Posts Tagged ‘piracy’

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Italy paid $500K ransom to Somali pirates

October 13, 2015

A separate report from Al-Jazeera claims that Italy has also paid a multi-million dollar ransom to al-Nusra Front in Syria.

Informative reports, but it’s not just Italy that misleads the public about paying ransoms to villains and terrorists.  Many, if not most, European governments facilitate the payment of such ransoms.  We used to call it “funding both sides of the conflict.”  It causes wars to last longer.  European diplomats act like they are contributing to world peace, but their government-backed ransom payments are just prolonging the pain and strife.

From The Guardian on Oct. 8:

Italian intelligence lied about hostage rescue to hide ransom payment

Leaked document shows Italy made up story about 2012 rescue of Bruno Pelizzari and Debbie Calitz to hide ransom payment

Italy’s intelligence service helped concoct a false story about a rescue of hostages by security forces to hide a ransom payment, according to a leaked spy agency document.

The payment was made for the release of Bruno Pelizzari, an Italian, and South African Debbie Calitz, who were taken by Somali pirates in 2010 and released in 2012.

The document marked “secret” says the Italian intelligence agency AISE paid a ransom of $525,000 (£346,000). “To conceal the payment of the ransom, AISE, SNSA (Somalia’s national security agency) and the hostages agreed to inform the media and public that the release of the hostages was the result of a successful rescue operation by the Somali security forces.”

The document highlights the contradictions in the international response to kidnapping. Both the US and UK governments refuse to pay ransoms, but other European countries have a more ambiguous approach, routinely making payments while publicly denying it.

The Italian government response to the case of Pelizzari and Calitz reflects the confusion and obfuscation…

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Financial war on terror news: suggested reading

November 27, 2014
  • “No doubt” that halal certifiers fund extremism, says member of parliamentmore>>
  • ISIS wants to mint its own coins—not for practical, economic reasons—but to impose sharia lawmore>>
  • How to defend against piracymore>>
  • Fresh analysis puts cold water on claims that looted antiquities are ISIS‘s 2nd biggest revenue source… more>>
  • The fine line between paying informants for intelligence and paying ransoms to terrorists just got fuzzier… more>>
  • Yusuf Qaradawi, the world’s most prominent sharia finance advocate, calls on Muslims to take arms against Israel… more>>
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UAE: ISIS licking chops over vital sea channels

November 20, 2014

Threats to key choke points like the Strait of Hormuz from a joint venture between al-Shabaab and the Islamic State of Iraq and Syria (ISIS) are possible according to the foreign minister of the United Arab Emirates.  The UAE foreign minister’s comments are being construed somewhat narrowly as a warning that ISIS could engage in piracy with al-Shabaab. But that overlooks the wider influence that al-Shabaab wields over shipping, controlling Somali ports and exacting taxes on illegal charcoal exports to the Arabian peninsula.  In other words, al-Shabaab could help ISIS undermine freedom of the seas not just through piracy, but through smuggling and illicit business relationships with Gulf states.  The foreign minister’s warnings should be read within that wider context.

From DefenseNews (h/t El Grillo):

…On Oct. 29, UAE Foreign Minister Sheikh Abdullah bin Zayed al-Nahyan raised the piracy concerns, calling for the international community to be more vigilant regarding new threats at the fourth UAE Counter Piracy Conference in Dubai.

“As groups like Daesh [Islamic State] develop ties to criminal networks and arms networks like al-Shabab, it is essential that we prevent them from expanding their operations into the sea and threaten vital channels such as the Strait of Hormuz, the Red Sea, Bab al Mandab and the Gulf of Aden,” he said.

“The nexus of criminal groups, violent extremists, and weak states will require a coordinated response from governments and the private sector,” he said. “We have to ask ourselves these questions and prepare ourselves in case a union of [the Islamic State group] and al-Shabab occurs”…

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Police: Lebanese expat transferred $50K-$200K per deposit to fund terrorist training

January 29, 2013

http://infosurhoy.com/cocoon/saii/xhtml/en_GB/features/saii/features/main/2013/01/24/feature-01

Hezbollah banks in Syria and Turkey received proceeds from Wassim el Abd Fadel’s CD and DVD pirating scheme along with cocaine trafficking profits according to Interpol and Paraguayan police.

Read the rest of this entry ?

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Piracy still a viable business model

January 4, 2013

It is remarkable that “In the past six months, there has been no successful hijacking of a merchant vessel off Somalia.”  This is thanks largely to more armed guards on merchant vessels and the presence of NATO forces.

Yet, warns the NATO commander, “the business model is still intact” for Somali pirates, who have soaked corporations, insurance companies, and their governments of hundreds of millions of dollars.  The opportunity here is to build on recent successes and bring the Somali pirates to their knees once and for all.  It’s not the time for the NATO fleet to sail home yet.

From Reuters:

World must not let up pressure on Somali pirates – NATO

By Adrian Croft

BRUSSELS | Mon Dec 17, 2012

(Reuters) – Pirate attacks off the coast of Somalia have dropped sharply this year but piracy remains a viable “business model” and could bounce back if international naval forces in the region are cut back, the outgoing commander of the NATO mission said on Monday.

Hijackings of ships in a vast area of the Indian Ocean off Somalia have dropped to seven in the first 11 months of this year compared to 24 in the whole of 2011, although Dutch Commodore Ben Bekkering said 136 hostages were still being held.

In the past six months, there has been no successful hijacking of a merchant vessel off Somalia, said Bekkering, who has handed over command of NATO’s Ocean Shield anti-piracy force to Italian Rear-Admiral Antonio Natale.

Pirates operating from the Somali coast have raked in hundreds of millions of dollars in ransoms from hijacking ships, leading NATO, the European Union and other nations to dispatch warships to patrol the area.

Merchant ships responded with tighter security measures, including greater use of private armed security guards.

Bekkering attributed the decline in piracy to the naval patrols, the heightened security on the merchant ships, putting suspected pirates on trial outside Somalia and the Somali authorities’ counter-piracy campaigns.

Some pirates had abandoned their camps, seeing them as too risky, and taken refuge in villages, he said.

But the gains in fighting piracy were reversible if the world’s navies eased up on their efforts, he said.

“I am convinced, if navy ships would disappear, the piracy model would still be intact,” he told a news conference.

“Yes, they don’t deploy that much to sea but the leadership of the piracy is still there and if they hold their breath for a little while and nations (take) their navy ships back, I am pretty sure that the business model is still intact.”

HOSTAGES

The financial crisis has led many Western countries to slash their defence budgets, but Bekkering said he saw no sign NATO nations’ commitment to the anti-piracy operation was waning.

In March, the alliance extended its counter-piracy mission until the end of 2014.

Bekkering said about 16 to 18 ships from all international forces were on patrol in the Indian Ocean at any one time and this was the “bare minimum” needed to patrol such a vast area.

Pirates are still holding five ships with 136 hostages of various nationalities…

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The risks of paying ransoms to pirates

March 7, 2012

From the February edition of Anti-Money Laundering Magazine, a very good article by its editor Joy Geary (who incidentally was one of this blog’s first readers)…  Internal citations are omitted:

Murky seas—The pirate, the ship owner, the intermediary and the financial institution

Maritime piracy is a lucrative criminal activity: almost all ransom payments are in the form of physical cash. That cash, usually US dollars, must be transported from financial institutions to the pirates. It is at this point that AML/CTF controls seem to be breaking down, particularly in the countries where the cash is sourced.

Border controls for movement of cash seem to be ineffective in detecting these cash movements. Once a ransom is paid, it is difficult to determine how the money is laundered given the infrastructure constraints of the countries where the pirates are based. Ship owners and insurers are not motivated to co-operate with anti-PFR efforts; they seek the easiest path to getting their vessel and crew back in service.

The FATF recently published a report summarising a body of work undertaken on organised piracy for ransom (PFR) and kidnapping for ransom (KFR). The PFR work focused on the financial implications of piracy as a major revenue-generating offence, and the KFR work looked at the significance of revenue generated by KFR for terrorist groups and criminal organisation and the role played by the formal financial sector.

This article looks at issues for financial institutions arising from PFR. Much of what is said about those issues applies to KFR.

The financial impact of PFR has grown exponentially and led to the deployment of flotillas of warships near Somalia, the Gulf of Aden, the Indian Ocean and the Arabian Sea. PFR increases shipping costs, inflates insurance premiums, interferes with commerce on the high seas, and causes threats to the safety of human lives and property. In the case of Somalia, the impact is severe with shipping of vital commodities such as food and medicines on the decline because of the risks to shipping trying to reach the country.

The World Food Program (WFP) uses a navy escort to reach Somalia and despite agreements by the pirates not to attack WFP ships, they continue to do so. Fishing has dropped by 30 percent in the coastal waters off Somalia because the fishermen are frightened of piracy. Pirates select their targets using carefully gathered intelligence regarding the vessel’s size, the wealth of its owners and the nature of its cargo.

On the upside, there is a housing boom in an area home to many pirates in Somalia and the price of marriage dowries is believed to have increased. Both of these have been linked to the success of PFR. On the flip side, corruption is on the increase because the pirates have more money than the government.

PFR is not a drug trafficking issue: no contraband is moved, no illicit market serviced. Rather, it is a violent, acquisitive crime.

Read the rest of this entry ?

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How ransoms are paid to Somali pirates

December 11, 2011

Ever wonder about the exact logistics of the payments that shippers, insurers, and governments make to effect the release of hostages and cargo?  Rick MacInnes-Rae from CBC Radio’s Dispatches spoke with author Jay Bahadur on Thursday for the details in this 1 minute long clip:

If the West had spines of steel instead of spines of spaghetti, we’d be air dropping bombs onto the decks of the ships rather than bags of money.

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Hawala funds piracy

November 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.

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Paying ransoms lands pilots in jail

July 4, 2011

An American and three Britons have been sentenced to 15 years in a Somali prison for illegally bringing in money to pay ransom to pirates.  Sympathies are naturally felt for the pilots for what seems like excessive sentences.

But the sad and harsh truth must be stated regardless:  Americans and Europeans should not be paying ransom or delivering payments to jihadi Somali pirates in the first place. It inflates the ransom market and increases the odds that Western traders and travellers will be abducted.

Paying such ransoms also violates U.N. Resolution 1904.  Countries like Algeria have begged for stronger enforcement of international law on this point because payment of the ransoms is funding terrorism within their borders.

A cautionary tale from Reuters (h/t Rantburg) on June 19:

Somalia jails Britons, American over pirate cash

A Somali court has jailed six foreigners including three Britons and an American for illegally carrying millions of dollars into the country to pay ransoms for the release of vessels held by pirates.

Authorities in the Horn of Africa country, where a lack of effective central government has allowed piracy to boom off its shores, seized two aircraft carrying $3.6 million in the capital Mogadishu late last month.

“We sentenced the two pilots, who are American and British nationals, to fifteen years imprisonment and a $15,000 fine each,” the Mogadishu court’s judge Hashi Elmi told Reuters late on Saturday.

The charges were illegally bringing money into the country, carrying cash intended to pay ransoms and landing in Mogadishu without the correct papers.

The four others, among them two Kenyans, were handed ten years jail terms and fines of $10,000 each, Elmi said. The cash and two aircraft were now the property of Somalia’s government, he added.

Maritime piracy costs the global economy up to $12 billion annually and has spawned numerous private security businesses offering armed protection for vessels and conducting ransom drops.

Cash ransoms are usually dropped onto captured vessels from light aircraft.

It was the first time Westerners have been sentenced for involvement in ransom payments. Elmi said the six might be able to buy their freedom.

“The men can appeal and if they ask to pay more instead of (remaining in) prison then we shall see and take our decision,” Elmi said.

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Lloyds assures it insures no terror

June 26, 2011

English whorehouse Lloyds of London will fight the assertion that their insurance claim payouts fund terrorism.  However, it is difficult to understand how paying a ransom to a terrorist on behalf of a insured client who has been abducted does not fund said terrorist.

Insuring against the ransoms of the sea jihad has turned out to be quite lucrative for the insurance salesmen and pirates.  Piracy insurance also enables governments to relieve themselves from the unseemly public spectacle of negotiating with or paying terrorists with tax dollars.

The piracy insurance boom is a logical outcome of the sea jihad, and the blame should fall mostly on the jihadists themselves.  But lets not kid ourselves about who is being enriched when ransoms are paid.

From Bloomberg on June 17 (h/t The Terror Finance Blog):

Underwriters at Lloyd’s of London, the world’s oldest insurance market, are reviewing the assertion of a U.S. lawmaker that ransoms paid to Somali pirates may fund a terror group, which would stop insurers covering the costs.

Kenya’s government estimates 30 percent of the ransoms are channeled to al-Shabaab, Representative Ed Royce said at a meeting of a subcommittee of the House Committee on Foreign Affairs on June 15, according to a transcript on Bloomberg. Al- Shabaab is described as a terror group with links to al-Qaeda by the U.S.’s National Counterterrorism Center.

“We would not necessarily be able to indemnify ship owners if they paid a ransom to a terrorist group, if that turns out to be the case,” said Neil Roberts, the senior executive for underwriting at the Lloyd’s Market Association in London. “If they can’t get their ship or crew out they may have to decide on re-routing, with implications for costs that would be passed on to the wider economy.”

Somali pirates attacked 154 ships this year and hijacked 26 vessels as of June 13, according to data from the International Maritime Bureau’s Piracy Report Centre. Ransoms rose 36-fold in five years, averaging $5.4 million a ship, and hijackings reached a record last year, according to One Earth Future Foundation, a non-profit group based in Louisville, Colorado.

Al-Shabaab commanders have spoken of a “sea jihad” and opened an office to coordinate with pirates, Royce told the hearing this week, according to the transcript. Royce, a California Republican, is chairman of the Terrorism, Nonproliferation and Trade Subcommittee.

Piracy costs ship owners an estimated $160 million a year in additional insurance expenses, Roberts said. The U.S. bans ransom payments to pirates, while the U.K. bars giving money to terror groups, he said. There have been an estimated 130 ransoms paid to pirates since 2005, Roberts said. The association represents underwriters managing gross premium income of 23 billion pounds ($37 billion).

Pirates increased attacks seven-fold between 2007 and 2010 and doubled their area of operation to cover 2.5 million square nautical miles, according to Royce.

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Link teases

June 9, 2011

• Welcome to America. Yes of course you can continue funding the Iraq insurgency from your new home in Bowling Green… more>>

• Having worked in Muslim Bengal under the British raj, Dr. Mookerjee knew what the future held for India’s Hindus: conversions, jizya, or death… more>>

• Brother Galloway, so good of you to come to Beirut to meet with us! Your check can be made out to Palestinian Islamic Jihadmore>>

• The pusher is dead. The addict is in withdrawals. The end of bin Laden could force Abu Sayyaf into rehab… more>>

• With enough “ransom, tribute, or baksheesh,” jihadi piracy could create a maritime calamity. Think USS Cole meets Exxon Valdez… more>>