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The biggest loser in the US-Houthi fight

The biggest loser in the US-Houthi fight

New sanctions and bombings will likely slow aid distribution in the Middle East’s poorest country: Yemen

Reporting | Middle East

In early 2021, Secretary of State Antony Blinken removed the Houthis from the State Department’s lists of foreign terror groups, reversing a last-minute Trump administration move.

“This decision is a recognition of the dire humanitarian situation in Yemen,” Blinken said at the time. “We have listened to warnings from the United Nations, humanitarian groups, and bipartisan members of Congress, among others, that the designations could have a devastating impact on Yemenis’ access to basic commodities like food and fuel.”

Three years later, the situation in Yemen remains precarious, but the Biden administration has changed its calculus. Amid a Houthi campaign of attacks on ships headed toward Israel, Blinken announced that the U.S. will redesignate the organization as a Specially Designated Global Terrorist group (SDGT) next month. (The Houthis say their attacks would stop if Israel ends its assault on Gaza.)

This designation, though less stringent than the one imposed by the Trump administration, will likely complicate the distribution of aid in Yemen, according to Ashleigh Subramanian-Montgomery, the associate director of the Charity and Security Network. In practice, U.S. and UK airstrikes have already forced some aid groups to cut back operations in the country.

RS spoke with Subramanian-Montgomery to get her take on how the designation and the broader escalation will affect average Yemenis, as well as how political calculations influence national security decision making. The following conversation has been edited for length and clarity.

RS: How are humanitarian groups responding to this decision?

Subramanian-Montgomery: Likely many humanitarian groups and aid groups are responding how they always do when either an SDGT designation or other designations happen, which is to review all of the authorizations that Office of Foreign Assets Control has put out. OFAC put out five general licenses and an FAQ. Organizations are looking into those and understanding what's allowable and what's not allowable then trying to act accordingly. Likely all humanitarian organizations will be forced to have conversations with their banks because any type of designation makes banks very, very hesitant and scared to continue transactions, even when things are authorized and allowed. There are certain places in the world where banks are more hesitant to transact to, and Yemen is definitely one of those places.

RS: Do you have a sense of how the designation might affect the ability of NGOs to distribute aid?

Subramanian-Montgomery: Where we have a little bit of the advantage is that it's not going into place until Feb. 16. So I think there can be some mobilizing around that that's kind of unique. You don't usually get any heads up that that designation will happen.

There are potentials for humanitarian aid organizations to be able to sort of figure out things a little bit ahead of time and find any workarounds that they need to do there. But the big challenge they'll face is the de-risking by banks, which will then make them not be able to do their aid delivery in the places that are going to need it the most, or potentially at all.

RS: Can you tell me more about the history of the relationship between NGOs and their banking partners in the Middle East?

Subramanian-Montgomery: Certain countries are always flagged. Banks will sometimes reject transactions just because of a certain name, like Syria, for instance, or Palestine, even before Oct. 7. Some organizations, if they have that in their name, or they're saying the transaction is going to this country, the transaction will be stopped or delayed. Delayed is the best case scenario, but that's not a good scenario if you need humanitarian aid immediately. Sometimes they'll be stopped altogether, or a bank will drop the relationship completely. Unfortunately, the relationships between humanitarian aid organizations in the region and banks can be really difficult. It's a fraught, challenging relationship. And it comes to be hard for aid organizations to know where in the pipeline the delay or the stopping of the transaction happened. Was it where the funds originated? Was it a bank along the way? That can be really, really challenging.

RS: Can you tell me more about the distinction between the SDGT designation and the FTO designation? My understanding is that they were both put in place by Trump, both reversed by Biden, and now just the SDGT put in place by Biden.

Subramanian-Montgomery: That's exactly right. I will say that it's very, very positive that the FTO designation was not reinstated, and it was just the SDGT. FTO designations are the prohibition on material support to terrorists. When an FTO designation goes into effect, most types of engagement with an FTO are then prohibited. And anybody running afoul of this, any individual organization running afoul of this can face really hefty fines and can face really dire criminal penalties, including up to 10 years of jail time. So it's pretty severe, and they cause a big chilling impact and effect on humanitarian aid. Since you can't really engage with anyone that's designated as an FTO, they also prevent you from then being able to go and negotiate with the Houthis to get humanitarian aid through. So that designation is particularly challenging, and also, as you can imagine, prevents any type of peacebuilding.

SDGT designations can be authorized either by the Department of Treasury or of State, which makes it both a counterterrorism designation, since State can issue can authorize this designation and those CT designations fall under State's purview, and because it has the financial and asset-freezing part of it that’s under Treasury's purview. Basically, it means that all property and interests in property in the U.S. or even that later can come within the U.S. are blocked.

RS: We've already seen some impact from this escalation on the ability of aid groups to do their jobs on the ground. Some organizations have said that the bombings from the U.S. and the UK have prevented them from continuing operations normally. What effect would a renewal of hostilities have on the country's humanitarian sector?

Subramanian-Montgomery: A renewal of hostilities would be completely devastating given how dire the humanitarian situation already is in Yemen. It's almost hard to imagine that the situation could be exacerbated further given how bad it is and that it's one of the world's absolute worst humanitarian crises. It would block basic access to infrastructure, impact where and how aid could be delivered, how aid could get into the country, who aid could reach. All of these things will be impacted, and unfortunately, the Houthis are not going to be who suffer most. It's going to be the people of Yemen who are going to suffer the most with any kind of hostilities starting up again and everything that's going to follow on from that with the SDGT designation and whatever else it is to follow.

RS: What's the administration's justification for this decision? Do you see this as a politicization of the terrorist designation system?

Subramanian-Montgomery: Absolutely. Look, when the Biden administration removed the Houthi designation, both the FTO and SDGT designations in Feb. 2021, Blinken said it was "a recognition of the dire humanitarian situation in Yemen." As I talked about before, that dire situation still exists today. If the priority for lifting it then in February 2021 was recognizing how bad the humanitarian situation is, and we know that it hasn't really gotten better to date, then how can you say that we're going to reinstate one of the designations that was lifted? It just feels really, really hypocritical. The Biden administration is making choices on political whims rather than realities and needs on the ground, which is unfortunate.

But it's the way these designations work. An example I always give is the Taliban. They've been designated as an SDGT since 2001, and the reason that they continue to be designated as an SDGT rather than as an FTO is because the administration would basically, if they made them an FTO, designate themselves out of being able to engage the Taliban. So the Doha talks in 2016 and 2019 couldn't really have happened because nobody could have engaged with the Taliban as they were an FTO. It's just an example that shows how political these designations are, and that, administration to administration, regardless of who's in power in the U.S., the decisions are always very political. They're very tactical and strategic. I don't mean that in a good way. They're making these very calculated decisions on terrorism designations based on a number of factors that they think will benefit their own self interest.

Yemeni fill water in the street amid the country's water crisis. (HUSAM ALQOLIAA/ Shutterstock)

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