SANCTIONS UPDATE: TRADING IN YEMEN

Introduction

Recently, the US has stepped up pressure on the activities of the Yemeni group, “Ansarallah” (also referred to as the “Houthi Group”, “Partisans of God”, and “Supporters of God”) through the introduction of various sanctions designations and new General Licences (GLs) under the US’ Yemeni sanctions regime.The most significant of these measures are summarised below.

The US approach is made clear by a State Department Press Statement dated 9 April 2025 which includes the following comment:

“The United States will not tolerate any country or commercial entity providing support to foreign terrorist organizations, such as the Houthis, including offloading ships and provisioning oil at Houthi-controlled ports. Such actions risk violating U.S. law.“

Designation of Ansarallah as a Foreign Terrorist Organization (FTO)

On 16 February 2024, Ansarallah was designated by the US Department of State, under Executive Order (E.O.) 13224.

More specifically, Ansarallah was added to the US list of Specially Designated Nationals (SDNs) as a Specially Designated Global Terrorist (SDGT). On 5 March 2025, this designation was extended to designate Ansarallah as a Foreign Terrorist Organisation (FTO). This designation also applies to entities owned 50 percent or more by Ansarallah.

As a result of Ansarallah being designated as a FTO, any person who knowingly provides material support or resources to Ansarallah or attempts or conspires to do so is at risk of being fined or imprisoned for up to life (provided US jurisdiction applies e.g. the offence is committed by a US national or if a transaction is conducted in US Dollars).

Financial institutions, which include insurance companies or banks, are also required to freeze funds they hold in which Ansarallah has an interest. These financial institutions must also report these funds to the US Secretary of the Treasury.

Amendments to GLs concerning Yemen and Ansarallah

The US has recently issued a number of new GLs in relation to Yemen and Ansarallah, which became effective on 5 March 2025. These new GLs have introduced various changes in relation to transactions/activities involving Ansarallah. GL25A expired on 4 April 2025 and was not renewed, so is not covered in this Circular.

GL 22A – Transactions Related to the Provision of Agricultural Commodities, Medicine, Medical Devices, Replacement Parts and Components, or Software Updates Involving Ansarallah

GL 22A permits any transactions with Ansarallah, or any entity controlled by it, which would otherwise be prohibited by the Global Terrorism Sanctions Regulations (GTSR) or Foreign Terrorist Organizations Sanctions Regulations (FTOSR) which are “ordinarily incident and necessary to the provision (including sale)” of, amongst other things, agricultural commodities to Yemen or any person providing these to Yemen.

For this purpose, the relevant agricultural commodities (including food, feed, fiber, or livestock or any their byproducts) must be ultimately intended for use in Yemen as:

• ” (A) Food for humans…or animals…;

• (B) Seeds for food crops;

• (C) Fertilizers…; or

• (D) Reproductive materials (such as live animals, fertilized eggs, embryos, and semen) for the production of food animals.”

GL 26A – Authorizing Certain Transactions Necessary to Port and Airport Operations Involving Ansarallah

GL 26A authorises all transactions otherwise prohibited by the GTSR and FTOSR involving Ansarallah or any entity controlled by it “that are ordinarily incident and necessary to the operation of or import or export of goods or transit of passengers through, ports and airports in Yemen…”. However, GL 26A expressly excludes transactions relating to the import or export of refined petroleum products.

GLs 23A, 24A, and 28A – Authorizing of Transactions for Telecommunications, Diplomacy, and Personal Remittance, etc.

New GLs have also been issued in relation to telecommunications, mail, and certain-internet based communications transactions (GL 23A superseding GL 23), non-commercial personal remittances (GL 24A superseding GL 24), and transactions for third-country diplomatic and consular missions involving Ansarallah (GL 28A superseding GL 28), which should be considered where relevant although these GLs are unlikely to apply to ordinary commercial transactions involving Yemen.

Additional Designations under the Yemeni Sanctions Regime

The US has also recently designated several further individuals and entities, for a variety of reasons, under their Yemeni sanctions regime. Of particular note, is the designation of the International Bank of Yemen Y.S.C. (IBY) and its “key leaders or officials” Kamal Hussain Al Jebry, Ahmed Thabit Noman Al-Absi, and Abdulkader Ali Bazara as SDGTs, pursuant to section 1(b) of Executive Order 13224, as amended by Executive Order 13886.

This follows the previous designation of the Yemen Kuwait Bank for Trade and Investment Y.S.C for its financial support to Ansarallah on 17 January 2025, also pursuant to Executive Order 13224.

It should be noted that GL 33 was issued on 17 April 2025 in relation to the IBY, which authorises, until 17 May 2025 12:01 am ET, any transactions otherwise prohibited by the GTSR, which are ordinarily incident and necessaryfor winding-down transactions involving the IBY or any entity controlled by it. However,any payment madetothe IBYor its controlled entities must be paid into a blocked account.

Conclusions

In light of the ongoing situation in and around Yemen, members should take appropriate measures to protect themselves against the risks of sanctions breaches and being left without cover.

Cover is not available to Members for any trade or action that breaches applicable sanctions and / or breaches the entry trading warranty. The Club will cease cover for any Member calling at a sanctioned Yemeni port as a result of the imposition of US sanctions against Yemen.

In particular, members considering calling at Yemeni ports should exercise enhanced caution generally. This is especially important in regard to those ports which are reported to be Ansarallah-controlled, as they pose heightened risks to vessels, crew, and cargo.

Members should also ensure they undertake appropriate due diligence on any counterparties, ports, cargoes, vessels, and any other relevant parties as part of their trading to minimise the risk of sanctions breaches. Members should also ensure they keep complete and up-to-date records of this due diligence, and any further investigations.