UK Bans Insurance Firms from Paying Ransoms to Terrorist Groups

The UK will introduce new laws prohibiting insurance firms from covering ransom payments made to terrorist groups, in a move which could put the British government's hostage policy at greater odds with its European neighbours.

Home Secretary Theresa May said on Monday that the new legislation is designed to stop the families and employers of people kidnapped by organizations like the Islamic State (IS) paying for their release.

"Our position is clear — ransom payments to terrorists are illegal under UK and international law," May said at a counter-terrorism event in London where she unveiled parts of a new counter-terrorism bill to be introduced to the British parliament on Wednesday. "Agreeing to meet the demands of barbaric groups like ISIL [an alternative name for IS] would only put many more lives at risk."

New Counter-Terrorism Bill Will Prohibit 'Extremist' Speakers from British Universities. Read more here.

A recent UN report said a Western hostage was worth an average of $2.7 million and estimated that IS had made between $35 and $45 million in the past year alone from such payments. Paying ransoms to terrorist groups is illegal under UK law and the British government has long argued that the practice encourages further kidnappings and attacks, but there has been uncertainty over whether insurance companies could cover ransoms paid by others.

The move is in keeping with a UK-headed G8 commitment signed in 2013 pledging not to pay ransoms to terrorist groups that was subsequently backed by a UN Security Council resolution.

The UK appears to have maintained its promise, although some suspect that families or employers may have managed to make payments. David Bolam was freed in October after being taken hostage in Libya. The circumstances surrounded Bolam's release are unclear, but it thought that funds were supplied to his kidnappers.

British Hostage Freed by Libya Militants As Family Denies Ransom Reports. Read more here.

Other European countries seem to be making a habit of it the practice, however. A number of citizens from mainland European countries, including France and Spain, have been seized by IS since the group first appeared in Syria; all have now been released.

When four French journalists were freed in April 2014, German magazine Focus published a report citing NATO sources in Brussels as saying that $18 million had been taken to Turkey by Defense Minister Jean-Yves Le Drian to be delivered in exchange for their release. One of the journalists, Nicolas Hénin, told the BBC he too believed a ransom had been paid.

Government spokespeople repeatedly denied the claims, as did President François Hollande, who said that France, "does not break its principles."

A New York Times investigation published in July suggested that this might not be strictly, or indeed at all, true. In fact, the report said, Paris had channeled over €43 million ($54 million) to terrorist groups since 2008 through private companies.

Spain has also had a record of paying ransom for its nationals, and reportedly paid IS around €6 million for the release of three aid workers.

Italy once tried to put a halt on ransom payments and even implemented legislation that froze the assets of hostages' families so that they couldn't pay off kidnappers. Its policy failed to stop deter criminals, however, and was eventually reversed. Since then, it is believed to have paid for the release of some its citizens, including an aid worker held by IS.

By contrast, a number of British hostages may have died as a result of its strict no-ransom policy. While hostages from mainland Europe were released by IS, the group murdered British captives David Haines, and Alan Henning, along with Americans James Foley, Steven Sotloff and Peter Kassig. The US also refuses to pay ransoms, and has insisted that a review of its hostage policy announced last week will not lead to any change on that point.

Indeed, of a group of 23 mainly Western IS-captives tracked by the New York Times, the only remaining in captivity are British journalist John Cantlie, who is being forced to act as an IS mouthpiece and an as yet unidentified US aid worker.

This has happened before. British citizen Edwin Dyer, who was kidnapped with a German and two Swiss citizens by al-Qaeda in the Islamic Maghreb (AQIM) in 2009, was subsequently executed by his captors while his fellow hostages were released in exchange for millions of euros in ransoms.

An AQIM statement published in the aftermath said: "On Sunday, May 31, 2009, at half past seven p.m. local time, the British captive, Edwin Dyer, was killed… It seems Britain gives little importance to its citizens."

Relatives of kidnapping victims will, of course, do anything to get their loved ones back. But even for politicians, the allure of paying ransoms is obvious, the boost in national approval gained by a well publicized family reunion vastly preferable to the often horrific and public death of one of its citizens.

And it may seem like the only option. Many states don't have the military resources to mount a rescue mission, and even then they do, such ventures are hardly guaranteed success, an American attempt to extract Foley was stymied by out of date intelligence.

Nevertheless, May, as well as other US and British lawmakers, argue that handing over money has massive negative consequences. Despite IS and others kidnapping for political reasons as well as monetary, citizens from countries that do pay are inevitably more likely to be targeted, seen by their prospective kidnappers as a guaranteed return. Terrorist groups could then use these funds to commit further atrocities and take countless more lives. European ransom policy, they argue, makes everyone vulnerable.

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