Dahabshiil

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Dahabshiil
دهب شيل
Industry Money transfer
Founded 1970
Burco, Somalia
Headquarters Dubai, United Arab Emirates
Key people Abdirashid Duale
Revenue US$300 million (2009)
Employees over 2000 worldwide
Website www.dahabshiil.com

Dahabshiil (Somali: Dahabshiil, Arabic: دهب شيل‎) is an international funds transfer company headquartered in Dubai, United Arab Emirates.[1] Formed in the early 1970s, the firm operates from over 24,000 outlets and employs more than 2,000 people across 144 countries. The company is managed by Awale Group Holding which has taken over significant shares in Dahabshill. [2] It provides financial services to international organisations, as well as to both large and small businesses and private individuals.[3][4][5] The company is also involved in numerous community building projects in Somalia.[3]

In December 2011 the UK newspaper The Independent published the results of an undercover investigation of UK public relations firm Bell Pottinger. According to the Independent article, Bell Pottinger had cited its success at burying Internet reports concerning a Dahabshiil money transfer agent who had been detained in Guantanamo from 2002 to 2009.[6][7]

History[edit]

A Dahabshiil franchise outlet in Brisbane, Australia.

Dahabshiil (meaning "Gold smelter"[1]) was founded in 1970 by Mohamed Said Duale, a Somali entrepreneur based in Burao, the capital city of Togdheer province in the modern-day Somaliland region.[8]

Initially a general trading enterprise, the firm began specialising in remittance broking during the 1970s, when many Somali males from northern Somalia migrated to the Gulf States for work. This resulted in a growing demand for services to transfer money from those migrant workers back to their families.[1][9]

Because of foreign exchange controls imposed by the Somali government at the time, most of the funds were transferred via a trade-based system known as Franco Valuta (FV); the latter process involved the import of goods, proceeds from the sale of which were sent to migrants’ families.[10] These transactions formed the bulk of Dahabshiil’s business throughout the 1980s.[11]

With the Somali Civil War fast approaching, the Duale family were among the hundreds of thousands who retreated to the Somali-inhabited Ogaden region in neighbouring Ethiopia. The business in Somalia collapsed, but Duale was able to draw on an extensive network of contacts in the Gulf to re-establish the venture, setting up a small office in Ethiopia to serve displaced Somali communities there and in Djibouti.[12]

In 1989, Dahabshiil opened its first office in London, where a number of Somalis had arrived during the war. The UK arm was managed by Mohammed Duale’s son, Abdirashid Duale, who began to expand the business as the Somali population in the UK grew.[13]

Somali money transfer industry[edit]

A Dahabshiil franchise outlet in Puntland, Somalia.

Funds transfer services have become a large industry in Somalia.[4] Estimates of the aggregate value of remittances from the Somali diaspora back to the home country vary. However, a recent study by the United Nations Development Programme suggested a figure of around $1.6 billion, sent largely by emigrants in the US, Europe and the Gulf region.[14][15] Industry experts estimate that Dahabshiil handles around two-thirds of all remittances to Somali-speaking regions.[16]

Most of the Somali money transfer operators (MTOs) are credentialed members of either the Somali Money Transfer Association (SOMTA), an umbrella organisation that regulates the community's money transfer sector, or its predecessor, the Somali Financial Services Association (SFSA). Besides Dahabshiil, Somali MTOs include Qaran Express, Mustaqbal, Amal Express, Kaah Express, Hodan Global, Olympic, Amana Express, Iftin Express and Tawakal Express. A unique feature of these Somali funds transfer companies is that they all charge lower commission fees than their Western counterparts; typically around 5% for sums of up to $1,000, a range encompassing the vast majority of Somali household remittances. For amounts greater than $1,000, Somali MTOs charge commissions of 3% to 4%, significantly lower than Western Union's 7.1% fee and MoneyGram's 7.2% fee for sending similar amounts to Ethiopia. Charges for the remittance of charity funding vary between 0% and 2%.[5]

Accounting for almost a quarter of household income in Somalia, funds remitted by the Somali diaspora have helped to sustain communities in some of the most remote locations in the Horn of Africa.[14][17] With around 40% of households receiving such assistance from relatives working abroad, remittances have proved significant in promoting private sector activity in telecoms, transport and housing, as well as in basic infrastructure, health and education.[17][18] It has also been argued that the inflow of such foreign-based capital has helped keep the Somali shilling afloat and offset depreciatory and inflationary pressures.[19]

Company overview[edit]

Branches and transfer network[edit]

Dahabshiil is the largest of the Somali money transfer operators (MTOs), having captured most of the market vacated by Al-Barakaat. The firm has its headquarters in Dubai and employs more than 2,000 people across 144 countries, with 130 branches in Somalia, a further 130 branches in the United Kingdom, and 400 branches globally.[20][21] Its worldwide network comprises more than 24,000 agent and branch locations, and the company offers both SMS notification and 24-hour online transfers.[22][23]

Products and services[edit]

A Dahabshiil franchise outlet in Columbus, Ohio.

Remittance transfer remains Dahabshiil’s core business, but the company has diversified to offer financial services to international organisations, businesses and private individuals.[24] Most of the major international development organisations operating in Somalia use Dahabshiil to transfer funds, including the UN, WHO, World Bank, Oxfam, Save the Children and Care International.[25]

In 2008, Dahabshiil acquired a majority stake in Somtel, a Somaliland-based telecommunications firm specializing in high speed broadband, mobile internet, and mobile phone services.[26][27] The acquisition provided Dahabshiil with the necessary platform for a subsequent expansion into mobile banking, a growth industry in the regional banking sector.[28][29]

In early 2009, Dahabshiil opened an Islamic bank, Dahabshiil Bank International, in Djibouti.[30] An international bank, DBI provides services to business and private clients demanding Shariah-compliant financing.[31] Operations centre on asset finance, partnership finance and lease finance.[32]

That same year, Dahabshiil teamed up with leading Somali retailers, hotels, restaurants, and petrol stations to launch ‘Dahabshiil eCash’, Somalia’s first debit card service.[33][34]

Community investment[edit]

Dahabshiil invests 5% of its annual profits in community projects aimed at improving schools, hospitals, agriculture and sanitation services.[25] It also sponsors a number of social events, including the Somali Week Festival and the Somali Youth Sports Association in the UK, which help to promote understanding and cooperation through Somali art and culture and sport, respectively.[35] After the tsunami of 2005, the company helped provide immediate relief to the people in the regions of Somalia that were most affected.[36] In 2009, the firm also donated $20,000 toward the establishment of a state-of-the-art mental health facility in Garowe, the administrative capital of the northeastern Puntland region of Somalia.[37]

Compliance[edit]

Dahabshiil’s services are managed according to international regulations to combat terrorism, money laundering and other illegal activities.[38] The firm is a member of the International Association of Money Transfer Networks (IAMTN), the UK Money Transmitter Association and the USA Money Transmitter Association, and is fully compliant with AML (Anti Money Laundering) regulations.[26][39]

In 2010, Dahabshiil became the first international payments firm to achieve authorisation from the UK Financial Services Authority (FSA), under the Payment Services Regulations of that year which demand the highest standards of security, customer protection, transparency and speed of delivery.[40]

In May 2013, Barclays announced its decision to end the banks business relationship with Dahabshiil, citing a lack of "strong anti-laundering governance structures." The decision was delayed after British lawmakers lobbied Barclays.[41] In July 2013, Mo Farah, the Somali-born Olympic gold medalist, joined legislators and activists in a campaign urging Barclays Bank to repeal its decision to withdraw from the UK remittance market.[42] On 5 November 2013, the High Court in London granted an interim injunction preserving the banking arrangement between Dahasbhiil and Barclays until the conclusion of a full trial.[43] Judge Launcelot Henderson described Barclays' decision to terminate Dahabshil's account as "unfair", and requested a detailed examination into the reasons behind the bank's decision.[44]

Awards[edit]

In 2008, Dahabshiil's CEO, Abdirashid Duale, was awarded Top Manager of the Year by the International Association of Money Transfer Networks in recognition of the outstanding services that the firm offers its clients.[36] This was followed in 2010 with the UK's Mayor of Tower Hamlets award for excellence in the community, which recognizes the "outstanding contribution" Dahabshiil has made to the local, national and international Somali community over the last 40 years.[35]

Controversies[edit]

Dahabshiil employee Mohammed Sulaymon Barre's Guantanamo detention[edit]

In February 2009 Peter Finn, writing in The Washington Post, cited the allegations that Somali Guantanamo captive Mohammed Sulaymon Barre in working for Dahabshiil may have laundered money for terrorists as an example of the difficulties that faced the joint task force President Obama had recently put in place to conduct new reviews of the captives's status.[45] Before it was cleared of suspicion by the 9-11 Commission Dahabshiil's main Somali competitor, Al Barakat, was suspected of being used to launder funds sent to support the hijackers in the September 11 attacks. The USA was able to get most countries to suspend al Barakat's operations. Barre was told that since Al Barakat's customers had shifted over to using Dahabshiil it was possible he had acquired former customers of Al Barakat who wanted to use Dahabshiil to launder money. Barre denied any knowledge of terrorism. Obama's joint task force cleared him for release later in 2009.

Accusations that Dahabshiil tried to suppress unwanted press coverage[edit]

A collection of Somalis who describe themselves as independent journalists has asserted that Dahabshiil had (temporarily) succeeded in convincing their web-host to shut down their site because they published stories critical of Dahabshiil.[46] They published a copy of a letter faxed to their webhosting service, demanding the removal of over a dozen of their articles about Dahabshiil.[47] In addition to claiming the site's coverage was defamatory, the letter claimed the site had used their trademark without permission, modifying it by adding a rifle, suggesting a tie to violence.

The collective reports that one of the stories Dahabshiil wanted removed was about a song by popular Somali singer Sada Ali Warsame that was critical of Dahabshiil.[46]

Dahabshiil employment of a PR firm to manipulate the results of Google searches[edit]

An undercover investigation by The Independent revealed that public relations firm Bell Pottinger had been contracted by Dahabshiil to minimise any negative reporting of the company, including the fact that a Dahabshiil employee had been detained in Guantanamo Bay on allegations he had laundered money for Al-Qai'da.[6] The Bell Pottinger executives detailed their techniques, which included manipulating the ranking of Google search results to suppress unwanted coverage, and also boasted they had a 'team' that could manage Wikipedia articles. The contract was said to have been a success.[7]

References[edit]

  1. ^ a b c Jaco Maritz (5 October 2010). "Running a thriving money transfer business from Somalia". How we made it in Africa. Retrieved 2011-12-10. Dahabshiil, a Somali word reportedly meaning gold smelter, was born as a result of Somalia’s civil war, when those living outside the country had to send money to their relatives and friends back home.  mirror
  2. ^ Katrina Manson (24 May 2011). "Money man serves the Somali diaspora". Forbes magazine. Archived from the original on 10 December 2011. Retrieved 2011-12-10. Today he divides his time between London and Hargeisa, the capital of Somaliland, an autonomous region of Somalia that declared independence in 1991, and is the chief executive of Dahabshiil, a global money transfer company that operates through 24,000 outlets in 144 countries. 
  3. ^ a b "Decades of community service recognised with award". Tower Hamlets Recorder. 13 May 2010. Retrieved 2011-12-10. WHIITECHAPEL-based money transfer provider Dahabshiil has received an award for its "outstanding contribution to the Somali community in Tower Hamlets over the last four decades. Apart from its business with the Horn of Africa, Dahabshiil sponsors a range of events, including the Somali Week Festival ... It also invests more than 5 per cent of its annual profits into community regeneration projects involving the development of schools, hospitals, agriculture and sanitation.  mirror
  4. ^ a b Paul Trustfull. "Freeing Finance: If money makes the world go round, Dahabshiil CEO Abdirashid Duale makes sure it goes to the right people". Forbes Magazine. Retrieved 2011-12-10. Already, Dahabshiil has an extensive worldwide network that stretches from North America, Western Europe and the Middle East, to West and East Africa, including Ethiopia, Uganda and Sudan  mirror
  5. ^ a b UK Somali Remittances Survey
  6. ^ a b Newman, Melanie; Wright, Oliver (6 December 2011). "Caught on camera: top lobbyists boasting how they influence the PM". London: The Independent. Retrieved 2011-12-10. The firm cited past examples of its work, included manipulating Google rankings for an East African money transfer company called Dahabshiil. Bell Pottinger executives said they had ensured that references to a former Dahabshill employee subsequently detained in Guantanamo Bay because of alleged links to al-Qai'da disappeared from the first 10 pages of a Google search for the company.  mirror
  7. ^ a b "Dahabshiil -- you couldn't find it within the first 10 pages.". Suna Times. 7 December 2011. Retrieved 2011-12-09. They came to us and said, can you solve my Google problem. And their problem was, while they had a very ethical business, doing things the right way and transferring 90 per cent of money going in and out of Somalia and other war-torn countries, different markets in Africa, including money for aid agencies, for the UN etc – when you looked at Google, the vast majority of the searches on the first five pages were about a former employee who was holed up in Guantanamo Bay, who had left Dahabshiil long before he was arrested. No charges had been brought against him but nonetheless he was this former Dahabshiil employee and this was the story. It took us three months, but after three months we searched down the first 10 pages of Google – you couldn't find it within the first 10 pages."  mirror
  8. ^ Matthew Saltmarsh "Somalis’ Money Is Lifeline for Homeland", The New York Times (11 November 2009).
  9. ^ Overseas Development Institute
  10. ^ COMPAS Publications
  11. ^ Global Security
  12. ^ Hiiraan
  13. ^ Harowo
  14. ^ a b United Nations Development Programme
  15. ^ United Nations Industrial Development Organization
  16. ^ Mobile Money Africa
  17. ^ a b The Norwegian Council for Africa
  18. ^ World Bank Social Development Papers
  19. ^ "Business in Somalia: Commerce amid chaos. Canny traders adapt to anarchy", The Economist (10 February 2011).
  20. ^ UK Somali Remittance Survey
  21. ^ Yahoo! Finance
  22. ^ International Association of Money Transfer Networks
  23. ^ Odindo Ayieko All Africa "Somalia: Amid the Chaos, Money Transfer is Booming Business", allafrica.com (20 September 2010).
  24. ^ All Africa
  25. ^ a b "Entrepreneur Spotlight: Abdirashid Duale", The African Business Journal (July 2010).
  26. ^ a b International Association of Money Transfer Networks
  27. ^ Yahoo! Finance
  28. ^ TechChange
  29. ^ Monty Munford "Guest Post: Could Tiny Somaliland Become the First Cashless Society?", TechCrunch.com (5 September 2010).
  30. ^ Financial Technology Africa
  31. ^ Somali Directory
  32. ^ Somaliland.Org
  33. ^ "eCash service launched in Somalia", mobilemoneyafrica.com (1 November 2009).
  34. ^ "Somalis get first-ever debit card". BBC News. 28 October 2009. 
  35. ^ a b "Decades of community service recognised with award". Tower Hamlets Recorder. 13 April 2007. Retrieved 3 June 2010. 
  36. ^ a b Trustfull, Paul. "Freeing Finance: If money makes the world go round, Dahabshiil CEO Abdirashid Duale makes sure it goes to the right people". Forbes. Retrieved 3 June 2010. 
  37. ^ Puntland leader launches welfare agency
  38. ^ Somalia JNA
  39. ^ Harowo
  40. ^ Financial Services Authority
  41. ^ Barclays Defends Somali Account Closing on Money-Laundering Risk
  42. ^ Muir, Hugh (26 July 2013). "Mo Farah pleads with Barclays not to end remittances to Somalia". The Guardian. Retrieved 29 July 2013. 
  43. ^ Somalia: Dahabshiil Receives Reprieve Against Barclays
  44. ^ Somali Money Transfer Company Wins Injunction Against Barclays Bank
  45. ^ Peter Finn (17 February 2009). "Sorting through complex, and often flawed, cases: Investigators set out to decide detainees' fate". Washington Post. Retrieved 2011-12-09. In Karachi, he worked for Dahabshiil, an international money-transfer company that has offices in dozens of countries, including the United States. That job, and his flight from Somalia to Pakistan, led to accusations that Barre was ‘engaged in hostilities against the U.S.,’ according to military documents. ‘I am convinced that your branch of the Dahabshiil company was used to transfer money for terrorism,’ the presiding officer told him at a hearing in Guantanamo in 2005. Barre said that if any suspect money was transferred from his home office, it was done so unwittingly, and that Dahabshiil is a reputable company operating legally worldwide.  mirror
  46. ^ a b "On the other hand, the Dahabshiil Company shut down the sunatimes.com". Suna Times. 27 October 2010. Retrieved 2011-12-10. Dahabshiil lawyers wrote to our hosting company Bluehost and they instructed them to put us off air, however Bluehost reinstated our service later.  mirror
  47. ^ Bird & Bird (27 April 2011). "re: www.sunatimes.com". Suna Times. Retrieved 2011-12-10. The website contains a large number of articles which either: (i) contain unfounded and defamatory statements of Dahabshiil; and/or (ii) infringe intellectual property rights belonging to Dahabshiil.http://sunatimes.com/uploads/content/file/1546.pdf  mirror

External links[edit]