An Act of State Terrorism

Bullies of the Secret State - Why we should have every reason to be concerned about the detention of a private citizen under the 2000 Terrorism Act at Heathrow.

A spokesperson for Scotland Yard has reported: "At 08:05 on Sunday, 18 August a 28-year-old man was detained at Heathrow airport under schedule 7 of the Terrorism Act 2000. He was not arrested. He was subsequently released at 17:00."

The arrested man (and his detention, denying him the right to move freely was still an' arrest'), was the partner of the Guardian  journalist who has written a series of stories revealing mass surveillance programmes by the US National Security Agency. He was held for almost nine hours on Sunday by UK authorities as he passed through Heathrow airport on his way home to Rio de Janeiro.

He was stopped by officers at 8.05am and informed that he was to be questioned under schedule 7 of the Terrorism Act 2000. The controversial law, which applies only at airports, ports and border areas, allows officers to stop, search, question and detain individuals.

The 28-year-old was held for nine hours, the maximum the law allows before officers must release or formally arrest the individual. He was released, but officials confiscated electronics equipment including his mobile phone, laptop, camera, memory sticks, DVDs and games consoles.

Since 5 June, Glenn Greenwald, his partner, has written a series of stories revealing information about the USA's electronic surveillance programmes, detailed in thousands of files passed to him by whistleblower Edward Snowden. The Guardian has also published a number of stories about blanket electronic surveillance by Britain's GCHQ, also based on documents from Snowden.

The actions of the police in arresting this man, using the powers granted under this specific anti-terror legislation, pose very serious questions about which activities should become subject to its provisions, and how the UK authorities are abusing its provisions.

An officer's power to stop, question and detain is contained in Section 2(1) which states;

"...An examining officer may question a person to whom this paragraph applies for the purpose of determining whether he appears to be a person falling within section 40(1)(b)..."

Section 40(1)(b) states that;

(1 In this Part “terrorist” means a person who —

(a) has committed an offence under any of sections 11, 12, 15 to 18, 54 and 56 to 63, or

(b) is or has been concerned in the commission, preparation or instigation of acts of terrorism.

(2)The reference in subsection (1)(b) to a person who has been concerned in the commission,

preparation or instigation of acts of terrorism includes a reference to a person who has been, whether before or after the passing of this Act, concerned in the commission, preparation or instigation of acts of terrorism within the meaning given by section 1.

So the police stopped this man because he "...appeared to be someone who is or has been concerned in the commission, preparation or instigation of acts of terrorism.."

Under the act, terrorism is defined as;

"...The use or threat of action where —

(a ) the action falls within subsection (2),

(b) the use or threat is designed to influence the government or an international governmental organisation or to intimidate the public or a section of the public, and

(c) the use or threat is made for the purpose of advancing a political, religious, racial or ideological cause.

(2) Action falls within this subsection if it—

(a) involves serious violence against a person,

(b) involves serious damage to property,

(c) endangers a person’s life, other than that of the person committing the action,

(d) creates a serious risk to the health or safety of the public or a section of the public, or

(e) is designed seriously to interfere with or seriously to disrupt an electronic system.

Please don't spend too much time reading these detailed provisions too closely, because on the terms under which this legislation was originally implemented, the man arrested does not fall within the definitions identified here. I have included them merely to define the provisions under which this man could be stopped and detained.

It is well to recall that this legislation was amended after the terror attacks in London in 2005, and the law which applies today reflects the changes introduced after those incidents.

It is right that the Government should have draconian powers available to them in those cases where terrorists, or those supporting them, are suspected  of engaging in a very wide range of activities which could support or further a terrorist outrage. I don't believe that any right-minded person would object to this statement.

However, they have an enhanced duty off care to ensure that these powers, which strike right at the very heart of our traditional civil liberties, are not abused or used in circumstances for which their implementation was not intended, because this is an abuse of both the provisions themselves, and the powers of Parliament which took significant risks in permitting such severe laws to be enacted.

So what possible actions were being perpetrated that justified this arrest and detention?

The arrested man David Miranda lives with Glenn Greenwald, a Guardian journalist. He  was returning from a trip to Berlin when he was stopped and detained.

While in Berlin, Miranda had visited Laura Poitras, the US film-maker who has also been working on the Snowden files with Greenwald and the Guardian. The Guardian paid for Miranda's flights.

A spokesperson for the Guardian said: "We were dismayed that the partner of a Guardian journalist who has been writing about the security services was detained for nearly nine hours while passing through Heathrow airport. We are urgently seeking clarification from the British authorities."

Schedule 7 of the Terrorism Act has been widely criticised for giving police broad powers under the guise of anti-terror legislation to stop and search individuals without prior authorisation or reasonable suspicion – setting it apart from other police powers.

Those stopped have no automatic right to legal advice and it is a criminal offence to refuse to co-operate with questioning under schedule 7, which critics say is a curtailment of the right to silence.

The government of Brazil issued a statement in which it expressed its "grave concern" over the detention of one of its citizens and the use of anti-terror legislation. It said: "This measure is without justification since it involves an individual against whom there are no charges that can legitimate the use of that legislation. The Brazilian government expects that incidents such as the one that happened to the Brazilian citizen today are not repeated."

"This is a profound attack on press freedoms and the news gathering process," Greenwald said. "To detain my partner for a full nine hours while denying him a lawyer, and then seize large amounts of his possessions, is clearly intended to send a message of intimidation to those of us who have been reporting on the NSA and GCHQ. The actions of the UK pose a serious threat to journalists everywhere.

"But the last thing it will do is intimidate or deter us in any way from doing our job as journalists. Quite the contrary: it will embolden us more to continue to report aggressively."

Labour MP Tom Watson said he was shocked at the news and called for it to be made clear if any ministers were involved in authorising the detention.

He said: "It's almost impossible, even without full knowledge of the case, to conclude that Glenn Greenwald's partner was a terrorist suspect.

"I think that we need to know if any ministers knew about this decision, and exactly who authorised it."

"The clause in this act is not meant to be used as a catch-all that can be used in this way."

"There is simply no basis for believing that David Michael Miranda presents any threat whatsoever to the UK government. The only possible intent behind this detention was to harass him and his partner, Guardian journalist Glenn Greenwald, for his role in analysing the data released by Edward Snowden."

And this may be where the really hidden danger inside this legislation lies. Under Section 58 of the Act it becomes an offence for anyone to collect certain information and it is this section which I suspect was used by the Police as their justification in detaining the journalist.

Section 58 states;

(1) A person commits an offence if —

(a) he collects or makes a record of information of a kind likely to be useful to a person committing or preparing an act of terrorism, or

(b) he possesses a document or record containing information of that kind.

(2) In this section “record” includes a photographic or electronic record.

(3) It is a defence for a person charged with an offence under this section to prove that he had a reasonable excuse for his action or possession.

I have no doubt that the weasel-minded lawyers employed by the masters of the Secret State could successfully argue that the information disseminated by Edward Snowden, might fall under this section on the basis that national secrets could presumably be useful to a terrorist, and thus bring the Journalist and indeed the Guardian into conflict with the law.

I am doubtful whether the argument of Journalistic freedoms would satisfy the 'reasonable excuse' definition within sub section 3, so there seems to be little that the Guardian or their journalists can do here in the UK.

This is clearly not what was intended when the law was introduced, but it is always a problem when the secrets of the State come into the public domain. Nothing infuriates a civil servant more than the secret information which they so jealously guard should fall into the hands of the mere members of the public who pay their wages. We do well to recall that the Official Secrets Acts were designed  not for the protection of State Secrets, but for State Officials!

This section was intended to apply to terrorist sympathisers who collate information or supply collateral support to the active cell. No-one ever imagined it would be used in the present situation. But yet again, the apparatchiks of the secret state have exerted their bullying tactics and abused a law in order to pressure a journalist to hand over embarrassing information.

We must hope that this law is reviewed quickly by the relevant Parliamentary committees and this provision re-defined, otherwise it will continue to be used to bring pressure on journalists in possession of information which the secret state would prefer it did not own!

What has happened to British Criminal Justice when it comes to tackling the big institutions?

In a searing blog entitled "...Britain is fast turning into a Banana Republic, wilfully blind to corruption..." ( http://www.ianfraser.org/britain-is-fast-turning-into-a-banana-republic-wilfully-blind-to-corruption/) my friend and fellow blogger, Ian Fraser, lays bare the hypocrisy and the double standards that are present at the heart of British corporate life.

On August 1st, the FRC announced the dropping of its probe into the failure of BAE Systems’s auditors, the notoriously useless KPMG, to raise the alarm, question, or  do anything at all about the massive commissions (= bribes) that its defence industry client was liberally handing to individuals and shell companies to smooth the path to the historic al-Yamama deal. The FRC’s excuse for dropping its three years probe? Apparently it would have meant delving too far back into the past. Of course, it didn’t mention that seven current and former KPMG partners and executives are among the FRC’s board directors and senior staff, including the likes of Peter George and Sir Steve Robson – so no conflict there, obviously..."

Ian goes on to  identify how "...the background to this is that the FRC launched an “investigation” into KPMG’s role as auditor and adviser to the London-headquartered defence and aviation giant in 2010, after BAE settled corruption probes in the US and UK. The FRC investigation was, perhaps conveniently, focused on audit and advisory work carried out by KPMG between 1997 and 2007. BAE Systems — farcically – settled with the UK’s Serious Fraud Office by admitting to a minor accounting charge relating to its activities in Tanzania, for which it paid the modest penalty of £30m. Tony Blair’s government was lampooned and lambasted as wilfully blind to corruption seven years ago after it successfully persuaded the SFO to drop its investigation into the al-Yamama deal on the grounds of “national security”..."

What this coruscating critique of an important regulatory body demonstrates so clearly is that the United Kingdom has become a regulatory banana republic when it comes to investigating the affairs of the powerful!

What has become very clear in recent years is that there are two distinct levels of engagement when criminality is concerned in the UK.

When it affects the lower classes or those whom society can afford to marginalise, then the requisite level of intervention can and will be sanctioned. People will be arrested, charges brought, judges will pronounce in magisterial tones and the prisons will welcome another hapless guest.

When it has some impact upon anyone in what could be termed 'the powerful class' for lack of a better phrase, then an alternative agenda can be observed. Investigations take longer and longer until it is felt that too much time has elapsed for a safe prosecution to be brought, as in the BAE case above! Alternatively papers can get lost (it's amazing quite how often this can happen)!

If you have any doubts about this assertion, examine the vast amount of organised criminality that has been committed by the big banks in the form of theft, fraud, money laundering, market manipulation, drug trafficking, sanctions busting et al!

Has any one director of any of these institutions been prosecuted or brought to book for these crimes which now amount to many billions of pounds worth of criminality?

No, of course not, and this is all part of a British disease which has infected the body politic and which will, in turn, demean our public standards to such an extent that we will become the laughing stock of the civilised world, (if we are not already in that category).

There is something pernicious about the way in which the British insist that their public life is regulated and governed. We are a nation capable of maintaining so many conflicting standards of probity while sensing no distinction between them, it marks us out as a country which is able to juggle levels of hypocrisy which transcend ordinary examples of mendacity.

I first encountered this when I helped to investigate the affairs of a commodity brokerage which had gone into liquidation at a time when this country had exchange controls. Its clients were all very wealthy British investors from an overwhelmingly upper-class background. They were in fact engaging in massive tax evasion, fraud and money laundering by siphoning money out of the country to anonymous Swiss accounts via a series of spurious futures transactions.

When the whole scam was uncovered and their names were in danger of getting into the public domain, the Director of Public Prosecutions suddenly saw fit to announce that there would be no prosecution of anyone involved in the case on the grounds that it was not in the 'public interest.'

This phrase has taken on the same absence of veracity as the phrase 'national security'!  Both can be trotted out at any moment and can be used to obfuscate a multitude of sins, and are equally unbelievable!

So a sector of the British public were protected from the implications of their wholly criminal conduct, purely because of their class, and the influence they were able to exert at the highest levels of national authority!

It is this element of 'influence' that so permeates the culture of our national psyche, and which makes us so susceptible to pressure from above. In the case of public servants, the influence of the number of putty medals, awards, knighthoods, ribbons, and other pieces of pointless frippery, permit a level of adverse influence far outside their normal expected range, to be applied.

Any civil servant knows that if they are to successfully receive their gong, they must toe the line. Stepping outside the accepted standard of acceptable behaviour is a sure and certain way to ensuring that your honour does not arrive!

I saw this so clearly when I had occasion to challenge a man called the Ombudsman, otherwise known as the Parliamentary Commissioner for Maladministration. I had referred an investor case to the Ombudsman in a case where the investor's investments which they were paying to the crooked adviser, were going straight into the coffers of the Inland Revenue who were squeezing the man hard for unpaid revenues.

He should have been closed down for his fraud, but every time the Government Department responsible for acting against him for fraud suggested moving against him, the Revenue vetoed the suggestion on the basis that he was coughing up unpaid and otherwise uncollectible revenue, so he was allowed to continue trading.

Perhaps unsurprisingly, I thought this was unconscionable behaviour on behalf of the Revenue and I referred the matter to the Ombudsman. I had previously been successful against Government Departments by using this referral tactic, so I was perhaps not surprised to find that the old Ombudsman ( a fair-minded and judicious lawyer) had suddenly been supplanted by a former Civil Servant, who again, unsurprisingly, found no maladministration.

I wrote some fairly scathing articles about this individual in which I pointed out his investigative failings. He wanted to sue for defamation, but it was pointed out to him that should he do so, and the court find that he had not acted judiciously, (which was a possibility), that it would mean the end to any hope he might have had of any kind of putty medal. So he chose to keep quiet instead and had to wait a while longer for his award. If I had got my way he would have received nothing at all.

My point is that it seems to me that there are far too many ways of influencing the decision making process in the UK in ways which are not necessarily in the public's best interest.

The Royal family can be an unconstitutional influencer of policy. I am not talking about the Queen who has a constitutional right to advise and guide, and who in every other way is punctilious about the use of her powers, no I am talking about some of the lesser members of the family.

Ian Fraser points out the undue influence of Prince Andrew.

"...You may remember that a few years ago it emerged that a “cocky” Prince Andrew appeared to welcome and endorse bribery and corruption — or at least that he abhors those who would seek to get in its way, including anti-corruption regulators and investigative journalists (by the way, we only know this thanks to the efforts of the recently convicted U.S. army private Bradley Manning, Wikileaks and The Guardian).

In an October 2008 U.S. embassy cable Tatiana Gfoeller, the U.S. ambassador to Kyrgyzstan, revealed that during a 2008 engagement at a hotel in the central Asian republic’s capital, Bishkek, a “rude” Prince Andrew — who for some inexplicable reason is a UK trade representative — attacked the Serious Fraud Office for what he called “idiocy”.

In the cable Gfoeller wrote: “Rude language à la British … [Andrew] turned to the general issue of promoting British economic interests abroad. He railed at British anticorruption investigators, who had had the ‘idiocy’ of almost scuttling the al-Yamama deal with Saudi Arabia.” The prince, she explained, “was referencing an investigation, subsequently closed, into alleged kickbacks a senior Saudi royal had received in exchange for the multi-year, lucrative BAE Systems contract to provide equipment and training to Saudi security forces”. The dispatch continued:

“His mother’s subjects seated around the table roared their approval. He then went on to ‘these (expletive) journalists, especially from the National [sic] Guardian, who poke their noses everywhere’ and (presumably) make it harder for British businessmen to do business. The crowd practically clapped.”

Whether we like it or not, a very large percentage of the British people like being seen in the company of members of the Royal Family, even boors like Andrew who seems to feel that he has some God-given right to be rude and offensive in public, as long as it is in the interests of 'British Trade'. We do well to remind ourselves of Dr Johnson's famous epithet that 'patriotism is the last refuge of the scoundrel'!

As Ian Fraser identifies; "...What I find disturbing is not just the behaviour of the oafish Andrew, it is that many of Britain’s regulators seem to share the Prince’s views. They either welcome corruption and collude with corrupt companies to help them cover up past wrongdoing, or are simply too lazy or frightened to bother tackling high-level fraud and corruption..."

We could easily say the same about financial regulators who find it so much easier to dish out fines for wrong-doing, all of which merely dilute the interests of the shareholders, than to take a principled view and bring criminal prosecutions for wrong-doing.

In fact, things have got to such a state that we can assume that as long as the institutions which reflect the interests of the powerful are subject to the present laws and regulatory oversight, there will be no interventionist activity which will threaten the interests of those in charge.

We are now a country where as long as you can have people of influence on your board, former senior civil servants in particular, you stand every chance of walking away from any allegation of wrongdoing.

What message this sends to other countries is anyone's guess. Presumably, when it comes to more lucrative arms deals with dubious Middle Eastern potentates, the bribes will continue to be paid, and British representatives will continue to receive their share of the largesse, secure in the knowledge that their accountants will not discover these payments in the accounts and the country's prosecutors will be leant on by the politicos if it all looks like coming unravelled.

Lessons in failure!

The United Kingdom-based Financial Conduct Authority has fined the UK subsidiary of the Guaranty Trust Bank over £500,000 for failing to do thorough anti-money laundering checks on its potential clients from high-risk countries.

Why has no-one inside this egregious banking institution been prosecuted for their repeated failure to comply with the money laundering regulations? It would have had far more effect and sent a much stronger message to the banking sector, but yet again, the FCA has bottled the opportunity.

The banking and financial scandals which have cost us all so dearly were the direct outcome of a culture of failure to understand how to regulate the business sector in a way which would have prevented the worst excesses from causing the damage which resulted.

I believe that this culture represents something quintessentially 'British', which believes that there is something special about the management of our important public affairs, by 'enthusiastic amateurs', people who are imbued with a certain kind of ethic which is instantly recognisable to those who manage the affairs of these organisations.

This culture seems to inform the British Civil Service Model, a sort of 'Good Chaps' syndrome, where almost any kind of required administrative ability can be safely left in the 'safe pairs of hands' of people who have no special skills or training, but who can be relied upon not to rock the boat or tell tales out of school if things go wrong.

For far too long, this 'cult of the amateur' has underpinned the way in which the financial sector has been regulated, and as I have observed many times, there appears to be a marked reluctance to engage in any form of prosecution, when the criminal law is broken.

This unwillingness to engage the criminal law is possessed of a very complex series of reasons and stimulii, but I have come to the realisation over the years, that it has a great deal to do with class. Criminalisation is something that we reserve for the dangerous underclass, for the 'criminal class' of society. Occasionally, where there is a danger that the actions of a specific individual might cause grave embarrassment to a specific element of that sector of society who might otherwise expect to be protected, we will resort to the use of the criminal law (Nick Leeson was an example), but generally, the financial sector class do not expect to be so confronted.

It is as was once said to me by a board member of Barclays Bank, "...We are a protected species..."

The problem is however, that without the recourse to the use of the criminal law and the power to criminalise, all too often the financial sector views the activities of the regulatory sector with a degree of benign contempt.

Banks and financial services enterprises can be subject to the criminal law, but they know that they are never going to be subject to its constraints, and so they feel comfortable in being able to ignore its requirements for as long as it suits them.

This, essentially, was one of the leading lessons we should have learned from the financial crisis, because what appeared to be all too often the leitmotif of the criminal activities of the banks was that they knew there was no danger of their being prosecuted for their wrong doing.

Even when the Banking Commission was engaged in its deliberations, Andrew Tyrie, the Chairman, would repeatedly ask 'why has no-one been brought to trial for these actions?'

Again, I have said this before, but the only way to ensure that any form of regulatory requirement is adhered to, is to find the influence which has the greatest impact upon the mind of the person required to comply, and criminalisation is the strongest influence that has any meaning for white-collar offenders.

That is why I am simply unable to understand why the new FCA is making all the same mistakes as its disgraced predecessor, the FSA, when it comes to dealing with regulated firms who are blatantly ignoring the requirements of the anti-money laundering regulations.

Examining the case of Guaranty Trust Bank, The FCA said that between May 2008 and July 2010, the bank had failed to assess potential money-laundering risks, screen customers against sanction lists, establish the purpose of the accounts being opened in their London branch or review the activity of “high risk” accounts, Reuters’ report said.

Guaranty Trust Bank opened a UK office in 2008 offering retail and wholesale banking to private and corporate clients, according to the regulator.

Specifically, the FCA said in a statement that it had levied a £525,000 fine on the UK subsidiary of the bank after it looked at the bank’s systems as part of a wider review into anti-money laundering controls among banks.

A similar report by the Financial Times quoted the regulator as saying that the bank was not rigorous enough in pressing potential customers on their sources of wealth.

So, for two years, this Nigerian bank had completely failed to address the issue of the potential for criminal wrong-doing by its clients. The Bank had failed to do any of the most important steps mandated by law to prevent money laundering.

This wasn't a minor accident, or a slight oversight, this was a concerted and deliberate business-case policy decision, a specific refusal to obey the law, undertaken at a time when the bank would have known full well what its legal obligations were and why they were required to provide them.

This was a bare-faced two fingers to the regulatory agency from a bank with a higher-than-normal likelihood for high-risk clients, and still the FCA has done nothing about prosecuting the bank or its directors for their egregious failures.

It gets worse. The bank failed (refused) to press a client, who was a so-called politically exposed person “wanted by the UK authorities in connection with laundering millions of dollars of embezzled public funds”, on the ultimate source of a cheque for £500,000 that he deposited from an offshore account, according to the regulator’s final investigative report.

Excuse me, sorry, but let us be clear on this point, the bank were willing to entertain a client who was already in a high-risk category (a PEP), and who was on the run from the UK authorities and wanted for money laundering! This fugitive from British justice had an account with the bank, but they hadn't pressed him on the ultimate source of of £500,000 of funds coming from an offshore account?

Now, this may just be my suspicious mind, but I would have thought that under these circumstances, this would be sufficient evidence to  begin an immediate investigation into a possible charge of money laundering against the bank! There is also enough evidence to charge an offence of failing to make a suspicious disclosure, I mean what happened to these offences, doesn't anyone enforce them any more?

The regulator, in its exercise of fearless regulatory action however, declined to identify the individual concerned!

The Nigerian authorities in 2007 named GTB’s parent bank, the first African bank to list in London, as one of two banks used by the former Governor of Delta State, James Ibori, who was found guilty of money-laundering and fraud worth £50m last year at Southwark Crown Court and sentenced to 13 years, following an investigation and prosecution by the UK authorities.

The UK regulator and its predecessor, the Financial Services Authority, have made anti-money laundering controls a priority over the past two years as tighter directives from Europe and new UK anti-bribery legislation have taken effect.

However, until such time as breaches of the Money Laundering Regulations are more rigorously pursued and prosecuted by the FCA, then the financial sector will gain increasing comfort from the knowledge that the regulator intends to do very little to impose the law on money laundering, and it will continue to be ignored.

Barclays Bank - Bare-faced hypocrites!

Barclays Bank have informed Somali money transmitter, Dahabshiil that Barclays will no longer allow customers to send money to Somalia via Dahabshiil. A well-known financial entity in Somalia, Dahabshill describes itself as “the most trusted money transfer company for many immigrants willing to support their families and friends.”

But global anti-terror laws hold banks – like Barclays – responsible if they transfer money to criminal or terror elements, without taking the necessary steps to ensure that their systems are not being used for criminal purposes! As a result, fewer are willing to send money into countries like Somalia.

These global anti-terror laws are part of the same anti-money laundering laws which require global banks to take a wide series of measures to ensure that the money they are transmitting does not fall into terrorist hands.

The vast majority of these laws are routinely ignored by British Banks as has been consistently reported by this blog and corroborated by official findings by the UK regulatory agencies. Suddenly however, Barclays Bank have become very sensitive about a business proposition they have been engaged in for many years with Dahabshiil.

Thousands of ex-pat Somalis living in the UK send money home to their families to help them survive. The money is deposited in Sterling in one of Dahabshiil's many branches in the UK. They routinely transfer this money to their account in Barclays Bank, and the money is then transferred by Barclays to Dahabsill's office in Mogadishu. There the money is collected by Somali citizens in US dollars, and then taken to street traders to be converted into Somali Shillings.

This is not the only means of remitting money to Somalia available to Somali's living here. They could take their money instead to an 'alternative remittance' trader or 'Hawala' broker. These brokers exist in every ex-pat community and will transfer money cheaply and safely for ex-patriot people, but since 9/11 these 'underground remittance men' have been treated with huge suspicion by the relevant authorities, because their methods leave no records and there is no trace of the monies transferred, so their use has been hugely discouraged.

Thus people wanting to transfer money legally and transparently, use the facilities offered by firms like Dahabshiil, because their relationship with a correspondent bank like Barclays means they have an audit trail for every transaction.

A study released earlier this month by the Food Security Nutrition Analysis Unit for Somalia, a project by the United Nations' Food and Agriculture Organization found yearly remittances to Somalia to be a minimum of $1.2 billion per year. The aid group Oxfam said that soon to be published research shows that Somali immigrants in the U.K. alone send more than $154 million back to Somalia each year, behind only the U.S.

The big question is that when a bank transfers money to Somalia, how can it be sure it’s not sending money to terrorists? That question is now allegedly forcing Barclays to cut ties with the largest cash transfer bank in Somalia, a company that brings in the majority of the country’s $1.2 billion in yearly remittances.

Many in Somalia are in desperate need of money. Payments from family and friends overseas are how many get by, and that’s why more than 100 aid workers and Somalia experts signed a letter this week pleading with the British government to find a solution.

Barclays issued a very po-faced, holier-than-thou statement about this issue!

Barclays told Dahabshiil the move was "a commercial decision due to the risks of the sector in which you operate".

"The decision to exit our business relationship with you is not a negative reflection of your anti-money laundering standards, nor a belief that your business has been unwittingly been a conduit for financial crime," Barclays wrote in a letter sent to Dahabshiil.

Barclays is the last major British bank to still provide such money transfer services in Somalia.

 “...It is recognized that some money service businesses don’t have the proper checks in place to spot criminal activity and could therefore unwittingly be facilitating money laundering and terrorist financing,” Barclays said in a statement. “We want to be confident that our customers can filter out those transactions, because abuse of their services can have significant negative consequences for society and for us as their bank...”

The Guardian reports that other British banks are exiting this sector.

"... Barclays's decision follows the imposition of a $1.9 billion fine on HSBC last year by the US authorities for poor money laundering controls. HSBC said last autumn it would get out of the money-service sector entirely. .."

Yes but hold on just a tad, that fine was for running a money laundering operation for Mexican drug mafiosi, and had nothing to do with getting all delicate about small workers remitting a few bucks to their families to keep them alive. Trust a British Bank to twist the truth when it comes to explaining a policy decision!

For all the campaigning, Barclays seems resolute. Earlier this month the bank said the onus must be on firms to show they have sufficient safeguards. "We remain happy to serve companies who have strong anti-financial crime controls, but are asking the others to find another bank."

Abdirashid Duale, chief executive of Dahabshiil, noted that his company is one of a number of transfer businesses affected by of Barclays’ decision.

“Naturally, Dahabshiil is appealing this decision and would like to emphasize that to date Barclays’ has acknowledged that our Anti-Money Laundering and Anti-Terrorist Financing policies are fully compliant with industry regulations,” he said.

It is not often that I get the chance to be able to confirm facts which are within my own knowledge, but I can say with some certainty that Dahabhiil are, or certainly used to be one of the most compliant banking institutions who do business in this area of the world.

How do I know?

Because I used to undertake their annual compliance training reviews and lectures when I was working for one of the UK's leading Compliance Consultancies, MHA Consulting.

On a number of occasions I would visit a training forum, usually in the East End of London, where all Dahabshiil's bank representatives from all over the UK would be gathered for a 2-day training and compliance refresher course.

We would routinely go through their very comprehensive compliance manual, reminding ourselves of legal compliance obligations; discussing the latest laundering methodologies; examining case studies from both inside and outside the institution and generally making a complete root and branch review of AML compliance systems and controls. At lunchtime, we would all sit together and eat one of the best lamb curries it has ever been my privilege to eat.

These guys knew their business and they knew the risks they were faced with and they made damned sure that their staffs were fully briefed with the best and most up-to-date evidence available to ensure that they were taking their responsibilities seriously and were operating legally in a compliant atmosphere.

This was an awful lot more than most British banks were doing at the same time.

OK, things might have changed, what was a culture of complete compliance might have become a fast and loose criminogenic enterprise, but I don't think so. These guys knew how easy it would be for the UK regulators to take them down if they stepped out of line, so they made very sure that they were squeaky clean.

'Dahabshiil',  Abdirashid Duale said, 'remains operational while it explores alternative banking arrangements', but it must know that if they cannot find an alternative remitter, their clients may be forced to use the Hawala brokers instead.

A group of aid workers and researchers said the decision at stake here “is a lifeline that provides essential support to an estimated 40 percent of the population of Somalia.” The group said it has seen firsthand the impact remittances have on families in the Horn of Africa.

“My son is in the U.K. He sent us money every month for our sustenance and school fees for the children. Where are we going to get the money to pay our bills?” said Dahabo Afrah, a longtime customer of Dahabshil in Mogadishu. “This is unfair to us and will affect hundreds of thousands of Somali people.”

As I said before, Barclays said it remains happy to maintain a relationship with businesses that have anti-financial crime controls.

And here, I think lies the real answer!

That £154 million a year in remittances to Somalia remains a juicy plum! At the moment, Barclays earns a small remittance fee for each transfer, which nets them a nice commission. But if they could get those Somali clients to open bank accounts with Barclays, then Barclays could have all the business for themselves, and would be able to do all the business with someone else whose systems they 'preferred'!

Of course this could be mere sophistry, and it may not have occurred to Barclays!

Yet, Barclays do business all over the world in countries where there are equal terrorist concerns, like Pakistan for instance. Pakistan is one of the leading countries of concern for terrorist money laundering as well as drug money laundering and other forms of business corruption. This doesn't appear to have put Barclays off dealing with them!

Nor have they evinced any problem doing business in Dubai, once described by the Americans as the "...epicentre of terrorist financing.."

This is the bank that has been involved in every kind of financial criminality going on in the present dysfunctional market.

They have been hauled over the coals for PPI fraud; they have engaged in other forms of interest-rate product fiddling; a few years ago, a subsidiary of Barclays – Barclays Private Bank – was exposed as having been used to launder drug money from Colombia through five accounts linked to the infamous Medellín cartel. By an ironic twist, Barclays continued to entertain the funds after British police had become involved after a tip-off, from HSBC. They have been fined for their part in the LIBOR rigging, and more recently, Barclays and four of its traders have been fined a total of $488m (£322m) for manipulating the energy markets in the United States.

So, for Barclays to say that they cannot continue to do business with Dahabshill for fear of engaging in  financial crime is frankly the height of fucking hypocrisy.

Why are we not surprised!