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 Today


The Maritime Industry's original and most viewed E-News Service

Maritime Reporter July 2016 Digital Edition
FREE Maritime Reporter Subscription
Latest Maritime News    rss feeds

Legal

Swiber Applies for Judicial Management Instead of Liquidation

Singapore oilfield services company Swiber Holdings Ltd said on Friday it has applied to place itself under judicial management instead of liquidation.   Swiber

Daewoo Shipbuilding: $1.4 bln order Cancelled

Cancelled order part of Statoil's Bressay project. South Korea's Daewoo Shipbuilding & Marine Engineering Co Ltd on Friday said a 1.58 trillion won ($1.41 billion)

Gener8 Maritime Net Income Up 91%

Announcing its financial results today for the three and six months ended June 30, 2016 Gener8 Maritime, Inc. reported net income of $38.0 million, or $0.46 basic and diluted earnings per share,

Finance

U.S. Awards $61.8 Mln for Port Projects

U.S. Transportation Secretary Anthony Fox today announced 40 awards totaling nearly $500 million in funding for the  FY 2016 Transportation Investment Generating Economic Recovery (TIGER) grants.

Moody's: Challenges Ahead for Asian Port Operators

Moody's Investors Service says lackluster global growth, weak commodity prices, high capital expenditure commitments and a liner industry struggling with overcapacity

Swiber Applies for Judicial Management Instead of Liquidation

Singapore oilfield services company Swiber Holdings Ltd said on Friday it has applied to place itself under judicial management instead of liquidation.   Swiber

Maritime Security

Protecting Sensitive Sea Areas in South-East Asia

Further progress towards identifying and designating Particularly Sensitive Sea Areas (PSSAs) in south-east Asia has been made during a regional meeting in Lombok, Indonesia (27-28 July).

Libyan Oil Exports to Resume from Closed Ports

Libyan oil exports from closed ports should resume in no more than one to two weeks after a deal was signed between the government and an armed brigade controlling the terminals,

SNMCMG2 Completes Third Black Sea Deployment

Standing NATO Mine Countermeasures Group 2 (SNMCMG2) has completed its third deployment into the Black Sea under the command of Captain Ramazan Kesgin, Turkish Navy.

News

U.S. Awards $61.8 Mln for Port Projects

U.S. Transportation Secretary Anthony Fox today announced 40 awards totaling nearly $500 million in funding for the  FY 2016 Transportation Investment Generating Economic Recovery (TIGER) grants.

DP World takes over Rodney Container Terminal, Canada

DP World has signed a long-term lease agreement for the expansion and operation of the multi-purpose Rodney Container Terminal at Saint John, New Brunswick, Canada.

MED AMERICAS will Replace MGE Service

CMA CGM is revamping it MGE service becoming the MED AMERICAS, stand-alone CMA CGM service with dedicated fleet of 11 vessels of 2,500 TEU, in a continuous effort to improve service coverage,

 
 
Maritime Careers / Shipboard Positions Naval Architecture Navigation Pipelines Pod Propulsion Port Authority Salvage Ship Electronics 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: 0.1315 sec (8 req/sec)