kidnap y - hiscox special risks · 21 february was kidnapped from her home in putra kulai (johor...

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KIDNAPBRIEFING

This is the 134th issue in a series of kidnap-focused reports prepared by Control Risks on behalf of Hiscox. The Monthly Kidnap Briefing is distributed to select clients in order to keep you informed of the trends in kidnapping worldwide and assess the risk of kidnapping to your business.

This issue includes an overview of kidnapping-for-ransom trends in March 2017, a brief on extortion by Chinese mafias in Argentina and beyond, and a focus on the persistent Islamist kidnapping risk in Kenya.

ISSUE 134 | April 2017

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GLOBAL INSIGHTAmericas 1Africa 2Asia 2Middle East 3

BRIEF ON LATIN AMERICAChinese mafias: the extortion threat in Argentina and beyond 4Chinese mafias in Argentina 4Why extortion proliferates 4Argentina and beyond 5

FOCUS ON: Kenya: Abductions near Somali border underscore persistent Islamist kidnapping risk 6

ABOUT USControl Risks 8Hiscox 8

If you would like to provide us withfeedback on the Monthly Kidnap Briefingor inform us of your interest in a specificcountry or theme that you would like usto cover in a subsequent issue, thenplease write to [email protected]

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GLOBAL INSIGHTTABLE OF CONTENTS






Americas

THREE-DAY VIRTUAL KIDNAP IN GUANAJUATO REMINDER OF VULNERABILITY OF HOTEL GUESTS IN MEXICO

The Guanajuato state Attorney General’s Office on 2 March announced that the manager of a major sports team had been located unharmed after suffering an extortion attempt at a hotel in the Mexican city of León. An extortionist had contacted the man and told him that there were gunmen in his hotel. The extortionist convinced him to check into a new hotel, and stay on the telephone for three nights. During the ordeal, he was not allowed to sleep and was questioned constantly to make sure he was still there. The crime resembled a virtual kidnap, though the Attorney General’s Office confirmed that no ransom was paid.

A virtual kidnap typically involves an extortionist contacting an individual, claiming to have abducted one of their loved ones and demanding a ransom. As in this incident in León, many extortionists simultaneously target their supposed victim (often hotel guests) and convince them to isolate themselves to make it appear as though a genuine kidnap has occurred. They frequently use elaborate stories, such as claiming to be police officers or members of a well-known criminal group, to scare their victims and convince them to comply. Most cases end within 24 hours, though occasional longer incidents are testament to the perpetrators’ sophistication and credibility.

Virtual kidnappers are likely to continue developing new tactics to elicit ransom payments in the coming years. National media sources in late January reported that the Mexico City Attorney General’s Office had detected a new tactic in which extortionists use the WhatsApp telephone messaging application to carry out virtual kidnaps. Control Risks has recorded numerous incidents in which extortionists have remotely logged into their victim’s WhatsApp account to contact their loved ones. This creates the illusion that the extortionist is located with their supposed victim and that a real kidnap has taken place.

VIRTUAL KIDNAP IN COQUIMBO POINTS TO SPREAD OF CRIME IN CHILE

A domestic employee and two children on 15 March were the victims of a virtual kidnap at a house in Ovalle (Coquimbo Region). The employee answered a telephone call from extortionists, who claimed that the children’s parents had been involved in an accident. The callers demanded that the employee transfer them money, which prompted her to leave the house. Minutes later, the children answered a call from the extortionists, who convinced them to go to the Open Plaza shopping centre (mall) in Ovalle. When the children complied, the extortionists telephoned their parents, claimed that they and the employee had been kidnapped, and demanded a ransom for their release.

Since Control Risks began recording virtual kidnaps in Chile in 2015, most incidents have been reported in the Santiago Metropolitan Region. This incident points to the spread of the crime further afield. As in this case, virtual kidnappers often demand that ransom payments be made via bank transfer. This means that they do not need to be located near their targets, a fact that is likely to allow the crime to spread further beyond the capital.

Although rarely reported, sophisticated virtual kidnaps occur. In such incidents, extortionists attempt to isolate their victims before contacting their family to demand a ransom payment. There is little evidence to suggest that they use the same stories as their counterparts in Mexico, where there is greater concern about organised crime. Instead of claiming to

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Africa

HIJACK OFF SOMALIA UNDERLINES CONTINUED CAPABILITY OF PIRATE GROUPS

The owners of a bunkering tanker on 13 March lost contact with the vessel while it was transiting 15 nautical miles (28km) off the semi-autonomous region of Puntland. The vessel reported being followed by two skiffs before being boarded. The tanker’s tracking system was subsequently turned off, and the vessel was rerouted to Alula (Somalia). Aircraft from EU counter-piracy military operation EU NAVFOR monitored the vessel’s movements and confirmed the incident, which was the first hijack-for-ransom of a commercial vessel attributed to Somalia-based pirates since May 2012.

The incident was likely to have been an opportunistic attack, with remnants of pirate groups once active in the area likely to have taken advantage of the vessel’s sailing route close to the coast. Former pirate networks in Puntland have been dormant for several years, and have not carried out an attack since 2014. Instead, groups have turned to other types of illicit activity, including weapons smuggling and human trafficking.

Hijack-for-ransom poses a high threat to commercial operators transiting along the northern and eastern Somali coast. Groups based out of central-eastern Somalia in October 2016 carried out an attempted hijack on a product tanker in the western Indian Ocean. The most recent case demonstrates that Somali criminal groups retain the intent and capability to target commercial assets, despite a very low number of incidents in the past five years.

Nonetheless, the incident is unlikely to herald a return to pre-2013 levels of the crime. At the height of Somali pirate activity between 2008 and 2012, gangs held dozens of victims and multiple vessels at once, and would target both commercial shipping and pleasure craft. However, the deployment of foreign naval assets, along with the adoption of on-board armed security teams, increased vessel hardening measures, and the establishment of a judicial process in and outside the region to arrest and try pirates have since stemmed attacks.

Despite the continued militant threat in Puntland, it is highly unlikely that Somali Islamist militant group al-Shabab or a local cell of Islamic State (IS) active in Puntland’s Bari region are connected to the incident. Al-Shabab has tried and failed to increase its presence in Puntland, while IS fighters – who in late 2016 briefly held the port town of Qandala, which lies east of Alula – appear to only target installations associated with the Puntland government. Counter-terrorism operations by foreign forces in the Gulf of Aden have also undermined the capability of the IS cell.

belong to well-known criminal groups, extortionists in Chile commonly claim that the victim’s loved one or employer has been involved in a car accident.

AsiaRARE HIGH-PROFILE ABDUCTION HIGHLIGHTS CAPABILITY OF GANGS IN MALAYSIA

In a rare cross-jurisdiction abduction, the wife of a Malaysian-Chinese businessman on 21 February was kidnapped from her home in Putra Kulai (Johor state) and taken by boat to Batam (Indonesia). The kidnappers held the victim at a farm for 27 days, during which they demanded a ransom of USD 3m, which was allegedly paid by her family in full. The victim was reportedly rescued in a joint operation between Malaysian and Indonesian police that resulted in the arrests of at least 18 Malaysians and Indonesians.

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Middle East

KIDNAP OF FOREIGN NATIONAL IN BASRA REMINDER OF PERSISTENT THREAT IN IRAQ

Kidnappers on 7 March abducted a Lebanese businessman in Basra (Basra province). Security forces in the early hours of 8 March reportedly rescued the victim from a house and arrested one suspect. The kidnappers had blindfolded the victim and tied his hands. The incident may have been linked to a business dispute in which the victim was in competition for a contract.

Incidents involving foreign nationals remain infrequent. Kidnappers continue to view foreigners as attractive targets, but the security measures employed by most foreigners deter the majority of low-level criminal gangs. However, regardless of motive (financial, political, personal/business dispute), kidnappers are watchful and will take advantage of any potential lapses in security.

Basra province remains a significant hotspot for kidnapping. Criminals dominate the trend in the province, but sectarian kidnaps also occur. The province accounted for 20% of all reported cases in federal Iraq in 2016, including those areas under Islamic State (IS) control. Although kidnapping is more prevalent in IS territory, the crime there is underreported compared with other IS activities. IS uses kidnapping to quell dissent and raise funds in its territories, and recent reporting indicates the group continues to struggle with cash flow. IS may return to more high-profile kidnaps with significant ransom demands in a bid to fund itself and generate media interest. However, it has not yet demonstrated the capability to carry out abductions in Iraq outside its immediate territory, and IS-linked kidnaps in Basra are highly unlikely.

Given the level of capability needed to successfully orchestrate an international abduction, the perpetrators are likely to have had to plan the kidnapping in detail in advance, including undertaking some reconnaissance of the victim’s personal profile. The high ransom demand suggests that the kidnappers are likely to have been aware of the victim’s husband’s financial status.

This incident demonstrates the significant capability of the group responsible, and highlights that isolated cases of this nature can still occur in a country where low-level kidnapping predominates. Throughout most of the country, kidnapping is largely perpetrated by low-capability criminal gangs, which target a wide demographic of victims, both local and expatriate (usually individuals of South Asian origin).

Victims are normally held captive in Malaysia. Consequently, criminals tend to opt for swift negotiations, and most cases are resolved in fewer than seven days. Short-duration kidnaps serve a dual purpose of reducing the chances that the kidnappers will be arrested and allowing them to quickly move on to the next victim to maintain their income. In this case, the kidnappers benefited from removing the victim to another country, complicating the police investigation into her whereabouts and allowing them more time to conduct the negotiation.

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CHINESE MAFIAS: THE EXTORTION THREAT IN ARGENTINA AND BEYOND

Given the prevalence of extortive crime across much of Latin America, the threat posed by Chinese mafias is often overlooked. As well as prostitution, people smuggling and illicit gambling, such groups also engage in extortion. Argentine media source Perfil on 26 February reported that mafias in Buenos Aires – all local factions of global organisations – were challenging the dominance of a group known as Pixiu. A series of raids targeting Pixiu by Argentine Federal Police and Chinese authorities in Buenos Aires in mid-June 2016 shone a light on the workings of a section of the region’s criminal underworld that is rarely given media coverage. Argentina is widely considered to be the Latin American stronghold of Chinese mafias. However, the situation in Argentina also provides an insight into how such groups operate elsewhere, from the Southern Cone to the US border.

CHINESE MAFIAS IN ARGENTINA

Smuggling immigrants into Latin America brings in tens of millions of dollars for these mafias. As integration between China and the Americas has grown, so too have these groups’ potential profits. However, extortion is also key to their operations. According to Argentine media source Infobae, Pixiu alone earned as much as USD 1.5m every month from extorting approximately 300 supermarkets. These mafias earn this money almost entirely from targeting Chinese-owned establishments. Far from a niche target pool, there are thought to be tens of thousands of ethnic Chinese in Argentina alone. The Huffington Post in May 2016 described the demographic as the ‘fastest growing non-Latin ethnic group’. Citing a local consulting firm, the same article reported that Chinese supermarkets – a favoured target for these mafias – contribute to almost one third of Argentina’s retail sales. Moreover, anecdotal evidence in other countries in which Chinese mafias operate suggests that the threat has widened to include the broader Chinese expatriate community. Similar trends could develop in Argentina and Latin America more generally.

Organisations such as Pixiu typically deliver their demands to target enterprises either via telephone calls or in hand-delivered notes, and some are accompanied by explicit threats. Notes offering ‘protection’ tend to be in the target’s native dialect. Pixiu and other mafias would typically demand an initial one-off payment of USD 50,000 to be delivered within a few days. After the initial payment, businesses would have to make further monthly instalments of ARS 50,000 (USD 3,200). As a sign of their compliance, businesses have then been forced to hang certain images in their windows.

When businesses refuse to comply, mafias are capable of carrying out their threats. At the time of the June 2016 raid on Pixiu, Infobae reported on 17 legal cases involving supermarket owners who had been shot in the knees or feet for refusing to make extortion payments. Others have been murdered or suffered arson attacks at their businesses. Despite the exclusive targeting of Chinese businesses, in some incidents local recruits have been used to follow through on threats. Of the 40 suspects arrested in the June raids on Pixiu, six were Peruvian, Bolivian or Argentinian nationals.

WHY EXTORTION PROLIFERATES

Many ethnic-Latin gangs in the Americas take a scattergun approach when engaging in extortion. This means that they will issue threats and demands to all types of businesses – local, multinational, big and small – without discrimination. This facilitates the spread of extortion, making it arguably the primary crime affecting business. Extortion by Chinese mafia groups spreads for a different reason. It is their precise approach that has helped them pass under the radar. Even when gangs carry out their threats, there is rarely any collateral damage involving local nationals. The close-knit nature of many Chinese communities keeps the threat concealed and elusive.

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As well as preventing it from becoming a concern for society at large, the exclusive targeting of Chinese communities also impedes police operations. Extortion is a highly underreported crime, and this is also the case within Chinese communities, where a target’s fear of reprisal prevents them from involving the police. The authorities are also hamstrung by a lack of resources. For example, few police departments have Chinese-speaking officers within their ranks, a fact that severely hampers investigations and complicates infiltration of criminal networks. The collaborative raid on Pixiu by the Argentine police and Chinese authorities was a positive step, but much more cooperation will be required to inflict a lasting blow. This is especially clear given that other Chinese mafias are already competing for control of Pixiu’s areas of influence.

ARGENTINA AND BEYOND

Although Argentina is a focal point for Chinese mafia organisations, they operate across the region, including in the Andes and as far north as the US-Mexico border. In a recent reminder, Brazilian police – with the support of an officer from China – on 8 March arrested between eight and 14 suspected members of one such group accused of engaging in extortion in São Paulo. The group would also allegedly kidnap Chinese nationals for ransom when they arrived at the Guarulhos International Airport. The police were reported to be searching for more suspects, some of whom had entered the country from Paraguay.

The growing presence of mafias from China operating in Latin America is partly a consequence of the deepening economic relationship between the two since the millennium. With further increases in trade, investment and immigration, they are unlikely to disappear fast.

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KENYA: ABDUCTIONS NEAR SOMALI BORDER UNDERSCORE PERSISTENT ISLAMIST KIDNAPPING RISK

Three teachers on 1 March were kidnapped from a school in the Hagadera refugee camp in Dadaab (Garissa county) near the Kenya-Somalia border. Three armed gunmen reportedly seized the victims from a communal sleeping area in the school. The subsequent closure of a major nearby border crossing into Somalia suggests that the security forces suspect Somali Islamist militant group al-Shabab was responsible for the abductions. However, statements by police two weeks after the abduction expressed the belief that the teachers were still being held in the sprawling refugee camp. If it is confirmed that al-Shabab was behind the abduction and that the victims were kept in safe houses within the camp, it would provide further evidence of the freedom of movement and support network that the Somali Islamist network enjoys there. The abduction follows an attempted kidnap of another teacher in the camp in February by a small group of suspected al-Shabab fighters, which was ultimately unsuccessful.

Al-Shabab first emerged a decade ago and at various points since has controlled large swathes of Somalia, including the capital Mogadishu. A multinational military taskforce fielded by the African Union (AU), in which Kenya plays a large role, has succeeded in capturing much of the territory controlled by the group. Since Kenya’s military entered Somalia in 2011 as part of the AU Mission in Somalia (AMISOM) force, insecurity on its side of the border has ramped up significantly, as al-Shabab has undertaken a two-pronged strategy of carving out safe space for itself in the remote border region and punishing Kenya for its participation in the intervention. Over the years, al-Shabab has been responsible for regular attacks on security forces and civilians, as well as many kidnaps of aid workers, military and security personnel, and civilians.

The overcrowded refugee camps dotted around the town of Dadaab have proven especially rich hunting grounds for the militants, who easily blend in with its Somali residents. Built to accommodate 90,000 people, the Dadaab refugee complex (comprising the Hagadera, Ifo and Dagahaley camps) now houses upwards of 450,000 people. Professionals working for the camp’s support services, such as security, health and teaching staff, are among the favoured targets of al-Shabaab. The refugees themselves not considered lucrative targets for kidnap-for-ransom.

One of the earliest kidnaps attributed to al-Shabab in the area occurred in 2012, when suspected militants kidnapped four foreign NGO workers while they were driving through one of the camps. They were subsequently taken to Somalia, where a pro-government militia freed them soon afterwards. In another incident targeting the NGO community two aid workers, one Kenyan and one Somali, were kidnapped in the Hagadera camp in October 2015 and taken to Somalia. a joint security operation conducted by both countries’ militaries resulted in the freeing of the victims following six days in captivity.

Militant kidnaps do not occur only around Dadaab and the refugee camps. Mandera county, located in Kenya’s north-eastern border region with Somalia, is a particularly high-risk area for al-Shabab kidnaps and attacks. For example, al-Shabab militants in April 2015 seized a local chief on the road to Mandera town. Militants later tied him to a tree and shot him dead after locals failed to pay a ransom of KES 4m (USD 43,700).

Nor are al-Shabab kidnaps and attacks confined to Kenya’s north-eastern border with Somalia. Two kidnaps targeting Western nationals in 2011 and 2012 in the coastal county of Lamu (Lamu county) were attributed to the group, which was also blamed for a raid on the town of Mpeketoni (also Lamu county) in 2014, in which almost 50 people were killed. The group also claimed the attack on the Westgate shopping centre (mall) in the capital Nairobi in September 2013, in which more than 60 people were killed.

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AMISOM has successfully disrupted al-Shabab by taking back much of the territory and population centres it once held. However, the group has since returned to its heavier focus on asymmetrical operations. It routinely carries out suicide and gun attacks on high-profile targets in Mogadishu, including hotels, parliament and various ministry offices. However, it is struggling to stay afloat financially, with the loss of territory impacting its ability to fund itself through taxing the local population and lucrative charcoal production industry in south-eastern Somalia. As a result, kidnap-for-ransom is likely to continue to represent a central pillar of al-Shabab’s strategy. With valuable targets hard to find in the Somali interior, the group will continue to look to the NGO and civilian presence around the Kenyan border for opportunities.

Local security sources have claimed that al-Shabab members have infiltrated many of the other larger communities in the region, as well as the refugee camps, and report on the movement of security forces and potential kidnap victims. Operators with personnel in the area should continue to adopt stringent security precautions, especially while in transit. Security escorts are necessary when moving between communities or camps in the region, and routes should be varied wherever possible to counter surveillance from kidnappers.

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ABOUT USControl Risks’ services are exclusively retained by Hiscox. In the event of a kidnap, detention or extortion incident covered by Hiscox, clients will benefit from Control Risks’ services as part of their insurance policy.

CONTROL RISKS

Control Risks is a leading international business risk consultancy. It offers a range of integrated political risk, investigative, security and crisis management services to corporate, government and private clients worldwide.

Since its foundation in 1975, Control Risks has advised clients on the resolution of 3,088 kidnap and extortion cases in 136 different countries, with 49,778 person-days aggregate duration. Cases have ranged from traditional kidnaps-for-ransom, express kidnaps, hostage takings, ship and aircraft hijacks to political detentions, product extortion and contamination and other threat extortions. Control Risks has a full-time team of Response Consultants, available for immediate deployment in response to a crisis anywhere in the world. Response Consultants will advise on negotiation strategies and on how to manage the various interests of the victim, family, employers, the media, the government and local law enforcement agencies.

The Response Division has its own dedicated team of research analysts. As well as supporting consultants deployed on cases, they maintain the International Kidnap Online Service (IKOS) which follows the trends in kidnapping worldwide and allows clients to assess the risk to their business. In addition to IKOS, Response Research produces commissioned kidnap and extortion analysis of any country or sector. If you are interested in any of these services, please write to [email protected]

For more information about Control Risks, please visit our website at www.controlrisks.com

HISCOX

Hiscox is the world’s largest provider of specialist kidnap, detention and extortion insurance, with a market share of 60-70% by premium income. We cover companies and individuals against all forms of extortion and can protect your assets from illegal demands and the consequential associated expenses.

Our clients include multinational companies operating in high risk regions of the world, key executives working in commercially sensitive positions and individuals whose wealth or fame may attract the attention of criminals.

Hiscox kidnap and ransom underwriters are the most experienced in the field. Our knowledge of the sector enables us to make quick decisions on cover, no matter how unusual the request. We are highly skilled in handling what may be a very difficult and sensitive emergency. Our specialist policies can be tailored to suit individual needs and circumstances.

We have underwriting teams based in Guernsey, Paris, Cologne, New York, Los Angeles, Chicago, San Francisco and at Lloyd’s of London.

For further information, please contact us at [email protected]

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kidnap y - hiscox special risks · 21 february was kidnapped from her home in putra kulai (johor...

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