And they say Lawyers have no imagination! Or was it ethics.... or was it... ah nm.

C'mon Lecter, stories, word of mouth, oral tradition, etc etc?...

Just because there is a vaccum of national intelligence gathering magicians in grey space doesn't mean stories, myths, hymns, haikus, pedantic pseudo-intellectual babbling.... won't eventually reach the ears of those in charge back home.

yeah, I've got nothing against that. Its unmonitored in that they can't DO anything about it while you're in grey, but the factions should treat you the same.

However, because its by word of mouth, you can reduce the faction penalties while in grey.

What about black boxes, or the equivalent thereof? It seems a bit unlikely that the traders won't have some kind of automated logging device that sends out their logs in case things go horribly awry. Penalties could (or rather, should) be reduced, like Shape said, since it's farther away, but it could possibly also be linked to what the ships were carrying. Say the Serco Dominion desperately needs new plasteel for ship construction, and you just blew up a connie full of it, the penalty would be more severe (but not open-ended). If you just blew up a ship carrying, I dunno, Earthly Summers discs, the porn cinema owners will throw a fit, but the Serco Dominion would be rather indifferent.

Yes. Like I said, there are still faction penalties for crimes committed in grey space, but enforcement only happens in nation space. So if you hang out in grey space and become GBI's #1 most wanted, if you set foot back in nation space you're humped. (GBI=Glactic Bureau of Intelligence).

I think the faction system is going to be redone in the future. When it is, I hope they redo the infraction system as well, and bring back bounties (which will only help when death means something, i.e. ships are somewhat more expensive). Each nation could keep track of crimes committed by everyone anywhere but in another nation's space. For example, Serco would keep track of the crimes of any player that are committed in Serco nation space and in grey space. Criminals would earn a "Wanted" rating (kind of like in EV), and higher ratings would warrant harsher punishments and higher bounties. When a bounty is collected, the player with a bounty on his head would be reduced in wanted rating. Crimes would only be counted if they are "witnessed." A crime is witnessed by any third party (station, player or NPC) or if the victim survives. It would also be cool if some NPCs were criminals (in addition to pirates). The game already keeps track of kills/encounters, I believe, a black box shouldn't be hard to implement.

Guilds could keep their own wanted list, and offer their own bounties (you don't even need a "bounty system" to do this, it would work right now). If eventually players run governments like a big guild, they could handle that, too. That's the only good way I see to handle the scenario you suggest, of a higher punishment for killing a more important convoy. Players know what angers them better than a computer.

I am sure the Blackbeard operated in UNMONITORED seas too, in those good old days of yore.