DETAILED RECOMMENDATIONS TO REDUCE AND MANAGE RISK AT THE ‘LAST MILE’ OF THE UK-SOMALIA SAFER CORRIDOR PILOT

This report recommends establishing a Trusted Third Party (TTP) system and a biometric-based recipient registration process to manage AML/CFT risks in the UK-Somalia remittance corridor. It proposes a pilot phase in 2015 involving 500 customers to test these mechanisms, which include contactless cards and TTP-led audits of Money Service Businesses (MSBs) to ensure the legitimacy of fund disbursements in Somalia.

• Remittances are critical to Somalia's economy, with an estimated US$1.3 billion sent annually by the diaspora, representing approximately 50% of the country's Gross National Income (GNI) and 80% of its investment. About 40% of the population, or 3.4 million people, depend on these funds for basic needs.
• The 'crisis in remittances' was caused by banks becoming risk-averse regarding fragile corridors due to AML/CFT regulations and high-profile enforcement fines, leading many banks to close accounts held by Money Service Businesses (MSBs) serving the UK-Somalia corridor.
• Consult Hyperion recommends a registration process for Somali fund recipients involving identity documents from recognised authorities and the issuance of a contactless card. This card, combined with biometric authentication and an NFC-enabled tablet, would be used to verify identity and track transaction patterns.
• The report proposes the establishment of a Trusted Third Party (TTP) system to track transactions from the UK sender to the Somali recipient. The TTP would assign risk ratings to transactions based on the completeness of information and the MSB's adherence to KYC/CDD practices, though it would not directly block withdrawals.
• To ensure compliance, the TTP would conduct regular audits of MSB KYC/CDD processing, provide support to agents, and perform 'secret shopper' testing. These activities would influence the risk scoring of the MSB agents' transactions.
• The proposed pilot design suggests a six-month initial phase starting in the first half of 2015, involving approximately 500 customers across one urban and one semi-rural location in Somalia.
• A significant risk identified is that MSBs operate as 'closed loop' services, which could lead to under-reporting of transactions to the TTP. A proposed mitigation is for UK settlement banks to only clear transactions up to the value recorded in the TTP.
• The report notes unresolved concerns regarding the safety of using tablet devices in Somalia and the cultural acceptability of taking identification photographs of women.

APA

Makin, P., Clark, D., & Lonie, S. (2015). DETAILED RECOMMENDATIONS TO REDUCE AND MANAGE RISK AT THE ‘LAST MILE’ OF THE UK-SOMALIA SAFER CORRIDOR PILOT. FSD Africa. https://fsdafrica.org/wp-content/uploads/2025/05/15-01-30-Safer-Corridor-Pilot-Service-Description-Executive-Summary.pdf

Chicago

Makin, Paul, Dick Clark, and Susie Lonie. DETAILED RECOMMENDATIONS TO REDUCE AND MANAGE RISK AT THE ‘LAST MILE’ OF THE UK-SOMALIA SAFER CORRIDOR PILOT. FSD Africa, 2015. https://fsdafrica.org/wp-content/uploads/2025/05/15-01-30-Safer-Corridor-Pilot-Service-Description-Executive-Summary.pdf.

Wikipedia

{{cite report |last1=Makin |first1=Paul |last2=Clark |first2=Dick |last3=Lonie |first3=Susie |title=DETAILED RECOMMENDATIONS TO REDUCE AND MANAGE RISK AT THE ‘LAST MILE’ OF THE UK-SOMALIA SAFER CORRIDOR PILOT |publisher=FSD Africa |date=30 January 2015 |url=https://fsdafrica.org/wp-content/uploads/2025/05/15-01-30-Safer-Corridor-Pilot-Service-Description-Executive-Summary.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{makin2015detailed, author = {Makin, Paul and Clark, Dick and Lonie, Susie}, title = {{DETAILED RECOMMENDATIONS TO REDUCE AND MANAGE RISK AT THE ‘LAST MILE’ OF THE UK-SOMALIA SAFER CORRIDOR PILOT}}, institution = {FSD Africa}, year = {2015}, month = jan, url = {https://fsdafrica.org/wp-content/uploads/2025/05/15-01-30-Safer-Corridor-Pilot-Service-Description-Executive-Summary.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }