By Daphne Psaledakis and Michelle Nichols
WASHINGTON/NEW YORK (Reuters) – 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.
(Reporting by Daphne Psaledakis and Michelle Nichols; Editing by Chris Reese and Dan Grebler)
