Ransoms not vulnerable to anti-money laundering techniques, says BBC

According to a report published on the BBC website this weekend, anti-money laundering techniques are struggling to meet the challenges presented by Somali piracy.

Although the article expresses doubt toward rumours of large-scale crime syndicates operating money laundering schemes in Gulf states, citing a maritime security spokesperson who describes these stories as inventive reporting on very slim evidence, it does draw attention to the impenetrable banking system in Somalia that means the proceeds of crime need leave no paper trail.

The report describes Hawala, the Somali financial system, as being largely verbal, meaning that financial institutions are not required, and suggests that the payment of ransoms in cash provides another challenge to established anti-money laundering techniques.

Its author concludes by warning that the application of existing theories regarding international money laundering to this situation may well be misguided, arguing that The problem is unique, the country is unique, and speculation will lead to misguided policies which are likely to prolong the dangers facing any ship that sails along the long unruly coast of Somalia.

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