Hawala funds piracyNovember 1, 2011
Temporarily shelved, but not totally forgotten; from the Economic Times in August:
Hawala channels used to fund sea piracy ransom ops: FATF
NEW DELHI: The ‘hawala’ route of illegal money transactions is being used to pay ransom for rescuing ship crews from pirates, including those from Somalia, the top global body setting standards for combating terror financing and money laundering has said in its latest report.
In its latest report – Organised Maritime Piracy and Related Kidnapping for Ransom, Financial Action Task Force (FATF) – has also found that almost Rs 36 crore has been paid as ransom money to Somali pirates since 2006.
The report warns that countries and regimes have to wake up to strengthen measures of anti-money laundering and counter-terror financing while “identifying and pursuing” piracy for ransom cases.
India has been at the forefront of anti-piracy operations in its territorial waters and beyond, especially in the Indian Ocean region.
“Airdrops appeared to be the preferred means of delivering ransoms but there was also evidence that ransom payments were transferred through banks, intermediaries, and alternative remittance systems such as hawalas,” the first-ever report on identifying and tracing money flows stemming from piracy, said.
A senior financial intelligence official from an elite department under the Finance Ministry, however, said they are still to detect any instance of ‘hawala’ funding in sea piracy ransom incidents in the country, but they are “alive” to such instances.
“Ransom payments are often, but not always, paid in the form of physical cash. As learned in the case studies, the ransoms can be air-dropped into waters in the hijack area, or can be hand-delivered to an intermediary who subsequently passes it on to pirate groups,” the report said underlining ‘hawala’ transactions.
Recall, the payment of such ransoms is prohibited by international law, U.N. Resolution 1904, and hawala is already illegal in India.