New report tracks ransom cash resulting from African piracy

~~By Jim Kouri~~

The report, titled "Pirate Trails," was a joint project conducted by the United Nations Office on Drugs and Crime (UNODC), the World Bank and INTERPOL.

Somalia-based pirates off the coast of the Horn of Africa have made close to a half-billion dollars in their abduction-for-ransom operations that have an adverse impact on global shipping, according to a new report released in Europe on Saturday.

The report, titled "Pirate Trails," was a joint project conducted by the United Nations Office on Drugs and Crime (UNODC), the World Bank and INTERPOL. The researchers gathered data and evidence through interviews with former pirates, government officials, bankers and others involved in countering piracy in order to investigate the flow of the ransom cash paid to Somali pirates operating off the African coast in the Indian Ocean.

“The vast amounts of money collected by pirates, and the fact that they have faced virtually no constraint in moving and using their assets has allowed them not only to thrive, but also to develop their capacities on land,” said the Chief of the Implementation Support Section in the Organized Crime and Illicit Trafficking Branch at UNODC Tofik Murshudlu.

“These criminal groups and their assets will continue to pose a threat to the stability and security of the Horn of Africa unless long-term structural solutions are implemented to impede their current freedom of movement,” he stated.

According to an Examiner news story, there are now 750 Somali men in 14 countries awaiting trials for their acts of piracy.

The report claims that piracy costs the world economy almost $20 billion a year in increased costs to do business. East African countries have suffered a significant decline in tourist arrivals and fishing yields since 2006 because the outbreak of piracy has reduced maritime activity around the Horn of Africa.

“Unchallenged piracy is not only a menace to stability and security, but it also has the power to corrupt the regional and international economy,” said Stuart Yikona, the report’s co-author.

The report's writers claim that money gained through ransom payments is eventually used for other criminal activities, including arms trafficking, funding terrorists and militias, human trafficking and sex-slavery operations.

"Piracy profits are also laundered through the trade of ‘khat,’ a herbal stimulant, where it is not monitored and is therefore the most vulnerable to illicit international flows of money," the report's writers claim.

The report analyzed the investments made by a sample of pirate ‘financiers’ to reveal the range of sectors –- including both legitimate businesses and criminal ventures –- that were funded through ransom money. It found that between 30 per cent and 75 per cent of the ransom money ends up with these financiers, while the actual pirates aboard the ships receive only a mere fraction of the proceeds, amounting to less than one percent of the total.

Pirate Trails calls for coordinated international action to address the issue, and sets out how the flow of illicit money from the Indian Ocean can be disrupted.

“The international community has mobilized a naval force to deal with the pirates. A similarly managed multinational effort is needed to disrupt and halt the flow of illicit money that circulates in the wake of their activities,” said Mr. Yikona.

The report recommends strengthening the Horn of Africa nations to combat illegal cross-border criminal and terrorist activities and do develop the capability to monitor money going towards the lucrative drug trade involving khat.