The United States on Monday approved all transactions involving Yemen’s Houthi movement for the next month as Washington reviews a Trump administration designation of the Iran-aligned group as a foreign terrorist organization.
The move appeared designed to allay fears of companies and banks involved in commercial trade to Yemen, which relies almost solely on imports. The Treasury Department in a Frequently Asked Question specifically stated that foreign banks will not be exposed to sanctions “if they knowingly conduct or facilitate a transaction” for the Houthis.
“It essentially wipes out the entire effect of the designation while giving the Biden administration a chance to make the decision on its own rather than getting stuck with Mike Pompeo’s decision,” said Brian O’Toole, a former Treasury official under the Obama Administration.
Former U.S. Secretary of State Mike Pompeo blacklisted the Houthis last Tuesday – a day before President Joe Biden took office – despite warnings from the United Nations and aid groups that it would push Yemen into a large-scale famine.
The Trump administration exempted aid groups, the United Nations, the Red Cross and the export of agricultural commodities, medicine and medical devices from its designation, but U.N. officials and aid groups said the carve-outs were not enough and called for the decision to be revoked.
The U.S. State Department said on Friday that it has initiated a review of the designation and is working as quickly as it can to conclude the process and make a determination.
The new Treasury Department license issued on Monday allows all transactions involving the Houthi group or any entity in which it owns 50% percent or more – though not its blacklisted leaders – until Feb. 26, 2021.
The United Nations describes Yemen as the world’s biggest humanitarian crisis, with 80% of its people in need.
A Saudi Arabia-led military coalition intervened in Yemen in 2015, backing government forces fighting the Houthis in a war widely seen as a proxy conflict between U.S. ally Saudi Arabia and Iran. U.N. officials are trying to revive peace talks to end the war as Yemen’s suffering is also worsened by an economic collapse and the COVID-19 pandemic.
Following the designation of the Houthis as a terrorist organisation tens of thousands of Yemenis marched in Sanaa on Monday, heeding a call by the Iran-aligned Houthi movement to condemn this move by the United States and for backing the Saudi-led military coalition that is battling it.
The protesters filled a wide avenue in the Houthi-held capital, many holding banners that read: “America is the mother of terrorism”.
The Trump administration’s designation of the group as a foreign terrorist organisation took effect on Jan. 19 but is being reviewed by the new administration of Joe Biden.
U.N. officials and aid agencies have called for the move to be revoked over concerns it could trigger a large-scale famine and complicate efforts to end the war that has killed more than 100,000 people and left 80% of the population in need of aid.
“The American (designation) decision … does not only concern one group, but concerns every Yemeni, and thus, its consequences will be felt amongst all Yemenis,” Houthi official Mohammed Haidara, who was among demonstrators, told Reuters.
Northern Yemen is held by the Houthis, who ousted the internationally recognised government from power in Sanaa in late 2014, prompting the Saudi-led coalition to intervene months later.
The United States and other Western nations have provided arms and intelligence to the coalition.
The United States and Saudi Arabia see the Houthi movement as an extension of Iranian influence. The Houthis deny being puppets of Tehran and say they are fighting a corrupt system.