Obama's Ransoms Order Allows Discretion
President Barack Obama’s executive order on Somalia and piracy is designed to allow the US government sufficient flexibility to be able to target and penalize ransom payments to pirates “at its discretion," reliable sources have confirmed to Lloyd’s List.
At the same time, well-placed sources within the administration emphasized that Mr. Obama’s order was not a “blanket prohibition” against ransoms, and in fact was a shining example of how his administration is seeking to forge “new partnerships” with other nation states in tackling global challenges, of which piracy is only a “symptom.”
Nonetheless, senior maritime legal sources expressed concern that Mr. Obama’s executive order was “purposefully vague” and designed to plant a seed of doubt among shipowners that paying ransoms could land them in trouble.
The White House executive order has authorized the Treasury Department to freeze the US property of entities determined to be “contributing to the Somalia conflict.” According to the Obama blueprint, such “support” would most clearly be established if a person or entity is found to have had dealings with 11 designated individuals, or the militant Islamic group Al-Shabaab.
In addition, the Treasury at its discretion can block the US assets of persons or entities that, in the Treasury’s opinion, “have engaged in acts that directly or indirectly threaten the peace, security, or stability of Somalia.”
In a message to Congress, Mr. Obama said: “I determined that, among other threats to the peace, security, or stability of Somalia, acts of piracy or armed robbery at sea off the coast of Somalia threaten the peace, security, or stability of Somalia.”
A Washington source, speaking on condition of anonymity, said: “The executive order only prohibits US persons from dealing with the 11 designated individuals and the designated entity [Al-Shabaab]. It is not a blanket prohibition against ransoms. That being said, [US authorities] intend to target those who help individuals or entities that support piracy. However, the determining factor would be whether these persons freely choose to support piracy.”
The source was unclear in response to a specific question whether payment of ransoms amounted to “freely choosing” to support pirates.
Seward & Kissel senior litigation partner Bruce Paulsen said: “It appears that the Obama administration has chosen to be purposefully vague. The executive order does not mention the words ‘ransom’ or ‘payments to pirates.’"
“I believe this is deliberate, to raise concern among shipowners that paying ransoms could land them in hot water. The lack of clarity in this executive order is disturbing. It appears as if the Obama administration wants to remain free to blame the victim.”
The last comment is consistent with Mr. Paulsen’s high-profile public speaking run stretching back to the spring of 2009, during which he has sought to hammer home the point that pirates are “criminals” and not “terrorists.”
Mr. Paulsen has made the case that while current US laws allow ransom payments as long as pirates are considered ordinary criminals, re-classifying them as terrorists would immediately make these payments illegal.
He added: “Penalizing the owner who pays ransoms is like mugging him twice.”
“If someone holds a gun to your forehead in a dark alley, the sensible thing to do is hand over your wallet. Being punished for doing so is what it would amount to, if such ransoms were to be targeted by this executive order.”
Mr. Paulsen was not entirely satisfied with the administration source’s assurance that only persons who “freely choose” to support pirates would be targeted. “The executive order is vaguely worded, and so is Mr. Obama’s message to Congress—perhaps this is deliberate, to allow the government to treat ransoms on a case-by-case basis, and construe each case as it chooses to construe it.”
Blank Rome partner and piracy specialist John Kimball said: “If Mr. Obama’s aim was to prohibit all ransom payments to Somali pirates, the executive order would say so. It does not. Nevertheless, it does appear to extend to ransom payments should a link be established between pirates and Al-Shabaab or, indeed, any known terrorist group. There have been rumors in the industry about such ties.”
“The groundwork appears to have been laid for a more serious US effort to penalize those who pay ransoms, in case such a link is established. I hope we will see a parallel statement from the United Nations in the near future.”
“I also urge the US administration to be very clear about ransom payments when regulations are issued. Shipowners need clear legal guidelines when they are confronted with the terrible situation of having a vessel and crew taken hostage.”
Reliable sources said US government agencies are to convene today to fine tune the Obama administration’s next steps. Private parties “would not be allowed” into this meeting, the sources said.
The sources also claimed that the UN is expected to soon issue a similar communiqué on Somalia and piracy.
"Obama's Ransoms Order Allows Discretion," by Rajesh Joshi first appeared in Lloyd's List on April 15, 2010. www.lloydslist.com.
Reprinted with permission from Lloyd's List.