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Archive for the ‘Piracy on the High Seas’ Category

Jan

24

Private Navy May Run Aground

Posted by Clif Burns at 9:19 pm on January 24, 2013

Jolly Roger The normally perspicacious Spencer Ackerman of the Danger Room at Wired, posted a story on a British start-up that promises a private navy to protect commercial shipping from pirates (for a jolly fee, of course). However, Ackerman ignores the 800 pound parrot on the pirate’s shoulder: namely, laws restricting the import and export of arms.

The company, Typhon, promises its own Â armed flotilla, but Ackerman doesn’t explain how it plans on moving this armed flotilla in and out of ports, unless, of course, the flotilla will be a modern day Flying Dutchman, cursed to roam the seas forever.

I’ve discussed this issue in a blog post some time back. Export and import licenses will be needed for Typhon’s private navy Â to come and go from most ports. And even if a Typhon Â ship leaving the United States gets an export license, as required, it will be forbidden thereafter to dock in countries, such as China, subject to U.S. arms embargos. And each port of call is likely to require import permits, or in the case of countries that have signed the U.N. Firearms Protocol, transit permits.

So, I guess you might say, that the idea of a private navy to fight pirates is an idea that is better in Wired than in practice.

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Mar

26

When High Pressure Water Hoses Are Just Not Enough

Posted by Clif Burns at 6:58 pm on March 26, 2012

A report from the Associated Press suggests that private military and security companies providing protection to commercial shipping in pirate-infested waters have come up with a novel way of arming themselves without running into import and export restrictions of countries where they may dock their vessels in between missions:

Private security firms are storing their guns aboard floating armories in international waters so ships that want armed anti-piracy guards for East Africa’s pirate-infested waters can cut costs and circumvent laws limiting the import and export of weapons, industry officials say.

Companies and legal experts say the operation of the armories is a “legal gray area” because few, if any, governments have laws governing the practice. Some security companies have simply not informed the governments of the flag their ship is flying, industry officials said. â€¦

Storing guns on boats offshore really took off as a business last year. Britain â€” where many of the operators are from â€” is investigating the legality of the practice, which has received little publicity outside of shipping industry circles.

Floating armories have become a viable business in the wake of increased security practices by the maritime industry, which has struggled for years to combat attacks by Somali pirates.

The story suggests that there are ten to twelve such armories and that their existence is spurred by complex, ever-changing, and prohibitive laws on the import and export of weapons into ports of the countries in the region around Somalia, such as Saudi Arabia, Egypt and Yemen. The floating armories are governed instead by the laws of the country that flags the vessel, with many of the armories apparently flying the flag of the land-locked nation of Mongolia.

The demand for armed guards is understandable given that without them ships are forced to rely on high pressure water hoses to rebuff attacks by Somali pirate skiffs. Surprisingly, such defensive measures have at times proven successful against some of the less competent Somali pirates.

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Jul

6

Somali Pirate Ransoms Alleged to Be Winding Up in Terrorists’ Hands

Posted by Clif Burns at 5:34 pm on July 6, 2011

Category: Piracy on the High Seas • Somalia Sanctions

Somalia A report originating from Reuters states that United Nations officials are alleging that ransom payments made to Somali pirates are going, at least in part, to Somali militants, raising the possibility that shipping groups and insurance companies making these payments might be breaching economic sanctions targeting Somalian militants. The report went on to say that in February the Somali militant group al-Shabaab had seized a number of pirate leaders and forced them to agree to pay 20 percent of all future ransoms to al-Shabaab. Reuters then cited its own investigations showing these instances in which ransoms were diverted to the militant group:

â€¢ Feb. 25: $200,000 from the release of the Japanese-owned MV Izumi after pirates received a $4.5 million ransom.

â€¢ March 8: $80,000 from the $2 million release of the St. Vincent & Grenadines-flagged MV Rak Africana.

â€¢ March 9: $100,000 after the Singapore-flagged MV York was freed for $4.5 million.

â€¢ April 13: $600,000 from the release of the German ship Beluga Nomination after a $5.5 million ransom was paid.

â€¢ April 15: A $66,000 share of the $3.6 million ransom handed over for the Panama-flagged MV Asphalt Venture.

â€¢ May 14: $100,000 from the release of two Spanish crew of the Spanish-owned FV VEGA 5.

According to Reuters, the payment of these amounts was “corroborated” by pirates, al-Shabaab and Somali residents.

Al-Shabaab is listed on the Treasury Department’s List of Specially Designated Nationals and Blocked Persons, but payments made by shipping and insurance companies to pirates that wound up in the hands of the group would not violate Treasury regulations unless the payments were made knowing that they would wind up in the hands of al-Shabaab. Al-Shabaab is also listed by the State Department as a Foreign Terrorist Organization. Because of that designation, 18 U.S.C. Â§ 2339A prohibits the provision of money to al-Shabaab “knowing or intending” that the money be used for the commission of certain terrorist crimes enumerated in the statute. It seems hard to argue, even given the alleged 20% take agreement, that payment of ransom to the pirates satisfies the standards of that statute.

In an earlier post on Somali piracy, I noted that OFAC agreed that its rules only forbid payment to individual pirates and pirate groups that had been designated but recommended that, nonetheless, ship owners and insurance companies consult with OFAC before making ransom payments to Somali pirates. The Reuters story suggests that some companies have been consulting with OFAC prior to ransom payments even though that is not legally required:

Michael Frodl, a Washington lawyer and head of C-level Maritime Risks, â€¦ said the U.S. Treasury’s Office of Foreign Assets Control (OFAC) carried out reviews of all potential ransom payments to determine if the pirate group in question had ever handed over part of a ransom to al-Shabaab.

“Most times OFAC has authorized payment because it has found no link,” Mr. Frodl said. “But if there is indeed a 20% ‘tax’ being applied by Shabaab against pirate ransoms in Haradhere, a major pirate hub it now controls, then things could change.”

Yes, things “could” change, but only the 20 percent tax is actually occuring and the person making the payment was aware of it. Even then, where the payment is not going directly to al-Shabaab and is necessary to end an imminent threat to the life and safety of crew members, OFAC may be in a difficult position arguing that the payment to the non-designated pirates is a violation of its rules.

UPDATE: As commenter Josh points out, al-Shabaab is on the SDN list. In my original post, I was unable to find them. My guess is that there was a typo in my search request. The post has been updated to reflect the designation of al-Shabaab as an SDN

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Apr

22

(Ran)Somalia Payments and OFAC

Posted by Clif Burns at 7:57 pm on April 22, 2010

Category: OFAC • Piracy on the High Seas • Somalia Sanctions

Somalia Last week I posted on the new Somalia “smart” sanctions and noted that the concerns by the maritime industry that the new sanctions would prohibit ransom payments were unfounded. The industry was concerned that language in the executive order, which permitted designations of persons engaged in piracy off the coast of Somalia, would prohibit payments of ransoms to pirates.

Most marine hull insurance covers piracy as does Institute Cargo Clause A. Even under Cargo Clauses B and C, insurers may still be required to contribute to ransom payments under the general average rule. Accordingly, because shippers and vessel owners have insurance coverage paid for and available to pay the ransom, they are anxious not to lose that benefit (or their crews or goods) as a result of any interference by OFAC with ransom payments.

I indicated that these concerns were unfounded because the executive order forbids payments to parties already designated for piratical activities. If a pirate demanding ransom hadn’t been designated yet, nothing in the order would forbid payment of ransom to that pirate or pirate crew. (Of course, it is a little surrealistic to imagine that a vessel owner would demand the pirate’s name and run it against the SDN list before making a ransom payment.)

On April 16, during a meeting with maritime industry officials, a senior government official confirmed my position, namely, that only payments to designated individuals were prohibited by the order. Nothing in the order prohibited ransom payments to pirates in general.

But the bad news is that the official indicated that vessel owners should consult with OFAC before making any payment where the order “might” apply. Because the pirates demanding ransom presumably don’t give their names (or even aliases such as Blackbeard or the like), the order “might” apply to any proposed payment of ransom to pirates.

The utility of meeting with OFAC in such cases certainly doesn’t outweigh the increased danger to crew lives caused by the consequent delay. This is particularly true given that OFAC is unlikely to agree that it won’t pursue criminal or civil penalties should one of the pirates turn out to be a designated individual.

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May

7

To Arm or Not to Arm?

Posted by Clif Burns at 7:34 pm on May 7, 2009

Category: Piracy on the High Seas

Somali Pirate Earlier this week Philip Shapiro, the CEO of Liberty Maritime, testified before the Senate subcommittee with oversight over merchant marine infrastructure and argued that Congress should take action to permit merchant ships to arm themselves either by arming their crews or by hiring armed security guards for the voyage. Currently the only effective countermeasure that merchant marine ships can use against pirate attacks is the U.S. of high pressure hoses to prevent boarding.

Indeed, Shapiro described in his testimony how such hoses helped defeat a recent pirate attack on one of his companies ships. A crew member captured video of the thwarted attack.

Even so, Shapiro called for arming merchant ships and described existing barriers to doing so:

Today’s U.S. legal framework actually prevents ship owners from arming thier vessels for self-defense. While the maritime right of self defense is enshrined in U.S. law in a statute dating from 1817, more recently enacted State Department arms export regulations effectively prohibit the arming of vessels.

Although the International Traffic in Arms Regulations do not prohibit the arming of merchant marine ships, an export license would be required permitting the temporary export of the weapons to each port that the ship will visit prior to its return to the United States. This would not only be time consuming but would, for example, not permit weapons on ships destined for Chinese parts due to the arms embargo against China in section 126.1.

The narrow exemption in section 123.17(c) for crew members to temporarily export non-automatic firearms and 1,000 rounds of ammunition without a license is probably insufficient to arm properly a merchant ship against pirates with RPG launchers and AK-47s. And it entails an additional burden of a declaration by each crew member to a Customs officer prior to each departure by the crew with non-automatic firearms

Beyond the hurdles imposed by the ITAR, the bond requirement imposed by 22 U.S.C. Â§ 463 is also a practical barrier to arming merchant ships. That statue requires that the owners of armed ships post a bond prior to leaving a U.S. port in an amount equal to double the value of the ship and its cargo

Additional Congressional action may not be required, however, to permit the arming of merchant ships. Under 10 U.S.C. Â§ 351, the President may authorize the arming of merchant ships upon determination that the national security is threatened by the application of physical violence by foreign governments or agencies against U.S. commercial interests. Presumably, foreign pirates would fit within the definition of agencies. Ships armed under this provision are exempted from the double-bond requirement.

Even if U.S. barriers to arming merchant ships can be overcome, that’s not the end of the story. The governments of any ports visited by the merchant ship in question may forbid that the vessel be armed. Or, as in, the case of Germany and other countries that have signed the U.N. Firearms Protocol, the port countries may require that a “transit permit” for the weapons be granted prior to the arrival of the ship.

It appears likely that merchant marine ships are going to have to continue to rely on high pressure water hoses for the immediate future to rebuff pirate attacks.

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