We're banning paying ransoms to terrorists – but what about pirates?

The UK home secretary, Theresa May, has introduced the new Counter-terrorism and Security Bill, which will be considered by a committee of the whole House by mid-December. Alongside the new powers it will hand to UK police and security services, the Bill will ban insurance companies from covering ransom payments to terrorist organisations.

The UK already refuses to pay terrorist groups ransoms and prohibits individuals and companies from deliberately doing so; the Bill’s new provision will close a loophole which may mean insurance companies are reimbursing illegal payments to groups.

So far, so good. But the Bill leaves another major loophole wide open: since 2010, millions of dollars in ransom have been paid for the release of vessels and crews hijacked by Somali pirates – who, while not terrorists per se, may be tightening their links with major terror groups.

Maritime disaster

According to research by the think tank One Earth Future Foundation and its project “Oceans Beyond Piracy”, the estimated total of ransom money paid to Somali pirate groups was an astonishing $21.6m in 2013 – and that is a major decrease from the days of 2010, when it was as much as $238m. These figures do not include the costs of negotiations and the physical delivery of the ransom money – often done by helicopter or private plane – or ransoms paid in other piracy hot spots, such as the Gulf of Guinea.

Terrorism and piracy are, on the face of it, very different beasts, with contrasting motives and objectives. Whereas terrorism is principally a political act, piracy is a criminal activity. In its developed form, it is organised crime employing a structured business model and is usually the work of armed non-state groups. In general, it is focused on material and monetary gain for the pirate groups, while violence and killing are secondary.

But of course, piracy and terrorism are hardly mutually exclusive – and this, above all else, is why the supply of ransom money to pirates must be choked off.

Unholy alliances

There may well be indirect links between terrorism and organised piracy, whether that takes the form of mere exchanges of money and goods or full co-operation in joint ventures. What we can be certain of is that the success of maritime piracy is attracting the attention of terrorist groups around the world as a potential source of finance for their activities.

The millions of dollars already earned through piracy ransom receipts could go a long way towards supporting terrorist activities around the world. And while there seems to be no solid evidence of a terrorist connection there is a growing concern that some of the money given to Somali pirates by way of ransom payments regards to even a partly financing of the notorious Somalia-based terrorist group al-Shabaab, which has recently shown signs of a major upsurge despite the death of its leader.

To make matters worse, the huge amount of money paid for ransom to Somali pirate groups could have very effectively enhanced this financial relationship. Because the ideologies driving the two forms of criminality differ, if the two merge – or even if a link is made and terrorism becomes more closely aligned with piracy – it is very likely to further complicate the strategy needed for dealing with the already fiendishly resilient al-Shabaab.

A terrible cost

Banning insurance companies from covering ransom payments to terrorist organisations, as this forthcoming Bill will dictate, makes perfect sense in itself. But the government has to re-consider the potential of the discussed links between modern piracy and terrorism – and the frightening prospect that the latter may well have started funding itself via the taxation of the former.

Somali piracy’s current period of decline is a good opportunity to reconsider our approach to paying ransoms. That’s not just a matter for governments, but for the shipping industry and insurance companies – who will, of course, have their own stance on any law that bans them from giving pirates money. That will be a big ask, especially if piracy shows any sign of a resurgence.

But if we don’t act, everything the UK is trying to achieve with the new counter-terrorism Bill could be easily cancelled out. If we keep paying we continue to run the risk ransom money will flow through already-established links between terrorist organisations, organised crime networks and piracy groups – and the knock-on effects for an incredibly fragile region could be catastrophic.

Ioannis Chapsos works for Coventry University in the UK. He receives research funding from NATO SPS programme.