Impact of the Regulatory Environment on Refugees’ and Asylum Seekers’ Ability to Use Formal Remittance Channels

Leon Isaacs, Sarah Hugo, Gemma Robson, Charlie Bush, Poppy Issacs, Iñigo Moré Martinez

KNOMAD Working Paper 33, July 2018


This report examines the impact of regulations and regulatory policies on a refugee’s ability to send and receive formal, cross-border remittances, drawing on seven country case studies (Denmark, Ethiopia, Germany, Jordan, Saudi Arabia, the United Kingdom, and the United States). The analysis covers both regulations related to refugees’ legal status (including their right to open bank/financial accounts, obtain IDs, travel, obtain housing, work, etc.), as well as the regulatory environment for sending and receiving remittances, especially barriers that are specifically relevant for refugees to access formal remittance services, including anti-money laundering and counterterrorism financing regulations (AML/CFT). The authors find that:

  • The main challenge for refugees and asylum seekers is lack of access to formal remittance services because they don’t have the necessary forms of identification or because of their legal status. They may face additional impediments such as limited Internet or mobile connectivity, and lack of freedom of movement.
  • There are very few remittance service providers facilitating money transfers to the required destinations, due to de-risking activities by banks in the past five years. Those providers that do serve countries considered high-risk or subject to sanctions, face impediments to opening bank accounts.
  • There is little information on refugee and asylum seeker remittance needs, and a lack of data on remittance flows, volumes, access points, and channels.
  • Enabling refugees to use mobile money can act as a gateway to financial inclusion.
  • In the seven countries covered by this report, there are no specific regulations (or mentions within regulations) on remittances made by refugees and asylum seekers. There is also poor interpretation at the local branch level of the limited regulations and guidance.

The authors make several recommendations to address these challenges including:

  • Put greater focus on issues of remittances and refugees, through further research, evidence-based policy making, and product design.
  • Enhance regulatory guidance on remittance services for refugees, and raise awareness about these regulations among relevant staff of financial service providers.
  • Ensure that government departments dealing with AML/CFT work closely with regulators on issues of asylum seekers and refugees, to address and clarify contradictions and gaps in the regulations.
  • Expand refugees and asylum seeker access to basic bank accounts and/or mobile money accounts.
  • Take account of existing guidance in countries where transaction or mobile accounts may become (or are already) more prevalent than bank accounts.
  • Provide training on remittance services to refugees and asylum seekers.
  • Consider using or developing new forms of identification for asylum seekers and refugees.