A number of press reports today, including this one, indicate that the Obama Administration will announce on Wednesday that it was revising its policies and will no longer threaten to prosecute families that pay ransoms to terrorists in an effort to release their loved ones. The stories that I read appear to believe that paying ransoms is, in general, a violation of federal law. Readers of this blog will, of course, probably know that such payments are illegal only when the persons receiving the ransom are on the Specially Designated Nationals and Blocked Persons List. In many cases of hostage taking in the Mideast, the responsible groups are indeed on the list and so payment to those groups, no matter how well-intentioned would otherwise be illegal.

How exactly this exemption will be accomplished is not made clear in the news reports. This is an interesting question. It hardly seems likely that the White House will direct the Office of Foreign Assets Control to issue a general license for hostage payments by family members. This leads to an even more interesting question. Even if the DoJ, under the new policy, will not prosecute or threaten to prosecute families making such payments, will there still be a chance of administrative penalties imposed by OFAC on families that make ransom payments to SDNs?

This is not an entirely far-fetched question. Remember that OFAC has previously said that payments should not be made to pirates without being certain that the pirates were not on the SDN List, leading, of course, to the logical question as to how that was to be done. Do you make the pirates show you their passports before you drop the money on the ship?

Payments of ransoms are, of course, a thorny policy issue given that such payments undoubtedly encourage further kidnappings. On the other hand, it is hard to ask families to sacrifice their own loved ones on the chance that this will deter future kidnappers and save other people’s husbands, wives, sons and daughters.