Closing the Gap: Assessing Responses to Terrorist-Related Kidnap-for-Ransom

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This paper examines kidnapping as a source of terrorist finance, arguing that a new approach is needed if terrorist groups are not to continue to benefit from multimillion-dollar cash injections.

Governments continue to be concerned about kidnapping as a source of terrorist finance. A host of international commitments, underpinned by UN Security Council Resolutions and domestic laws, forbids the commercial resolution of terrorist-related kidnappings and prevents governments from making concessions to terrorists. Yet, it is also common knowledge that, in practice, the UN ban lacks the support of key signatories, who prioritise the immediate preservation of life over their counterterrorism commitments. The authors argue that the current approach increases the returns from kidnapping for groups designated as terrorist organisations by the UN (hereafter ‘designated terrorists’) and increases the terrorist threat to citizens of all states.

This paper highlights the negative unintended consequences of the status quo: a partially applied ban, where some governments make concessions to terrorists. When some governments negotiate on behalf of their citizens, kidnapper expectations and ransoms escalate. Terrorists abuse hostages whose governments refuse to negotiate in order to raise the pressure on countries which do. Because of the official ban, government negotiations are conducted in secret. This makes it more difficult to share information that might assist negotiation strategies, help track the money and identify the perpetrators after ransoms are paid.

This paper outlines three different options which would help to ‘close the gap’ between the commitments of some governments and their actions in response to the kidnapping of their citizens by designated terrorists.

  • The first option requires a global, rigorously applied and scrupulously monitored commitment to prevent any concessions to terrorist organisations. This would eliminate hostage-taking as a source of terrorist finance, although terrorists might still kidnap for propaganda purposes. However, the paper shows that the international community remains polarised and is not ready to commit to enforcing such a ban. 
  • A second option is that governments exit from the market for hostage negotiations and decriminalise private resolutions of terrorist hostage incidents. The insurance sector already offers effective solutions for the prevention and resolution of criminal kidnappings. These solutions would become available for those exposed to the risk of terrorist kidnap. 
  • A third option would be a new policy framework modelled on existing private sector solutions. Private entities would be allowed to make financial concessions, but governments would create effective (multilateral) institutions to monitor and minimise such payments. 

The main aim of the paper is to precipitate an open, honest and inclusive policy debate on this intractable problem. In the long run, terrorist financing through kidnapping should be eliminated by adopting the first option. However, the authors argue that the unsatisfactory status quo can be immediately improved by shifting responsibility for ransoming from governments to the private sector. Eventually, public opinion may shift in favour of a genuine ‘no concessions’ policy. This would be greatly encouraged by efforts to collect evidence that supports the development of a clear policy narrative linking ransom payments to subsequent terrorist attacks.

About the Authors

Anja Shortland is a Reader in Political Economy at King’s College London. Her current research projects are in peace science and the economics of crime. Although often based on data analysis, her work usually cuts across disciplinary boundaries, adopting techniques and insights from sociology, engineering, geography, politics, international relations and economics.

Anja was an Engineering and Economics undergraduate at Oxford and completed her Master’s and PhD in International Relations at the London School of Economics. Before moving to King’s, she worked as a lecturer in Economics at Leicester, a reader in Economics at Brunel University and as a consultant to the World Bank.

Tom Keatinge is the Director of the Centre for Financial Crime and Security Studies at RUSI, where his research focuses on matters at the intersection of finance and security, including the use of finance as a tool of intelligence and disruption. He has a Master’s in Intelligence and International Security from King’s College London, where his research focused on the effectiveness of the global counterterror finance regime. Prior to joining RUSI in 2014, he was an investment banker for 20 years.


Tom Keatinge

Director, CFS

Centre for Finance and Security

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