U.S. Offers Guidance Over Ransom Talks
Obama administration officials have asked that shipowners faced with hijackings and ransom demands in Somalia consult with the U.S. Treasury Department’s Office of Foreign Assets Control from the onset of the situation, allowing Washington to provide guidance on how last week’s executive order could affect ransom payments.
According to well-placed sources, this outreach is a subtle message that shipowners may use collaboration with Washington to determine how to avoid sanctions under the order and still pay ransoms to get their crews freed.
Blank Rome partner Jonathan Waldron, who attended Friday’s roundtable in Washington at which the message was delivered, said: “Government departments have pro-actively offered to work with owners all the way through a ransom incident.”
“Depending on individual facts, this could lead to a ransom being paid in a way that does not involve a U.S. nexus—payment in a foreign currency through a foreign source, for example—which could keep the owner free from penalties in the U.S.”
“That being said, the specter of future sanctions remains, and it is unclear whether OFAC will move to minimize uncertainty and concern by issuing policy guidance prior to publishing regulations, which are expected.”
The order is the first explicit recognition by Washington of a link between piracy and terrorism financing. Specifically, two of the 11 proscribed individuals in the order, Mohamed Abdi Garaad and Yemane Ghebreab, were identified in the meeting as “known supporters of piracy.”
The meeting was told that the order applied only to dealings by US persons with the 11 designated individuals. In the absence of any direct or indirect US nexus, the order would not affect payments by non-US shipowners.
However, Mr. Waldron added: “Unfortunately, this guidance does little to quell fears of the maritime community given the industry’s global interconnectivity and the need to move quickly when ransom demands hold lives and property in the balance.”
“In addition, there are no assurances that the US government will agree prior to the payment of ransom that it will not pursue civil or criminal action against those making the payment.”
Maritime regulatory consultant Dennis Bryant saw the “fine hand of [US Secretary of State] Hillary Clinton” in President Barack Obama’s order.
“It is a matter of public record that Ms. Clinton wants to outlaw all ransoms. In her view, this would make it an unprofitable business for pirates, and the problem would go away,” Mr. Bryant said.
“Theoretically, she is right. However, the pirates hold hostages right now. The sticking point is, what to do about this angle?”
To view the article online, please click here.
"U.S. Offers Guidance Over Ransom Talks," by Rajesh Joshi first appeared in Lloyd's List on April, 19, 2010. To learn more about Lloyd's List, please visit www.lloydslist.com.
Reprinted with permission from Lloyd's List.