US issues new sanctions on alleged Houthi financing network

The United States has issued fresh sanctions on alleged members of an illicit network financing Yemen’s Houthi rebels, citing the group’s involvement in the continuing war in Yemen and recent drone and missile attacks on Washington’s Gulf allies.

In a statement on Wednesday, the US Department of the Treasury said the network “has transferred tens of millions of dollars to Yemen via a complex international network of intermediaries in support of the Houthis’ attacks”.

The new sanctions target alleged front companies and ships that the US says worked with a branch of Iran’s Islamic Revolutionary Guard Corps to smuggle petroleum and other commodities around the Middle East, Asia and Africa to help fund the Houthis.

“Despite pleas to negotiate an end to this devastating conflict, Houthi leaders continue to launch missile and unmanned aerial vehicle attacks against Yemen’s neighbors, killing innocent civilians, while millions of Yemeni civilians remain displaced and hungry,” Treasury Under-secretary Brian E Nelson said in the statement.

The Houthi rebels have ramped up their missile and drone attacks against Saudi Arabia and started directly targeting the UAE in recent weeks, but the penalties appeared to fall short of the tougher measures that the Saudis and Emiratis, key strategic partners of the US, had sought from the Biden administration.

US officials have been in talks with Saudi Arabia and the United Arab Emirates as the crisis in Ukraine worsens high petroleum prices and a supply shortfall globally.

President Joe Biden said last month that the US was considering redesignating the Houthis and Houthi leaders as “terrorists”, a step that typically carries harsh US government penalties for those doing business with them.

Rights groups and aid organisations have cautioned against blacklisting the Houthis, however, saying that such a move would worsen the humanitarian crisis in the country, where millions face deepening hunger and poverty.

On Wednesday, a group of US senators led by Chris Murphy urged (PDF) the Biden administration not to redesignate the rebels, saying such a move “would precipitate an economic collapse, dramatically deepen the country’s severe humanitarian crisis, and could undermine the prospects for peace in Yemen”.

The Trump administration imposed the “terrorist” designation on the Houthis in its last days. The Biden administration lifted it as one of its first acts as aid groups said the penalties would scare away commercial food suppliers and humanitarian efforts. An estimated 80 percent of Yemenis live in territory under Houthi control.

The Biden administration last year sanctioned a man it accused of acting as the Houthis’ lead financier, Sa’id al Jamal, as well as other alleged members of the smuggling network. Wednesday’s sanctions name additional individuals and businesses that it said were part of al Jamal’s network.

The measures, which the US said were imposed in “coordination and collaboration” with its Gulf partners, also targeted traders and money exchange houses based in Yemen, the UAE, Turkey and other countries.

Later on Wednesday, the UAE announced it was blacklisting one individual and five entities that had been sanctioned by the US, including businessman Abdo Abdulla Dael Ahmed.

A Saudi-led, US-backed coalition, which included the UAE, intervened in Yemen in 2015 to push back the Houthis, who had taken over most of the country, including the capital Sanaa, and to restore the Gulf-backed government of Yemeni President Abd-Rabbu Mansour Hadi.

The war has brought Yemen to the verge of famine, sparking what the United Nations has said is the worst humanitarian crisis in the world.

The coalition accuses the rebels of being proxies of Iran – a charge that both the Houthis and Tehran reject.

The Houthis last year rejected a US-backed Saudi proposal for a ceasefire, insisting that lifting a blockade on Yemen, including reopening Sanaa airport, is a prerequisite for ending the war.

On Wednesday, Washington accused the Houthis of prolonging the conflict and urged them to “negotiate in good faith without preconditions” to end the war.

“We continue to work closely with our regional partners to act decisively against those seeking to prolong this war for their own goals,” Secretary of State Antony Blinken said in a statement.

“The United States remains firmly committed to helping Saudi Arabia and the UAE defend themselves and the tens of thousands of US citizens living in the Gulf against these Houthi attacks.”