Sanaa – As part of its effort to strangle the Yemeni Ansar Allah group (Houthis), the US Treasury Department imposed sanctions last Friday on a commercial bank operating in areas under the group’s control, in a measure that is the first of its kind targeting a commercial bank owned by the private sector.
The sanctions come in conjunction with the air strikes launched by Washington on Houthi sites in the Yemeni capital, Sana’a, and a number of cities under their control, in the context of a policy of continuous pressure to prevent and stop the missile attacks that the group has launched against Israel for more than a year.
In a statement published by the US Department, Acting Under Secretary of the Treasury for Terrorism and Financial Intelligence, Bradley T. Smith, justified the measure by saying that the Houthis relied on the Bank of Yemen and Kuwait “to access the international financial system and finance their destabilizing attacks in the region,” saying: “The United States is committed to disrupting these channels.” Illegal.
The ministry explained that the bank’s classification is based on previous sanctions imposed by the ministry, targeting exchange companies and international financing networks responsible for directing illicit proceeds from Iranian oil sales to the Houthis.
The United States imposes sanctions on the Bank of Yemen and Kuwait, which provides financial support to the Houthis and Hezbollah. Read more: #USAwithYemen pic.twitter.com/61uPVP5cNf
— US Embassy Yemen US Embassy in Yemen (@USEmbassyYemen) January 17, 2025
On February 16 of last year, the administration of outgoing US President Joe Biden included the Houthi group on the list of global terrorist entities, which allowed the US Treasury to impose sanctions on individuals and entities associated with the group.
Immediate response
The recent economic sanctions are widely viewed as a floundering policy of the US administration, which is leaving the White House today.
Deputy Chairman of the Media Authority of the Ansar Allah group, Nasr al-Din Amer, told Al Jazeera Net that the US sanctions are “aggressive measures targeting the entire Yemeni people,” indicating that the sanctions mainly target the Yemeni banking sector.
He added that all these sanctions will not dissuade the Yemeni people from their supportive stance toward the Palestinian issue, “because it is a stance of faith.”
According to Amer, “The Yemeni people will not back down from their support of the Gaza Strip, and will never remain silent regarding any sanctions, but will seek to confront them and respond to them, God willing.”
Less than 24 hours after the American decision, Israel announced the interception of two missiles launched from Yemen targeting southern Israel before penetrating Israeli airspace, while the Ansar Allah group vowed “appropriate military action” with any Israeli violation of the ceasefire agreement in Gaza that entered into force. Yesterday morning, Sunday.
The Bank of Yemen and Kuwait said, in a statement seen by Al Jazeera Net, that the timing and motives of the sanctions have a political background related to the current escalation between the United States and the Sanaa government, and are not the result of the bank’s violation of international banking rules and norms.
He explained, reassuring his clients, that the classification decision does not have a direct impact on the bank’s financial position, but rather only affects the bank’s operations of an international nature. While the US Treasury said that it would use all available tools to prevent the Houthis from accessing the global financial system.
Bypassing penalties
Abu Bakr Baabid told Al Jazeera Net, an economic expert and head of the Chamber of Commerce and Industry in the city of Aden, which the internationally recognized Yemeni government has taken as a temporary capital: The Houthis are able to bypass these sanctions through exchange offices, banks, and financial intermediaries, as they have previously bypassed similar sanctions.
Last December, the US Treasury imposed sanctions on 12 individuals and entities, including the governor of the Central Bank of Yemen in Sanaa, affiliated with the Houthi authority, Hashim Al-Madani, “for his role in arms trafficking, money laundering, and shipping Iranian oil,” according to US data.
Baabid called for the sanctions to include the entire Houthi banking sector if the United States wanted to tighten the screws on the group, noting that what happened was only a threat.
Economic analyst Najib Al-Adoufi told Al Jazeera Net: This measure represents a financial blow to the Houthis, but it is not fatal, as it will create difficulties for the group, which will resort more to its unofficial channels, which are more dangerous and complex methods. The Houthis have an extensive exchange network that is linked to distant external intermediaries. About censorship.
Economic consequences
But the first sanctions of their kind have sparked widespread controversy and fears of their impact on the economy and the dilapidated financial system in Yemen, as commercial banks constitute the last resort for financial transfers from abroad that Yemenis rely on, in addition to being channels for funds allocated for humanitarian aid to reach the country.
According to an employee at the Bank of Yemen and Kuwait who spoke to Al Jazeera Net, the bank was one of the banks used by international and local organizations in cash distributions to those affected by the war in Yemen.
The bank, which was established in 1977, is one of the few commercial banks still operating in the Houthi-controlled areas, which represent the most populous cities and governorates in Yemen, where about 70% of the country’s total population is concentrated, according to government estimates.
Al-Adofi believes that these sanctions will discourage banks, banks and financial institutions in Yemen from dealing with the Houthis for fear of being included in the international sanctions list and being financially isolated, which will have a greater impact on the banking sector than its impact on the Houthis.
But economic expert Baabid said that the arrival of aid will not be greatly affected by the recent sanctions, because international agencies do not depend on it much in distributing and transferring funds allocated for humanitarian aid in a country witnessing one of the largest humanitarian crises.
