More than $400M claimed in ransoms by pirates between 2005 and 2012

New report details steps needed to fight piracy

It is estimated that more than $400 million (USD) was claimed in ransoms for pirate activities between April 2005 and December 2012. And according to a new report, “Pirate Trails: Tracking the Illicit Financial Flows from Piracy off the Horn of Africa,” 179 ships were hijacked off the coast of Somalia and the Horn of Africa during that time.

The 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 report focused on Djibouti, Ethiopia, Kenya, Seychelles, and Somalia.

Read: Maritime agencies fight rising threat of piracy

The study found that pirate financiers are the main beneficiaries of the piracy business. On average, they collect from 30 to 50% of the total ransom, working individually or as a group. Meanwhile, low-level pirates, or “the foot soldiers,” typically receive a standard fee of $30,000 to $75,000 per ship, which only amounts to 1% to 2.5% of an average ransom payment.

The report also found that the investment of proceeds of piracy are made within Somalia and are typically moved by cross-border cash smuggling, trade-based money laundering, bank wire transfer and the abuse of Money of Value Transfer Services.

Read: Marine insurance remains buoyant

Pirate financiers invest into a range of sectors, both legitimate and criminal, including further piracy acts.

The report states that, in order to break the cycle of piracy, countries in the region need to work together to better monitor the financial flows from piracy and share regional financial intelligence. It suggests that countries in the region need to improve cross-border controls, especially border entry and exit points, and improve regional cooperation and international support.

For more information about the report click here.

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