US report: Washington's policy aimed at easing pressure on the Houthis undermines recent US sanctions on smuggling networks linked to Iranians

The US Treasury Department announced new sanctions targeting entities affiliated with groups it described as terrorist proxies for Iran in Yemen and Lebanon and involved in smuggling Iranian goods.

The sanctioned entities, according to a Treasury Department press release on August 15, include several companies, individuals, and vessels involved in transporting goods, including oil and liquefied petroleum gas, to Yemen and the United Arab Emirates on behalf of Iran’s Islamic Revolutionary Guard Corps.

The sanctioned entities belong to the network of Saeed al-Jamal—an Iran-based financier of the Houthi rebels in Yemen who was sanctioned by the United States in 2021—which helps finance the Yemeni terrorist group’s attacks on international commercial shipping in the Red Sea.

Al-Jamal’s activities also generated revenue for Iran’s Revolutionary Guard Corps’ Quds Force, which trains and equips Iranian proxy groups across the region.

The department also imposed sanctions on a Hong Kong-based shipping company, Kai Hing Long Global Energy Ltd., and four tankers, the MV Fengshun, MV Victoria, MV Lady Liberty, and MV Parvati, that transported Iranian liquefied petroleum gas.

The Fengshun and Victoria are operated by the Hezbollah-controlled Talaqi Group—a group of front companies run by Hezbollah official Mohammad Qasim al-Bazzal—and have been used to ship “tens of millions” of dollars worth of LPG from Iran to China. Both the Talaqi Group and al-Bazzal have been sanctioned by the United States.

But experts believe that this measure, despite its importance in imposing sanctions, is undermined by a policy that aims at the same time to ease pressure on the Houthis by leaving the group off the list of foreign terrorist organizations and maintaining broad exemptions from its classification under sanctions, as Richard Goldberg, senior advisor to the Foundation for Defense of Democracies, pointed out in a report published by the American research institution FDD.

“Since Treasury designated Saeed al-Jamal in 2021, the government has continued to target his network of shipping companies, vessels, and brokers who profit from their support for the Houthis on behalf of the Iranian regime,” said Max Mezlish, a senior research analyst at the Foundation for Defense of Democracies’ Center for Economic and Financial Power.

Yet with each additional classification, Max wonders whether we are simply playing a cat-and-mouse game that has been going on for years, or whether the United States is truly getting closer to cutting off the camel network for good. “Americans deserve to know which of these questions is true,” he said.

Penalties on camels

The United States imposed sanctions on al-Jamal and 11 members of his network on June 10, 2021, noting that his network “generates tens of millions of dollars in revenue from the sale of commodities, such as Iranian petroleum, a significant portion of which is then routed through a complex network of intermediaries and exchange companies in multiple countries to the Houthis in Yemen.”

Since his appointment, the Treasury Department has sanctioned entities in the Camel Network on numerous occasions, including more than a half-dozen times this year alone.

Many of the sanctioned camel ships fly convenient flags, registering in jurisdictions with lax anti-money laundering and counter-terrorism financing regimes, such as Panama, the Marshall Islands, Palau and others.

This tactic poses a threat to international maritime security and makes it difficult to enforce sanctions against malign Iranian influence. The United States has previously asked these countries to strip sanctioned Iranian ships of their flags.