Paying Ransoms - Could The US Make This More Difficult?

According to a number of reports in trade press and recent comments from the US State Department, the US administration seems to be flying a kite to test national and industry reaction to an initiative which may use existing UN Resolutions and the US OFAC (Office of Foreign Assets Control) Regulations ("Regulations") to allow them to take action, including the banning of ships involved from US ports, against shipowners who pay ransoms to Somali pirates.

It is difficult to comment in detail because the full scope of the US proposals have not been aired. Indeed, if the reaction is strong enough no formal proposal may be forthcoming. However, our understanding from industry and other sources is that the US is considering having certain pirate leaders named as "designated" people. These may be named at a UN level, using UN Resolution 1844 (on which see below).