Here's the problem:

• Ethiopia, who is supplying troops, armoured vehicles and fighter aircraft in support of the legitimate Transitional Government of Somalia, is itself supported by the United States.
• The government's major opponent, the Islamic Courts Union, or Union of Islamic Courts, is believed to be receiving military, financial and ideological support from Al-Qaeda, as well as radical Islamic fighters from  terrorist organisations located in several Middle Eastern countries.
• Eritrea, a longtime enemy of Ethiopia, is supporting the Islamic Courts.

So, funds transfers in support of arms purchases for the Transitional Government that pass through Ethiopia may be acceptable for the US, but NOT for the EU or United Nations.

Conversely, arms shipments paid for through your bank and shipped to Middle Eastern countries other than those located on the Horn of Africa could end up in Somalia being fired at what amounts to the functional equivalent of a US ally in the global war on terrorism. Do you think that US regulators will hesitate before levying unconscionably high fines and penalties on those regional banks that are exposed as participants ?

Lastly, Will the US impose sanctions on Eritrea ? This problem has a potential for seriously damaging careless financial institutions that are not carefully monitoring their weapons trafficking and shipping clients sending anything tactical into the region, and who have an understanding of the geopolitics of the area. You are also familiar with the autonomous regions of Somaliland (Hargesa) and Puntland, are you not ?

Compliance officers not alert to the complexities of the Somali financial situation might also need to know that the Somali banking structure is itself virtually non-existent, due to the fifteen-year civil war, and most funds move inbound through a web of  thinly regulated MSBs, many of which are headquartered in Dubai, with little effective oversight. These MSBs have a long history of activity in Somalia.

This difficult problem requires a detailed risk assessment should your bank be involved in the region, even if its participation is limited to funds transfers. The risks may outweigh the benefits.