The Islamic State group recently confirmed the beheading of Haruna Yukawa, one of the two Japanese hostages. Japanese Prime Minister Shinzo Abe, believes the released images and voice recordings are genuine, and has called the act “an outrageous and unforgivable act and called for the “immediate release” of Goto.

Led by Abu Bakr al-Baghdadi, ISIL’s roots are in al Qaeda in Iraq (AQI). After the formation of the Islamic State in Iraq (ISI) in October 2006, the group progressed and later absorbed the militant group in Syria known as Jabhat al-Nusra on April 8, 2013. Al-Baghdadi then declared that his group would be known as Islamic State in Iraq and Syria (ISIS). However, with the group’s intentions to extend beyond those borders, they’re frequently referred to as ISIL, the Islamic State of Iraq and the Levant.

The group originally demanded a $200 million ransom payment from the Japanese government, releasing video footage of the two bound hostages with the now notorious “Jihadi John,” the masked figure responsible for beheading several prisoners. Before the 72-hour deadline passed, the mother of the second, and now only surviving prisoner Kenji Goto made a public plea for her son’s life,

“I have been just crying for the last three days, filled with sadness. Words fail to describe how I feel. Kenji always has been a kind person ever since he was little. He was always saying, ‘I want to save the lives of children in war zones.’”

Between the public outrage, the lives that hang in the balance, and the terrorist demands, Japan wrestles with the major ethical dilemma that any nation faces in negotiating, and potentially funding extremist groups.

The United States have a strict policy against paying ransoms and any form of exchange. American companies or private organizations face charges of funding terrorism if they attempt payments. The British Government likewise has stated a firm position against payouts, but demonstrated mutability in 2010; £600,000 was put forth by individuals and organizations and paid to Somali pirates who attacked the yacht of Paul and Rachel Chandler and held them captive for 13 months.

In contrast, many European nations have directly paid ransoms. As it played out, more than 20 hostages were taken by ISIL in 2014. Apart from one European hostage, and the most recent from Japan, all other executions have fallen on US and UK citizens. Prisoners from Spain, France, Italy, Denmark, and Switzerland were released after negotiations with respective government officials.

The US has reasoned that any time a ransom is paid, it affirms and encourages future kidnappings as a viable revenue stream. However, professor Carolin Goerzig, who teaches terrorism research at Virginia Commonwealth University noted, “At the same time not paying ransom does not deter these groups from kidnapping either, so it seems to be a lose-lose situation for the U.S. government.”

The New York Times last year questioned the significance of external contributions and “KfR” (Kidnapping for Ransom) as ISIL’s major sources of funding. Rather, The Times stated, “ISIS’s meticulous records show that its money came mostly from protection rackets that extorted the commercial, reconstruction, and oil sectors of northern Iraq’s economy. Which supports Goerzig’s assertion that finances are secondary, and that ISIL is more interested in publicity with their kidnappings; a point that resonates more with the European government than the US and UK.

As the debate continues, Japanese Prime Minister Shinzo Abe has come under fire, leading up to the death of Yukawa, he made the public statement, “I ordered the cabinet to save the lives of the hostages using whatever available measures, and by fully utilizing all existing diplomatic channels and routes.”

With the question of money out of the picture—ISIL now demanding a prisoner exchange—the world looks on to see how far Abe’s statement, “We will never yield to terrorists” will be stretched.