Pirate ransoms at over $339 million in seven years

Pirates off the coast of Somalia and the Horn of Africa have made $339 million- $413 million in ransom profits, fueling a wide range of criminal activities on a global scale, a UN-backed report said.

"Pirate Trails", the report was produced by the UN Office on Drugs and Crime (UNODC), the World Bank and Interpol.

It uses data and evidence from interviews with former pirates, government officials, bankers and others involved in countering piracy, to investigate the flow of ransom money paid out to Somali pirates operating in the Indian Ocean, reported Xinhua.

"The vast amounts of money collected by pirates, and the fact that they have faced virtually no constraint in moving and using their assets has allowed them not only to thrive, but also to develop their capacities on land," said Tofik Murshudlu, chief of the Implementation Support Section in the Organised Crime and Illicit Trafficking Branch at UNODC.

"These criminal groups and their assets will continue to pose a threat to the stability and security of the Horn of Africa unless long-term structural solutions are implemented to impede their current freedom of movement," said the report, which was released Friday.

Piracy costs the global economy about $18 billion a year in increased trade costs. As the outbreak of piracy has reduced maritime activity around the Horn of Africa, East African countries have suffered a significant decline in tourist arrivals and fishing yields since 2006.

"Unchallenged piracy is not only a menace to stability and security, but it also has the power to corrupt the regional and international economy," said Stuart Yikona, a World Bank senior financial sector specialist and the report's co-author.

The report found that ransom money was invested in criminal activities, such as arms trafficking, funding militias, migrant smuggling and human trafficking, and was used to further finance piracy activities.

The report, which focused on Djibouti, Ethiopia, Kenya, the Seychelles, and Somalia, also analyzed the investments made by a sample of 59 pirate "financiers" to reveal the range of sectors, including both legitimate businesses and criminal ventures, that were funded by the ransom money.

It found that between 30 percent and 75 percent of the ransom money ends up with these financiers, while the pirate "foot soldiers" aboard the ships receive just a fraction of the proceeds, amounting to less than 0.1 percent of the total.

The report calls for coordinated international action to address the issue, and sets out how the flow of illicit money from the Indian Ocean can be disrupted.