On February 23, the United States took a major step in supporting allies Saudi Arabia and the United Arab Emirates by announcing sanctions against key members of an international financing network accused of diverting funds for Yemen’s Houthi rebels, reports The Independent. The sanctions were launched in response to recent conflict escalation by the Houthis, who have launched an increasing number of missile and drone strikes against Saudi Arabia and the UAE. As Reuters reports, this widespread financial network, run by Iran’s Islamic Revolutionary Guard and a Houthi financer, has helped funnel tens of millions of dollars to the rebel group to fund its military operations against the Saudi-led coalition government.
The Houthis have previously been backed by Iran, and the Iranian government continues to support the group’s campaign in Yemen against the Saudi government, its main regional rival. Voice of America reports that the rebel group seized control of the capital of Yemen, Sana’a, and most of the country’s northern territory in 2014. In response, the Saudi government led a coalition in a military campaign against the rebels in 2015 to keep a puppet Yemeni government in place, which has seen limited success.
The Houthi group has resisted attempts by the Biden administration to coordinate peace negotiations between them and the Saudi government, instead escalating their missile attacks against American partners in the Gulf region. U.S. military forces in the UAE have launched Patriot missile batteries to protect against airstrikes in response.
This financial network is reported to have used an intricate design of front companies and individual actors to ship fuel and other petroleum products throughout the Middle East and into Asia and Africa, Reuters continues. The Treasury Department reports that the new sanctions have been launched after extensive consultation and collaboration with the United States’ regional Gulf partners. These sanctions will freeze all assets of the targeted individuals or entities that are subject to American jurisdiction and bar Americans from conducting any business with them in general.
However, according to The Associated Press, these sanctions installed by the U.S. Treasury Department were less severe than the Gulf partners had requested. This position has shown the difficulties that the United States faces in imposing financial penalties and sanctions on the Houthis, who have immured themselves to Western financial networks. Economic sanctions also risk worsening the humanitarian crisis, including famine and cholera, in the poorest country of the Arabian Peninsula, a situation which Al Jazeera reports has caused aid organizations and human rights groups to caution against implementing severe sanctions against the Houthis. Many Democrats in Congress have expressed similar concerns.
Along with the sanctions, President Biden also expressed a willingness to redesignate the Houthis and their leaders officially as terrorists, which would ensure harsh U.S. government penalties for anyone involved in doing business with the group, reports Al Jazeera. Previously, the Trump administration had imposed the designation of “terrorist group” on the Houthis in his final days in office. The Biden administration lifted the designation to lessen the humanitarian crisis, but the recent attacks have caused the move to be reconsidered. The Associated Press reports that reinstating the designation is supported by Saudi Arabia and the UAE, along with some American and Yemeni politicians, as they believe the designation could deter the Houthis from further attacks and pressure them into negotiations. The consequences of the decision that the Biden administration chooses to make will likely have major repercussions upon the situation in Yemen.