab insurgency,
lack of capacity at all levels of government, and insufficient
policing and investigative capacity.
On 26 September, 2011, the EU Council amended Annex I to
Regulation 356/2010 updated the list of persons and entities
subject to restrictive measures by way of implementation of
Regulation (EU) No 956/2011
Read Regulation (EU) No 956/2011
The UN has an arms embargo in force together with a travel ban
and asset freeze on certain individuals. For more information,
please visit the following link: -
http://www.un.org/sc/committees/751/index.shtml
The EU have similar restrictive measures in force. For further
information, please visit the following link: -
http://ec.europa.
eu/external_relations/cfsp/sanctions/docs/measures_en.pdf
As of 5th May, 2010, The US Department of the Treasury’s Office
of Foreign Assets Control (“OFAC”) is issuing regulations with
respect to Somalia to implement Executive Order 13536 of April
12, 2010. OFAC intends to supplement this part 551 with a more
comprehensive set of regulations, which may include additional
interpretive and definitional guidance and additional general
licenses and statements of licensing policy.
For further information, please visit the following link: -
http://www.treasury.gov/resource-
center/sanctions/Programs/pages/somalia.aspx
November 28, 2011 - The Arab League (comprising 22 Arab
member states), of which this country is a member, has approved
imposing sanctions on Syria. These include: -
* Cutting off transactions with the Syrian central bank
* Halting funding by Arab governments for projects in Syria
* A ban on senior Syrian officials travelling to other Arab countries
* A freeze on assets related to President Bashar al-Assad's
government
The declaration also calls on Arab central banks to monitor
transfers to Syria, with the exception of remittances from Syrians
abroad.
For further information, click here
The Arab League (comprising 22 Arab member states), of which
this country is a member, has boycotted Israel in a systematic
effort to isolate Israel economically in support of the Palestinians,
however, the implementation of the boycott has varied over time
among member states..
There are three tiers to the boycott. The primary boycott prohibits
the importation of Israeli-origin goods and services into boycotting
countries. The secondary boycott prohibits individuals, as well as
private and public sector firms and organizations, in member
countries from engaging in business with any entity that does
business in Israel. The Arab League maintains a blacklist of such
firms. The tertiary boycott prohibits any
entity in a member country from doing business with a company or
individual that has business dealings with U.S. or other firms on
the Arab League blacklist.
____________________________________________________
Offshore Jurisdiction Blacklists:
Information unavailable.
____________________________________________________
US State Department Money Laundering Report - 2012:
Somalia has essentially been without a functioning central
government since 1991 and continues to be viewed as the world’s
quintessential failed state. The Transitional Federal Government
(TFG) now largely controls almost all of the country’s capital as
well as pockets of some regions. Many ministries exist in name
only or have non-functioning, mostly unpaid staff. Due to its lack
of a public regulatory system and its inaccessibility, little is known
about money laundering in Somalia. No anti-money
laundering/counter-terrorist financing (AML/CFT) laws exist. There
is some evidence that piracy proceeds from Somalia make their
way to Dubai and Nairobi. Piracy ransoms, much of which
reportedly remains as cash, are delivered through cash drops to
pirates off Somalia’s coast. Anecdotal reports indicate ransom
payments finance real estate, luxury goods and businesses.
Public corruption is rampant and significantly facilitates money
laundering. For example, some government officials in Somalia’s
northern region of Puntland are reportedly benefiting from pirate
ransoms. They may facilitate ransom laundering or the transfer of
ransom money to neighboring countries or globally.
The financial system in Somalia operates almost completely
outside of government oversight, either on the black market or via
money/value transfer services (MVTS), particularly hawalas.
Smuggling is rampant. Somalia has one of the longest land
borders as well as the longest coastline in Africa. The TFG and
local officials are unable to maintain control over these points of
entry, and goods flow in and out of Somalia unchecked.
Somalia is also a center for terrorist financing. Al-Shabaab, a U.S.-
designated international terrorist organization, maintains
headquarters in the country. Its insurgency against the TFG is
financed externally, including by the global Somali diaspora and
business community. Some funds enter as cash, but a significant
portion reportedly passes through hawalas and other MVTS.
There are also occasional reports of U.S. dollar counterfeiting in
al-Shabaab-controlled areas as well as reports of al-Shabaab
extorting ransom payments from pirates. Al-Shabaab operations
are also financed through extortion schemes targeting private
citizens, local businesses, seaports under the group’s control,
and diversion of development and humanitarian assistance funds.
For additional information focusing on terrorism financing, please
refer to the Department of State’s Country Reports on Terrorism,
which can be found here: http://www.state.gov/j/ct/rls/crt/
Do Financial Institutions engage in currency transactions related
to international narcotics trafficking that include significant
amounts of US currency; currency derived from illegal sales in the
U.S.; or that otherwise significantly affect the U.S.: NO
Criminalization of Money Laundering:
“All serious crimes” approach or “list” approach to predicate
crimes: Not criminalized
Legal persons covered: criminally: Not applicable civilly: Not
applicable
Know-your-customer (KYC) rules:
Enhanced due diligence procedures for PEPs: Foreign: NO
Domestic: NO
KYC covered entities: Not applicable
Suspicious Transaction Reporting (STR) Requirements:
Number of STRs received and time frame: Not applicable
Number of CTRs received and time frame: Not applicable
STR covered entities: Not applicable
Money Laundering Criminal Prosecutions/Convictions:
Prosecutions: None
Convictions: None
Records exchange mechanism:
With U.S.: MLAT: NO Other mechanism: NO
With other governments/jurisdictions: NO
Somalia is not a member of any Financial Action Task Force
(FATF)-style regional body.
Enforcement and implementation issues and comments:
The legal system in Somalia is composed of traditional courts
(“xeer”), a variety of local and regional court systems as well as a
system with both civilian and military courts under the TFG. There
are no AML/CFT laws, and the financial regulations that do exist
are unenforceable given the lack of policing and investigative
capacity and Somalia’s insecurity.
Somalia essentially lacks a formal financial sector, and there are
no functioning government regulatory agencies. Consequently,
formal financial institutions and the MVTS sector in Somalia are
not subject to KYC programs under Somali law. There are virtually
no financial record keeping requirements enforced by the Somali
government, nor are there suspicious transaction or large
currency transaction reporting requirements. International
standards, to the extent they exist, are self-imposed in Somalia by
hawalas and other financial entities that must meet international
rules and regulations to do business elsewhere in the world.
The Ministry of Finance and Treasury lacks the capacity, including
financial, technical and human resources, to investigate money
laundering and terrorist financing. There were no arrests for
money laundering in 2011. In one 2010 case, a suspected
terrorist financier bringing bulk cash into Somalia was interdicted;
in another, incoming counterfeit U.S. dollars were seized at
Mogadishu International Airport. It is not clear what happened to
the perpetrators; either indefinite detentions or quick releases are
endemic, given Somalia’s inadequate judicial system.
Somalia has no laws requiring forfeiture of criminal proceeds or
terrorist funds. No government entities are charged with, or
capable of tracking, seizing, or freezing illegal assets. Somali
businesses do not coordinate with the government with regard to
illegal transactions. The TFG has called on regional governments
to help stem the flow of terrorist financing, including requesting
local governments to trace, freeze, and seize funds and finances
related to and in support of al-Shabaab.
Somalia does not have any mechanisms in place under which to
share information related to financial crimes, money laundering,
and terrorist financing with the U.S. or with other developed
countries. The lack of AML/CFT laws, regulatory bodies, and
enforcement mechanisms to counter money laundering and
financial crimes is due to a lack of capacity within the TFG, and
not the lack of political will. Obstacles to enacting and
implementing AML/CFT laws include the TFG’s limited territorial
control, threats to the government by the al-Shabaab insurgency,
lack of capacity at all levels of government, and insufficient
policing and investigative capacity.
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| SOMALIA |
| KnowYourCountry |
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| Last Updated: 16 April 2012 |