U.S. Sanctions Tankers and Arms Suppliers Used by Houthis

The U.S. Department of the Treasury’s Office of Foreign Assets Control (OFAC) is against invoking sanctions in its effort to further tighten the restraints against the Houthi militants. The actions announced on October 2 are going after arms shipments, a supplier network ranging from China to Iran as well as tankers used to transport oil to pay for the arms.

According to U.S. officials, the procurement operatives and suppliers located in Iran and China have enabled the Houthis to acquire dual-use materials and components needed to manufacture, maintain, and deploy its arsenal of missiles and unmanned aerial vehicles (UAVs). The tankers are being linked with illicit Houthi and Iranian commercial shipments. 

“The Houthis continue to leverage their networks of companies and procurement operatives to sustain their reckless attacks on civilian vessels, their unarmed crews, and civilian populations,” said Acting Under Secretary of the Treasury for Terrorism and Financial Intelligence Bradley T. Smith. “Treasury remains committed to using our full suite of tools to disrupt the supply chain networks that enable the Houthis’ destabilizing activities.”

The U.S. is reporting that the Houthis are using a network of international shipping and logistics companies to transport military-grade components from third-country. The sanctions target a China-based logistics and international shipping firm, Shenzhen Boyu Imports and Exports Co., that is reported to have facilitated multiple shipments of components for use in weapons production by the Houthi militants. 

The action also targets companies based in China that supply the components and other military-grade items. OFAC says the Houthis have procured tens of thousands of dollars worth of dual-use components from PRC-based Shenzhen Jinghon Electronics, which Houthi forces used to advance their domestic missile and UAV production efforts. Shenzhen Rion Technology Co. is also listed for having sourced critical components for use in missiles and UAV development and manufacturing, including components for use in the manufacturing of missile guidance systems. Shenzhen Rion was previously designated for having provided financial, material, technological, or other support to Iran’s Ministry of Defense and Armed Forces Logistics.

The effort also targets a company in the Marshall Islands that is listed as the owner and operator of two tankers. One vessel, the Gabon-flagged Izumo (150,000 dwt) was built in 2001 and is transporting petroleum products on behalf of Iran and the Houthis. The second crude oil tanker, the Cook Islands-flagged Frunze (105,000 dwt) was built in 2003 and has also been linked to the transport of Iranian oil Both vessels have also been associated with Russian oil shipments. According to databases, both ships are managed by a company in China.

These are the latest in a series of actions by the Biden administration to choke off the funding and supply of weapons and funds to the Houthis. Analysts recently said the U.S. sanction efforts against tankers are proving an effective tool with many of the vessels forced to go idle after being designated.