04 May 2010

Somali-Canadians getting piece of pirates' ransom pie: Intelligence expert

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Some Somali-Canadians have received a cut of the ransoms collected by pirates operating off the Horn of Africa and money may have been sent back to Somalia to fund other hijackings, according to an intelligence specialist on piracy.
Karsten von Hoesslin, a senior analyst for Risk Intelligence, told naval officers from Pacific Ocean nations gathered in Victoria for a three-day maritime security conference, that the transfer of ransom money has been tracked from Somalia to Ottawa and a number of other locations that are home to Somali communities.
"It's coming to Ottawa, it's in London and Nairobi," he said. "We know where the money is going."
Risk Intelligence is a Danish-based firm that provides advice and information about piracy, organized crime and terrorism to companies and governments. Its analysts have made trips to Somalia to gather information.
Since January, there have been 65 attacks on ships off the coast of Somalia. Pirates have seized 17 vessels and have taken 362 hostages.
Shipping companies almost always pay for the release of crews and vessels. Ransoms range from $3 million to $7 million per ship.
Von Hoesslin declined to get into specifics about where the ransom money is going in the Somali community in Ottawa. "There is money going both ways to and from Ottawa," he added.
He said that there is the potential that some of the money that Somali-Canadians send back to the region is "to invest in the piracy syndicates."
Piracy off the Horn of Africa is big business, with Somali individuals and communities investing in pirate ventures. Pirates are provided with food, supplies and transportation all on credit, von Hoesslin explained. When the ransoms are paid, the investors and suppliers all receive a cut, he added.
Von Hoesslin pointed out one case in which a Somali security official working for Risk Intelligence was offered a chance to invest in a piracy operation for $5,000 U.S.. The man declined, but acknowledged if he had gone through with the investment he would have made a large profit, von Hoesslin said.
He said there has not been enough effort focused on following the flow of ransom money from the region. "When it comes to asset tracking, the institutions who are tracking are asleep at the wheel," von Hoesslin said.
Interpol, he added, also has been lax in sharing information with governments in the region, such as those of Kenya and the Seychelles, hindering the ability of those nations to prosecute pirates.
Many immigrants from Asia and Africa use hawalas to send cash to their homeland faster and cheaper than the formal banking system. Largely unregulated, hawalas are informal financing networks: take your money to a hawala in Ottawa, and within minutes or hours, a trusted associate is releasing the cash equivalent to your relative on the other side of the world, for a modest fee. The hawala industry came under scrutiny after the terrorist attacks of 9/11 and new rules were introduced in Canada requiring hawala operators to track all transactions.
Farah Aw Osman, executive-director of Canadian Friends of Somalia, is from the semi-autonomous region of Puntland, home base for many of the pirate syndicates.
"Somalis hear foreign governments saying they want to crack down on the pirates, but without addressing the root causes of the piracy," he said. "Some of the very countries making the loudest noises about piracy are the ones who send their boats to the Somali coast for illegal fishing. That's piracy itself, looting those waters. It has tremendous impact on local fishing."
Aw Osman argued that piracy will flourish as long as there are scores of unemployed young men drifting to the Somali coast, the longest in Africa.
Somali pirates have extended their range and can now be found operating up to 1,000 nautical miles offshore. Their small boats are transported out to sea by larger mother ships.
Pottengal Mukundan, director of the International Maritime Bureau, which tracks pirate attacks, noted that Somalis are so destitute that they line up to become pirate crews. Being captured and thrown into a European or U.S. jail, where they are provided with three meals a day is not a deterrent, he added.
What is required is that international law enforcement agencies conduct better tracking of where the ransom money goes and then target those who are funding pirate ventures, said Mukundan. "You need to target the people at the top," he said.

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