U.S. Treasury targets vessels aiding Houthi oil shipments

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Michael Faulkender Deputy Secretary of the Treasury | Wikipedia

U.S. Treasury targets vessels aiding Houthi oil shipments

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The U.S. Treasury's Office of Foreign Assets Control (OFAC) has announced action against three vessels and their owners for allegedly supporting the Houthi group in Yemen. This group, officially recognized as Ansarallah, is considered a terrorist organization by the U.S. and part of Iran's proxy network. The Treasury Department underlines the Houthis' use of offensive capabilities like missiles and unmanned aerial vehicles, which have targeted shipping in the Red Sea, endangering global commerce and navigation.

Deputy Secretary of the Treasury, Michael Faulkender, emphasized, "Today’s action underscores our commitment to disrupt the Houthis’ efforts to fund their dangerous and destabilizing attacks in the region," committing to leverage government tools to impede Houthi activities.

The Treasury's actions align with Executive Order 13224, designed to counter terrorism, and build on past OFAC measures targeting the Houthis' revenue mechanisms and supply lines. The State Department had previously designated the Houthis as a Specially Designated Global Terrorist (SDGT) and a Foreign Terrorist Organization (FTO). OFAC warns that entities supplying material support to the Houthis face significant sanctions and safety threats.

The Houthis control three ports along the Red Sea - Hudaydah, Ras Isa, and Al-Salif. These are crucial entry points for refined petroleum products, from which they derive significant revenue. The Treasury claims the Houthis sell these products at inflated prices in Yemen's black market, enabling them to procure military materials and worsen the economic situation for Yemeni civilians.

OFAC has amended licenses concerning transactions with the Houthis. General License (GL) 25A pertaining to petroleum products has expired, and GL 26A now excludes such products from import through Houthi-managed ports. Involved in violations were identified as Marshall Islands-registered Zaas Shipping & Trading Co, Mauritius-registered Bagsak Shipping Inc, and Marshall Islands-registered Great Success Shipping Co. They've been designated for their support in delivering petroleum products to Houthi-controlled ports post-April 4, 2025.

The vessels, notably Zaas Shipping's Tulip BZ, Bagsak Shipping's Maisan, and Great Success's White Whale, delivered products beyond the expiration of GL 25A. Notably, these vessels had prior roles in transporting Iranian oil in violation of past sanctions.

These designations lead to the blocking of properties and interests tied to these entities in the U.S., with mandatory reporting to OFAC. Transactions involving these entities by U.S. persons or within the U.S. are prohibited unless explicitly authorized. Violations may result in civil or criminal penalties and secondary sanctions risks.

The Department of Commerce oversees export controls that might further restrict dealings with these designated persons under U.S. regulations. OFAC's sanctions are flexible, aiming not just to punish but foster behavioral change, allowing designated entities to apply for removal from lists.

More detailed information on today's designations can be accessed via the OFAC platform.

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