Illicit Houthi Shipment Sanctions

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Jun. 21, 2024
By: Chaney A. Finn

Ten individuals, entities, and vessels, including tanker captains, in multiple jurisdictions that have engaged in the illicit transport of oil and other commodities, including for the network of Houthi financial facilitator Sa’id al-Jamal, have been sanctioned by the Department of the Treasury’s Office of Foreign Assets Control (OFAC). Just as with most all sanctions, these sanctions implicate that all property and interests in property of the designated persons that are in the United States or in the possession or control of U.S. persons are blocked and must be reported to OFAC. Additionally, any entities that are owned, directly or indirectly, individually or in the aggregate, 50 percent or more by one or more blocked persons are also blocked. Unless authorized by a general or specific license issued by OFAC, or exempt, OFAC’s regulations generally prohibit all transactions by U.S. persons or within (or transiting) the United States that involve any property or interests in property of designated or otherwise blocked persons.

These latest sanctions mark the seventh round of sanctions targeting the network of Sa’id al-Jamal since October 2023 pertaining to the illicit transport of oil and other commodities and activities associated in facilitating illicit activities, including hiding the origin of cargo and forging shipping documents, and providing services to sanctioned vessels. The notice specifies the following sanctioned parties:

·      Oman-based Shark International Shipping L.L.C, under the leadership of its managing director John Britto Aruldhas, for their work with the Sa’id al-Jamal network to furnish forged shipping documents for vessels shipping commodities on behalf of the Houthis.

·       India-based Rayyan Shipping (OPC) Private Limited (Rayyan) who served as the manager and technical operator of the sanctioned Guyana-flagged vessel OLYMPICS formerly known as the LADY SOFIA, which continues to carry cargo for the Sa’id al-Jamal network. 

·       Vivek Ashok Pandey for Captaining the OLYMPICS and operating under forged paperwork falsely indicating that the vessel was carrying Malaysian commodities that were loaded at a Malaysian port in late April. Pandey has captained the LADY SOFIA since it onboarded commodities on behalf of the Sa’id al-Jamal network.

·       Sa’id al-Jamal’s Yemen-based nephew ‘Abdallah Najib Ahmad al-Jamal (‘Abdallah al-Jamal), who manages money laundering operations for the Sa’id al-Jamal network.

·       Hong Kong-based Lainey Shipping Limited, the registered owner of the Panama-flagged JANET, and Panama-based Louis Marine Shipholding Enterprises S.A., the registered owner of the Panama-flagged BELLA 1,for their role in carrying sanctioned cargo on behalf of Hizballah-owned and OFAC-designated Concepto Screen SAL Off-Shore to Southeast Asia.

·       Sandeep Singh Choudhary, the master of the vessel LA PEARL, which also operates under the name ELITE. OFAC identified the LA PEARL as property in which Saone Shipping Corporation has an interest on April 25, 2024. Saone Shipping Corporation was concurrently designated pursuant to E.O. 13224, as amended, for having materially assisted, sponsored, or provided financial, material, or technological support for, or goods or services to or in support of, Sepehr Energy Jahan Nama Pars Company (SEJ). 

As a way of background, Yemen’s Houthi rebels have been engaging in drone and missile attacks against commercial shipping and naval vessels within the Red Sea in support of Hamas in its war with Israel in Gaza. The attacks have caused significant supply chain disruptions due to the rerouting of ships around the horn of Africa. Yemen’s Houthi rebel group has targeted container ships transiting the Red Sea via the Suez Canal with drones, missiles and small boats in an attempt to disrupt shipping lanes. As a result, shipping giants Maersk, Hapag-Lloyd and MSC have rerouted ships around Africa's Cape of Good Hope to access Europe from the Indian Ocean, causing significant delays in the delivery of goods due to the extended lead-time. The attacks have been described as having a greater impact on shipping and supply chains than the early pandemic due, causing extended shipping times and consequential rate spikes.

The U.S., along with Australia, Bahrain, Belgium, Canada, Denmark, Germany, Italy, Japan, the Netherlands, New Zealand, Singapore and the U.K. released a joint statement calling the attacks “illegal, unacceptable, and profoundly destabilizing” and are “jeopardizing the movement of critical food, fuel, and humanitarian assistance throughout the world." The statement also issued a warning to the rebel group as 15% of global trade passes through the waterway. The U.S. has previously responded to a carrier's distress calls by shooting down two anti-ship ballistic missiles and later sank three other attacking boats earlier this year. The U.S. has also engaged in more recent military strikes intended to disrupt and degrade the Houthis’ ability to engage in attacks against commercial shipping and naval vessels. The U.S. Department of State designated Ansarallah (commonly known as the Houthis) as a Specially Designated Global Terrorist group, effective February 16, 2024.

Should you have any questions regarding OFAC sanctions, or any other trade-related questions, do not hesitate to contact any attorney at Barnes Richardson and Colburn.