Banking Curbs

According to Michele White, the general counsel to the International Association of Independent Tanker Owners, the supply of dollars from U.K. banks to Somali pirate groups has dwindled since Prime Minister David Cameron created a 14-nation task force in February to halt payments.

Somali Pirates Battled In London As British Banks Curb Dollars

By Michelle Wiese Bockmann, Bloomberg

The fight against Somali pirates, responsible for hijacking about 170 vessels in four years, is starting to draw in British banks, until now the main source of the stacks of dollars used to pay ransoms.

The supply of dollars from U.K. banks dwindled since Prime Minister David Cameron created a 14-nation task force in February to halt payments, said Michele White, the general counsel to the International Association of Independent Tanker Owners, the industry’s biggest trade group. Ransoms reached $160 million last year, according to One Earth Future Foundation, a nonprofit group based in Broomfield, Colorado.

Governments, which spent almost $1.3 billion in 2011 on military interventions including naval patrols, are seeking to restrict the payments because they encourage more hijackings by pirates in Somalia, the world’s fifth-poorest nation. The banking curbs will make it harder for ship owners and insurers to get back the 227 seafarers and 12 vessels still held hostage.

“The only way you release a crew is by payment,” said Cyrus Mody, the assistant director of the International Maritime Bureau in London, which tracks piracy. “It’s true that ransoms are the key fact that keep piracy going, but unless there’s another option available, then pirates are going to take out their frustrations on the crew if they aren’t paid.”

Task Force
Payments to pirates operating off Somalia averaged $4.7 million a vessel this year, according to the European Union naval force patrolling the region. The pirates hijacked more than……[access full article]