US SDN Laws Put Insurers in a Bind

A review of the implications for the London marine insurance market of President Obama's Executive Order on the prohibition of ransom payments.

On 12 April, US president, Barack Obama, prohibited payments to specially designated nationals (SDNs) engaged in acts directly or indirectly threatening the peace, security or stability of Somalia. His order identified piracy and armed robbery at sea as such acts.

While the scope of the order is not certain, pirates as a class are not designated SDNs. However, it may be impossible to determine whether the ultimate beneficiary of a ransom payment may be an SDN. Thus, the order prohibits the payment of ransoms to Somali pirates in certain circumstances.