Exclusive: U.N.

report accuses
Yemen government of money-
laundering, Houthis of taking
state revenue
NEW YORK (Reuters) - Independent U.N. sanctions monitors
accused Yemen’s government, in a report seen by Reuters on
Tuesday, of money-laundering and corruption “that adversely
affected access to adequate food supplies” and said the Houthi
group collected at least $1.8 billion in state revenue in 2019 to
help fund its war effort.

The annual report to the U.N. Security Council on the

implementation of international sanctions on Yemen coincides
with U.N. officials saying that the country is on the verge of a
large famine with millions of civilians at risk.

The monitors said Saudi Arabia deposited $2 billion with the

Central Bank of Yemen in January 2018 under a development
and reconstruction program. The money was intended to fund
credit to buy commodities - such as rice, sugar, milk and flour -
to strengthen food security and stabilize domestic prices.

The U.N. investigation 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” that saw traders
receive a $423 million windfall.

“The $423 million is public money, which has been 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 U.N. report.
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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, to the benefit of 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

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.

“The Central Bank believes the team of experts ... may have
relied on allegations and misleading information from some
anti-Yemen parties that target the Central Bank of Yemen and
its presence and activities in Aden,” the statement said, adding
that the team of experts had been invited to Aden to examine
documents.
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The U.N. report said that 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 U.N. report.

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.

Thze U.N. 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
weapons components to the Houthis” in violation of a U.N. arms
embargo. Iran denies such support for the Houthis.
Reporting by Michelle Nichols in New York; Additional reporting by Aziz El
Yaakoubi in Dubai, Mohammed Ghobari in Aden and Nazanine Moshiri in Nairobi;
editing by Grant McCool, William Maclean
Our Standards:  The Thomson Reuters Trust Principles.