UK to prohibit insurance payments to terrorists for ransom and jail insurance executives for up to 14 years for terrorist financing on conviction

By Christine Duhaime | December 6th, 2014

Ransom payments

The UK government’s proposed Counter-Terrorism and Security Bill 127 (the “Counter-Terrorism & Security Act“), now at Second Reading in the UK Parliament, will prohibit insurance companies from making ransom payments to terrorists and terrorist organizations.

The provision would amend §17, the counter-terrorism financing part of the UK Terrorism Act 2000, to make it an offence for an insurer to make a payment of money or any other property in response to a demand for terrorism if they know or suspect its in response to a ransom demand.

Moreover, the provision renders directors, managers, secretaries and officers of an insurance company guilty of the offence of terrorist financing if the insurance company is convicted of making a ransom payment for terrorism in cases where the executives or directors acted with neglect, or consented or connived in respect of the payment to the terrorist or terrorist organization.

14 year jail sentence

Officers and directors who are convicted are liable to a term of imprisonment of up to 14 years, to a fine, or both. If an executive is convicted, the amount paid to the terrorist organization or terrorist by the insurance company is subject to forfeiture by the executive personally.

Clarifies illegality of financing terrorists by ransom payments

The Counter-Terrorism & Security Act does not necessarily change the law in a material way. That is because counter-terrorism laws, and some sanctions laws and international law generally already prohibit terrorist financing and make it a criminal offence to provide or receive money or other property (including insurance proceeds) knowing or suspecting that it will or may be used for the purposes of terrorism. As the UK government noted, such payments were already “illegal“.

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