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UN report: “Houthis laundered $1.8B in state revenues in 2019”

Houthi supporters marching in Sanaa, Yemen (Egypt Independent)

Egypt Independent

Independent UN sanctions monitors accused Yemen’s government, in a report seen by Reuters on Tuesday, of “money-laundering and corruption”. It stated that the actions “adversely affected access to adequate food supplies” and added, “the Houthi group collected at least $1.8 Billion in state revenue in 2019 to help fund its war effort”.

UN monitors said, “Saudi Arabia deposited $2 Billion at the Central Bank of Yemen, in January 2018, under a development and reconstruction program. The sum was intended to fund purchases of basic commodities, (rice, sugar, milk and flour), to consolidate food security and stabilize domestic prices”.

UN investigators found that Yemen’s Central Bank “broke its foreign exchange rules, manipulated the foreign exchange market and laundered a substantial part of the Saudi deposit in a sophisticated money-laundering scheme, which saw traders receive a $423 Million windfall”.

“The $423 Million is public money, which was illegally transferred to private corporations. Documents provided by the Central Bank of Yemen fail to explain why they adopted such a destructive strategy”, according to the UN report.

The monitors said they view it as “an act of money-laundering and corruption perpetrated by government institutions. In this case, the Central Bank of Yemen and the Government of Yemen, in collusion with well-placed businesses and political personalities, were able to the benefit a select group of privileged traders and businessmen.”

Yemen’s Central Bank said on Wednesday, “the operations it carried out were transparent and compliant with international banking and trade requirements”.

“The Central Bank determined the exchange rate based on the Central Bank of Yemen law and sought to adopt a cautious policy in moving the exchange rate at a time when the market saw sharp fluctuations leading to price instability for basic goods”, the bank said in a statement.

“The Central Bank believes the team of experts … may have relied on allegations and misleading information from some anti-Yemen parties which target the Central Bank of Yemen and its presence and activities in Aden”, the statement added.

The UN report said, “in areas controlled by the Houthis the group was collecting taxes and other state revenue needed to pay government salaries and provide basic services to citizens”. It estimates “the Houthis diverted at least $1.8 Billion in 2019, a large portion of which was used to fund their war effort”.

The Houthis did not immediately respond to a request for comment on the accusations in the UN report.

The UN monitors reported “there is a growing body of evidence that shows that individuals or entities within the Islamic Republic of Iran are engaged in sending weapons and weapon components to the Houthis” in violation of a UN arms embargo. Iran denies such support for the Houthis.

A Saudi-led military coalition intervened in Yemen in 2015, backing government forces fighting the Houthis in a war widely seen as a proxy conflict between US ally Saudi Arabia and Iran. UN officials are trying to revive peace talks to end the war as Yemen’s suffering is worsened by an economic collapse and the COVID-19 pandemic.

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