Are pirate ransoms legal? Confusion over US order

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NAIROBI, Kenya — Shipping companies with U.S. interests don't know if they are allowed to pay ransoms to Somali pirates anymore after President Obama declared them an "extraordinary threat," even as pirates extended their reach farther than ever toward Asia, hijacking three Thai vessels, officials said Tuesday.
A total of 77 crew members were taken Sunday in the hijackings 1,200 miles (1,900 kilometers) east of Somalia in the Indian Ocean — the farthest from the Somali coast pirates have ever attacked, the EU Naval Force said. Pirates now hold 14 vessels and 305 hostages, the International Maritime Bureau said.
Pirate attacks have risen over the last year despite increased patrols by U.S. and European warships, in part because the multimillion dollar ransoms keep rising.
The shipping industry has long seen ransom payments to retrieve hijacked vessels, cargos and crews as a cost of doing business. But after Obama last week issued an executive order on Somalia, shipping officials say it's no longer clear whether companies with U.S. interests can legally pay ransoms. The industry is worried because ransoms have been the only way to quickly and safely free hostages.
"It's confusion, is the way you could sum it up," said David Osler, a writer at the shipping news journal Lloyd's List. "Industry sources believe the executive order is worded poorly ... it's not immediately clear to everybody what is being said here."
Obama's order outlaws anyone from supplying financing to any Somalis involved in military activities.
Roger Middleton, a piracy expert at the British think tank Chatham House, said: "I think the shipping industry would like to be told whether or not they would potentially face prosecution."
For some, the order's ramifications are clear.
Because it's not clear where the million-dollar ransoms wind up, paying them now would be illegal, insisted Doug Burnett, a maritime expert in the law firm Squire, Sanders and Dempsey.
"You would be very hard-pressed, if you were just looking at the document, to say that paying ransom to pirates would not be a violation of the executive order," Burnett said, adding that ransom payments go to clans in Somalia and add to the country's lawlessness.
The U.S. Treasury Department, though, indicated it is not interested in prosecuting anyone trying to free hostages.
"We are targeting only those individuals and entities that freely choose to support acts of piracy or armed robbery at sea off the coast of Somalia, including through the supply of weapons, financing, communication devices, or small boats and other equipment," Adam Szubin, director of the Office of Foreign Assets Control at the Department of Treasury, told The Associated Press.
Still, a Treasury Department spokesperson, who was not authorized to speak publicly in line with department policy, said it is possible that if a ransom payment ends up in the hands of one of 11 individuals listed by the U.S. government along with Obama's order, the Department of Justice could become involved.
The shipping giant A.P. Moller-Maersk Group said it is examining the impact of the order. A company spokeswoman, Marie-Louise Moller, said its primary concern has long been the safety of its crews.
"Taking away our ability to secure the safe release of our crew members and vessels could put us as an employer and ship owner in a very difficult position," Moller said. "Thankfully we have not had to test such a scenario under these restrictions and it's difficult for us to comment further on the consequences of the order without speculating."
A federal law enforcement official said separately Tuesday that five or more pirate suspects are being brought to the United States for prosecution.
The suspects will arrive in the United States by the end of the week, the official told The Associated Press. The official spoke on condition of anonymity because the transfer is still under way.
U.S. officials had said last week that as many as 20 suspected pirates held on U.S. ships off the coast of Somalia might soon be headed to the U.S. for prosecution.