Dahabshiil Holdings Ltd., a Somali company that provides access for overseas citizens to send money there, asked a U.K. court to stop Barclays Plc (BARC) from closing its bank account.
The bank gave a “dearth of detail” on its decision, Alan Maclean, a lawyer for Dahabshiil, said at a hearing in London today. The bank’s dominant position in the market for remittances means it will breach competition law if it closes the account, he argued.
Barclays said in May it would end its business with Dubai-based Dahabshiil, citing the lack of “strong anti-laundering governance structures.” That date was moved from July 10 to Aug. 12, and then to Sept. 30, after British lawmakers lobbied the London-based lender. The account is scheduled to be closed tomorrow if the injunction isn’t granted.
“This is very important to the community we serve who rely on sending money to help their family from the U.K. back to Africa, especially Somalia,” Abdirashid Duale, chief executive officer of Dahabshiil, said outside the hearing. “It’s life and death to those who rely on our services.”
The case has attracted the interest of British Olympic gold medallist Mo Farah, whose family is from Somalia, and humanitarian groups such as Oxfam, who have lobbied to block Barclays from shutting the account.
The London-based bank said that while it regrets “that any client has to look for alternative banking arrangements,” it has to “uphold the law and the regulations.”
“Failure to do so would result in Barclays being prosecuted by regulators around the world and potentially fined many hundreds or billions of pounds,” the bank said in an e-mailed statement. “Money transfer businesses are a particular focus for regulators given the risk of them being used for money laundering or funding terrorism.”
Barclays handles as much as a third of the $1.5 billion sent home annually by those living abroad to Somalia, according to Dahabshiil.
While the company has opened accounts with another bank, Abu Dhabi Islamic Bank PJSC, it doesn’t cover the breadth of services it can get with Barclays, lawyers for Dahabshiil said.
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