Pirate Money Trail: Report Gives Insight, Urges Tracking

MarineLink.com
Monday, November 04, 2013
Cover of the Report: Image courtesy of the publishers

A study by the International Criminal Police Organization, United Nations Office on Drugs and Crime and World Bank attempts to understand the illicit financial flows from pirate activities off the Horn of Africa. The study focused on: Djibouti, Ethiopia, Kenya, Seychelles, and Somalia. Excerpts follow:

Background
It is estimated that  more than  US$400 million was claimed in ransoms for pirate acts between April 2005 and December 2012 and  179 ships were hijacked off the coast of Somalia and the Horn of Africa during that time.

Twenty first century Somali Piracy not only creates problems in the region, but also has a global impact. Unchallenged piracy is not only a menace to political stability and a threat to international security, but it also undermines global growth prospects going forward. Up until now, little attention has been paid to tracking and disrupting the financial flows from piracy.

The study (i) analyzes how much money is collected in ransom payments;  (ii)  how and to whom this money - the proceeds of piracy - are distributed; (iii) how these proceeds may be invested.

Who benefits from the proceeds of piracy?


• Pirate Financiers  stand in the middle of the piracy network. They are " The Money Kingpins", Investors and Beneficiaries of the piracy business. On average, they collect from 30 to 50 % of total ransom, working individually or as a group.
• Low Level Pirates, "The Foot Soldiers", typically receive a standard fee of US $ 30,000 to  75,000  per ship, which only amounts to  0.01% - 0.025% of an average ransom payment.
• The local community provides goods and services to pirates, including food, repair services and khat which is a legal drug in Somalia.

How are the proceeds of piracy moved, invested, and used?

The main reported locations of pirate financiers’ assets, suggest that contrary to conventional wisdom, many investments of proceeds of piracy are actually made within Somalia. The proceeds are typically moved by cross – border cash smuggling, trade based money laundering, bank wire transfer and the abuse of Money of Value Transfer Services.

Investments from the proceeds of piracy

Pirate financiers invest into a range of sectors, both legitimate business activities (in order to launder money) and criminal activities: 
• Some of these proceeds are recycled into financing criminal activities, including further piracy acts, human trafficking, including migrant smuggling, and investing in militias and military capacities on land in Somalia.
• Proceeds from piracy also find their way into the khat trade particularly in Kenya, where the khat trade is not monitored and therefore the most vulnerable to this risk.

How to Break this Cycle?


There is need for a strong commitment by countries in the region to work together to
• Better Monitor the Financial Flows from piracy and share regional financial intelligence
• Improve Cross-border Controls, especially border entry - exit points, and
• Improve Regional Cooperation and International Support.

The full .PDF Report can be accessed through: http://web.worldbank.org/WBSITE/EXTERNAL/TOPICS/EXTFINANCIALSECTOR/0,,contentMDK:23491862~pagePK:210058~piPK:210062~theSitePK:282885,00.html

Maritime Reporter May 2015 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

People & Company News

WCI Applauds Increased USACE Funding

Today WCI applauded the leadership of Senate Appropriations Committee Chairman Thad Cochran (R-MS) and Senate Energy & Water Development (E&WD) Appropriations Subcommittee

SoCal Beach Cleanup Could Take Months

The U.S. Coast Guard captain overseeing cleanup of oil spilled from a pipeline rupture that closed two California state beaches and fouled offshore waters near

MPC Honors Crowley for Tank Vessel Safety

Crowley Maritime Corporation’s petroleum services division has once again been honored by Marathon Petroleum Company (MPC) with its annual Elite Vessel Award, which

Legal

Myanmar Finds 200 Bangladeshis in Offshore Boat

Myanmar's navy found a boat carrying more than 200 Bangladeshis, the government said on Friday, after the military chief said some migrants landing in Malaysia

Two ASC Kalmar Cranes for DP World Brisbane

Kalmar, part of Cargotec, has received an order from DP World Australia to deliver two new Kalmar automatic stacking cranes (ASCs) for its semi-automated terminal in Brisbane.

DP World Extends Title Sponsorship Until 2020

Dubai is set to remain at the epicenter of golf on The European Tour for the foreseeable future after global port operator DP World announced today that it will

Finance

WCI Applauds Increased USACE Funding

Today WCI applauded the leadership of Senate Appropriations Committee Chairman Thad Cochran (R-MS) and Senate Energy & Water Development (E&WD) Appropriations Subcommittee

Shipping Freight Rates Drop Amidst Overcapacity

Shipping freight rates on the world's busiest route, from Asia to Northern Europe, fell by the largest percentage amount since 2008, reflecting wild volatility

WFP: Aid Cargo for Yemen will be Delivered After Ship Docks

The World Food Programme will deliver a cargo of Iranian aid for Yemen once the ship carrying it reaches Djibouti's port, the U.N agency said on Friday. Earlier

Maritime Security

MPC Honors Crowley for Tank Vessel Safety

Crowley Maritime Corporation’s petroleum services division has once again been honored by Marathon Petroleum Company (MPC) with its annual Elite Vessel Award, which

Myanmar Finds 200 Bangladeshis in Offshore Boat

Myanmar's navy found a boat carrying more than 200 Bangladeshis, the government said on Friday, after the military chief said some migrants landing in Malaysia

HMAS Anzac Visits Portsmouth, UK

The Royal Australian Navy’s helicopter frigate HMAS Anzac has arrived in Portsmouth, England, as part of her NORTHERN TRIDENT 2015 deployment.   Anzac departed Sydney in March 2015,

News

DMW Marine Takes the Lead in Military Cranes

DMW Marine Group, LLC. has completed a number of projects for the U.S. Navy and foreign Navies in recent years, claiming a place as a go-to supplier for Navy departments globally.

US Oil Platform on Fire in Gulf Of Mexico

An oil platform caught fire and was evacuated in the U.S. Gulf of Mexico offshore Louisiana in the early hours of Friday, though no injuries were reported, the U.

USCG Tall Ship Sailing to the Bahamas

The U.S. Coast Guard Cutter Eagle is scheduled to arrive at Berth 14 at Prince George Wharf in Nassau, Bahamas on Thursday, May 28 as part of its 2015 cadet summer training deployment.

 
 
Maritime Standards Naval Architecture Navigation Pipelines Pod Propulsion Port Authority Ship Electronics Ship Repair Shipbuilding / Vessel Construction Sonar
rss | archive | history | articles | privacy | contributors | top maritime news | about us | copyright | maritime magazines
maritime security news | shipbuilding news | maritime industry | shipping news | maritime reporting | workboats news | ship design | maritime business

Time taken: 0.2298 sec (4 req/sec)