‘Somali piracy flourishes into lucrative business’

2010-11-12 12:44

Somali pirates have set up a sophisticated network of agents to negotiate and launder ransom money that has turned the seizing of ships into a lucrative business, experts say.

The sea pirates use the financial hub of Dubai and Somalia’s southern neighbour Kenya as key transit points to launder the millions of dollars in ransom money by organised and wealthy gangs.

“We think that they have a network of correspondents in the region to negotiate the ransoms and to transfer part of the money,” an international expert who declined to be named said.

Another expert who is based in the United Arab Emirates said Dubai was a platform where the pirates do their business.

“Dubai is one of the places where they launder the ransom money,” said the expert, who also spoke on condition of anonymity.

“It’s the irony of Dubai. The bulk of negotiations are conducted here, the deliveries are arranged by security companies that are here, the money is delivered or transferred and ends up here, discretely,” he said.

The US State Department has also identified the UAE, whose seven emirates include Dubai, and Kenya as centres pirates are using to run their illegal operations.

“Reportedly, the UAE is used as a financial centre by pirate networks operating off the coast of Somalia and for corrupt officials in Afghanistan and Pakistan,” it said in its 2010 International Narcotics Strategy report.

“Kenya is developing into a major money laundering country... and the laundering of funds related to Somali piracy is a substantial problem,” the report said.

“Reportedly, Kenya’s financial system may be laundering over 100 million dollars each each, including an undetermined amount of narcotics proceeds and Somali piracy related funds,” it said.

But a senior Dubai police official categorically dismissed such allegations in April in response to an article published by the British daily The Independent implicating the city-state.

“Money for Somali and Gulf of Aden pirates has not been laundered in Dubai,” deputy police chief General Khamis Mattar al-Mazeina said at the time.

Somali pirates are currently holding 20 ships and more than 400 sailors and passengers, according to the International Maritime Organization.

And as they grow more brazen, the business of piracy flourishes into a multi-tiered economy with many profiting from it, according to Turkish politician Birgen Keles.

“As a matter of fact, a new economy flourishes all over the world with security companies, law and specialised negotiators gaining profit from their involvement in solving piracy cases,” Keles wrote in a report for Nato.

“London seems to have become the hub for firms that help ship owners deal with the legal aspects of paying the ransoms,” she said.

Earlier this month, Somali pirates announced they had received a record nine-million-dollar ransom for a South Korean supertanker, prompting the United Nations to express deep concern.

“Piracy is a menace that is outpacing efforts by the international community to stem it,” Lynn Pascoe, UN secretary general for political affairs, told the UN Security Council, said on November 9.

“The pirates are also taking greater risks and seeking higher ransoms,” he told the Security Council.

“As long as piracy is so lucrative, with ransom payments adding up to tens of millions if not hundreds of millions of dollars, and other economic incentives so bleak, the incentives are obvious,” he said.

Dozens of warships from navies around the world now patrol shipping lanes off Somalia’s coast and into the Gulf of Aden and the global police organisation Interpol has also joined the fray to stamp out piracy.

“This year we managed to connect piracy probes between Western Europe and East Africa,” Interpol’s executive director for police services, Jean-Michel Louboutin, said.

“We have also issued our first ’red notice’,” which seeks the arrest or provisional arrest of suspects, he said on the sidelines of Interpol’s annual assembly in Qatar.

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