Pirate money promotes global criminal activity, report says
Illegal earnings netted pirates around US$500,000 from 2005 to last year, according to report from World Bank and UN
Pirates hijacking ships off the Horn of Africa and Somalia from 2005 to last year garnered well over a quarter of a billion US dollars in ransoms and used the money to fund criminal activities worldwide, according to a report released on Friday.
The study reveals the pirates engaged in human trafficking, arms trafficking, funding militias and money laundering through trade in the stimulant known as ‘khat’, particularly in Kenya, as well as other illegal activities that divert money from the legal economy that would otherwise promote economic development.
“Unchallenged piracy is not only a menace to stability and security, it also has the power to corrupt the regional and international economy,” said Stuart Yikona, a financial sector specialist at the World Bank and co-author of the report ‘Pirate Trails’.
It recommends a range of measures to combat the problem, including steps to deal with illegal cross-border cash smuggling, anti-money laundering measures and mechanisms to monitor financial flows through the khat trade.
The study – conducted by the World Bank and the United Nation’s Office of Drugs and Crime and based on interviews with former pirates, government officials, bankers and others countering piracy – estimates piracy costs the global economy US$18 billion a year in increased trade costs. Attacks on ships off the coast of Somalia and the Horn of Africa yielded between US$339 million and US$413 million in ransom money in the seven years from 2005, it said.