Houthi efforts to implicate the private sector in confronting US sanctions (special report)

The Houthi militia has issued at least three statements in the name of the Federation of Chambers of Commerce over the past four days. These statements were published by the Saba News Agency and its media outlets, but were not published on the official websites of the Federation of Chambers of Commerce and the Chamber of Commerce in the capital, Sana'a.

Houthi statements issued on behalf of the Yemeni private sector, rejecting the inclusion of Houthi businessman Ali al-Hadi on the sanctions list for his role in financing the Houthi militia with weapons and money laundering, avoided mentioning another Houthi businessman, Abdulwali al-Jaberi, and limited themselves to the need to remove al-Hadi, the intruder on the Chamber of Commerce and the president he imposed on it by force.

In a statement issued on March 7 by the Houthi-run Saba News Agency, in the name of the General Federation of Chambers of Commerce, the militia denied that Ali al-Hadi was one of its financiers. It said he was a businessman in the basic goods and food industries, and demanded his removal from the US sanctions list. At the end of the statement, it stated that designating the Houthis as a terrorist organization means designating the Yemeni people as such, a clear indication of the Houthis' attempt to evade sanctions by expanding their impact. They also sought protection from the private sector in particular, given that the sanctions are designed to target their financial resources, according to US data.

In another statement issued on March 10, the Federation of Yemeni Chambers of Commerce called on the US Treasury Department to "reconsider its recent designations that included the Chairman of the Chamber of Commerce, businessman Ali Mohammed al-Hadi, on the sanctions list, given the repercussions this will have on the humanitarian and economic situation in Yemen."

On March 9, the Houthi-run Saba News Agency reported on a press conference held on behalf of the Yemeni private sector. According to the agency, the Yemeni private sector condemned the US administration's classifications and sanctions against Yemeni businessmen, the latest of which was the imposition of sanctions on the head of the Sana'a Chamber of Commerce and Industry, Ali Mohammed al-Hadi. According to the Houthi agency, the businessmen described the US sanctions as "illegal, inconsistent with reality, and based on false accusations."

Ali al-Hadi is a Houthi businessman who has suddenly emerged. Yemen Youth Net reported his visit to Russia to purchase weapons, the justification cited by the US Treasury for imposing sanctions on him. His sources of power stem from serving as a front for the Houthi naval force, its drones, and its missile capabilities. Over the years, he has established several new companies and forcibly entered into partnerships with Yemeni businessmen. He is accused of forcibly seizing control of Red Sea grain silos and storming the Chamber of Commerce in the capital, Sana'a, the largest Yemeni chamber of commerce, in late May 2022, immediately after a court ruling by the Commercial Court validated the legitimacy of its ousted board of directors, headed by Hassan al-Kabous.

Ali al-Hadi unlawfully monopolized forced labor with the World Food Programme, relying on his influence within the Houthi militia and obtaining billions of dollars from his contracts with UN organizations.

Data on behalf of the Federation of Chambers and the private sector... Why ?

As he has done in previous years and since his inception, the Houthis have sought to employ everything they can in their own battle against those they consider their opponents, both at home and abroad. They are seeking to integrate them into this battle, both by force and by choice, to reduce costs and leverage their capabilities, including those of the private sector, but this time against the United States.

 The Houthis have imposed dozens of different types of taxes on the private sector, extracting them by force. More recently, they have imposed taxes even without legal authority, presenting them as if they were requested by the private sector itself. This is the case of the exorbitant taxes on the clothing, textile, and footwear sectors, which were issued in the name of Ali al-Hadi and the Chamber of Commerce. In other cases, they have imposed new taxes through an agreement between al-Hadi himself and the Houthi militia.

What's new about confronting US sanctions is that they've pushed the private sector to the forefront, as the Houthis are using chambers of commerce as part of their military confrontation. They're also seeking to integrate the private sector into their battle, as if trying to convince the Americans that the entire Yemeni private sector is integrated with them, and that any attempt to dry up the Houthis' financial resources would mean massive destruction of the Yemeni private sector, famine, and total collapse.

Mustafa Nasr, head of the Economic Media Center, commented on the Houthi statement issued on behalf of the Federation of Chambers of Commerce, saying it was a clear attempt to implicate the Yemeni private sector.

Nasr added in a Facebook post that issuing the statement in the name of the Federation of Chambers aims to subject the federation to US sanctions.

 The private sector did not publish the data on its official websites.

 The Federation of Chambers of Commerce, which is run by a member of the Hayel Saeed Group, did not publish any of the statements on its official website, despite the fact that more than a week has passed since the date of the statement's publication in Houthi media. Likewise, the Chamber of Commerce in the capital, despite the Houthis' effective control over it through Ali al-Hadi, did not publish any of the statements that the Houthis claimed the private sector and the Federation of Chambers had published.

In this context, a businessman says, "The private sector understands the meaning, severity, and destructive potential of US sanctions, and does not seek to confront the United States at all."

He added to Yemen Youth Net, preferring to remain anonymous, that the private sector, by refusing to publish data in its name on its official website, "wants procedures and mechanisms to neutralize it, because it is fully aware of the financial system, the complexity and constraints of foreign trade, and the extent to which any sanctions will impact its activities and capabilities."

The source indicated that one of the private sector's objectives is to "constrain the battle between the United States and the emerging Houthi private sector."

The source predicted that the private sector, given its extensive experience in the US-dominated global financial, economic, and trade system, would operate on two tracks: the first, engaging in difficult and fierce negotiations and resistance against the Houthis to neutralize itself, and the second, engaging with the Americans, to avoid sanctions and designations while simultaneously countering any Houthi integration into the battle between the two sides.

Enormous pressure on businessmen

 Dr. Abdul Qader Al-Kharaz, a specialist in the "Where is the Money" campaign, which tracks the movement of donor funds and their relationship with the Houthi militia and its trade, told Yemen Youth Net, "The Houthis are exerting tremendous pressure on major commercial groups, and they have new merchants and businessmen who are also seeking to implicate those major commercial groups and the entire private sector in general."

In Houthi media outlets and on the Sahafatk search engine, Houthi activists published a story holding businessman Hassan al-Kabous, the forcibly removed head of the Sana'a Chamber of Commerce, responsible for Ali al-Hadi's inclusion on the US sanctions list.

The report, which allegedly emerged from leaks, said, "Hassan Al-Kabous played a pivotal role in an external incitement campaign against the current head of the Sana'a Chamber, Ali Al-Hadi. Secret meetings were held in several capitals, including Amman, Cairo, Muscat, and Riyadh, where he met with a number of foreign ambassadors and heads of international organizations, urging them to take a stand against Al-Hadi. What was even more surprising were his controversial statements regarding the Sana'a Chamber of Commerce, in which he asserted that the Houthis forced him to hand it over to Houthi leader Ali Al-Hadi under threat of force."

The alleged role of Al-Kabous in Al-Hadi's takeover of the Chamber of Commerce was also mentioned in the Federation of Chambers of Commerce's alleged statement, and Al-Kabous' dismissal and Al-Hadi's appointment were legal, further indicating a strong, systematic campaign to extort what remained of the capital.

Al-Kabous has not commented on the Houthis' accusations that he is responsible for Ali al-Hadi's designation, nor on the Houthis' demands to seize control of his companies to compensate for what they claim are losses incurred by Ali al-Hadi as a result of US sanctions.

A source close to some Yemeni businessmen told Yemen Youth Net: "The Houthi militia's media outlets' coverage of Al-Kabous indicates that the Houthis are adopting a policy of responding to US sanctions by targeting the private sector."

He added that the Houthis are exploiting their designation as a foreign terrorist organization by the US, and the inclusion of some of their leaders and businessmen on the sanctions list, to liquidate the private sector in Yemen, particularly the leadership of the Federation of Chambers of Commerce and the Chamber of Commerce in the capital Sana'a, before storming them.

In January, the United States designated the Houthi militia a foreign terrorist organization. The designation took effect in early March in response to Houthi naval attacks and its import of weapons from Russia. The United States also pledged to dry up its financial resources through sanctions.

The private sector, through the Federation of Chambers of Commerce, the Yemeni Banks Association, the Capital Secretariat Chamber before its takeover, and through the judiciary, is already engaged in a fierce struggle against the Houthis, accusing them of seeking to destroy and liquidate the non-Houthi Yemeni private sector by all means, including closing and raiding companies, imposing illegal taxes and fees, and assassinating and kidnapping businessmen. The most recent kidnapping was carried out by the Houthis against businessman Maher Al-Sudaei, who has been forcibly disappeared for months.