The Spanish Crown has vowed to secure its Presidios, preserve its stranglehold over the New World, and regain total control of the Caribbean - if it means hunting down every last Pirate alive. Any Brotherhood that captures a Presidio must be ready to defend it against waves of attacking Spanish forces (not to mention fellow Pirate Brotherhoods). In exchange for undermining the Spanish, the British have set aside their differences with the great pirate Brotherhoods and arranged Letters of Marque secretly granting them full King's Pardons for each successful defensive victory against the Spanish armada. These can be used to Pardon your units - making them cheaper to maintain and giving them higher defensive and offensive statistics then your regular crew. All Pardons earned from defeating Spanish attacks are kept and issued from the Presidio where the battle took place, and can be accessed by any Brotherhood member who's Crew participated in its defense.
You can Pardon increasingly advanced Pirate Unit types by developing a Presidio's level:
Level 2 - Pirates
Level 3 - Mercenaries
Level 4 - Fleet
Level 5 - Armada.
Bear in mind that a Presidio will attract more Spanish attacks with each additional upgrade level. This in turn will provide you with more Pardons, with which you may Pardon more crew.
The Brotherhood Leaders can transfer King's Pardons between Presidios as they deem fit, although some King's Pardons will be lost depending on the Presidios' respective levels and distance from each other.
Send Crew to one of your Brotherhood's Presidios and open the King's Pardon window. Select the number and type of Units you wish to Pardon, and press 'Pardon'. You can review the Presidio's Pardoning History from the 'Pardons Granted' window in the Presidio interface.