A smuggling network that generates tens of millions of dollars in revenue for Iran-backed Houthi rebels in Yemen and an Iranian external paramilitary force was sanctioned earlier this month by the U.S. Treasury Department.
Sa’id al-Jamal, an Iran-based Houthi financier, leads a network of front companies and vessels that smuggle Iranian fuel, petroleum products and other commodities to customers across the Middle East, Africa and Asia, according to the Treasury. A significant portion of the revenue generated from the scheme is moved through a network of international intermediaries and exchange houses to the Houthis in Yemen, the Treasury said.
“This network’s financial support enables the Houthis’ deplorable attacks threatening civilian and critical infrastructure in Yemen and Saudi Arabia,” said Andrea Gacki, director of the Treasury’s Office of Foreign Assets Control (OFAC).
The U.S. has sanctioned key Houthi leaders amid the group’s offensive on Marib Province, which is contributing to the crisis in the country, one the United Nations has called one of the world’s worst. In February, the U.S. had revoked a foreign terrorist organization (FTO) designation on the Houthis, citing humanitarian concerns.
A “cohort of businessmen and shipping experts” support al-Jamal’s network, the Treasury said, enabling the illicit sale of Iranian goods abroad and the repatriation of the profits to the Houthis and to Iran’s Islamic Revolutionary Guard Corps-Qods Force (IRGC-QF). The IRGC-QF was sanctioned in 2007 for its support to terror groups and designated as an FTO in April 2019.
Key business partner: Abdi Nasir Ali Mahamud, a Turkey-based Houthi affiliate, is a key business partner of al-Jamal and acts as a financial intermediary, coordinating the smuggling of petrochemicals for the network, according to the Treasury.
Mahamud manages a United Arab Emirates-based Adoon Group, which controls the two firms sanctioned by the U.S., Adoon General Trading FZE and Adoon General Trading L.L.C., according to the parent company’s website. Mahamud used Adoon General Trading FZE to transfer millions of dollars on behalf of al-Jamal, the Treasury said, and he and the company were cited in a 2018 U.N. panel of experts report as part of the “principal individuals” in a criminal network responsible for charcoal trafficking from Somalia.
The Adoon Group also has locations in China and Somalia, the website said. The address of Adoon General Trading Gida Sanayi Ve Ticaret Anonim Sirketi, a Turkish entity sanctioned due to its ties to Mahamud, is shared by two other companies also involved in wholesale food trade, records seen by Kharon show.
Sanctioned exchange house: Sa’id al-Jamal has also used Swaid and Sons, a Yemen-based exchange house associated with the Houthis, to send millions of dollars to IRGC-QF officials deployed in Yemen, the Treasury said, imposing sanctions on the firm.
In a statement, the exchange house said it was “surprised” by the sanctions decision, denying the facts presented in the U.S. designation. “There is no reason to be included in that list,” the statement said, adding that Swaid and Sons reserves its legal rights to challenge the sanctions.
Swaid and Sons says it is an agent for exchanges throughout the Middle East, according to its website. Swaid and Sons also utilizes agents in the U.K. and Jordan owned by the Sahloul family, which was identified in media reporting as providing financial facilitation for the Syrian government led by Bashar al-Assad.
At al-Jamal’s direction, two other individuals sanctioned in the action facilitated transactions worth millions of dollars to the exchange house, according to the Treasury. One, Greece-based Syrian national Abdul Jalil Mallah, facilitated the shipment of Iranian crude to Syria and worked with al-Jamal to send millions of dollars worth of Iranian crude to Hizballah, the Treasury said.
Mallah is also a minority shareholder of the Turkish firm, Oryx Denizcilik Limited Sirketi. The majority owner of Oryx Denizcilik owns an entity that had a vessel which spilled oil off the coast of Israel in February, records show. The Israeli government claimed the spill was an act of Iranian environmental sabotage, according to a media report.
The other, Turkey-based Syrian national Talib ‘Ali Husayn Al-Ahmad al-Rawi, worked with al-Jamal to transfer millions of dollars from Qatirji Group purchases of Iranian petroleum products to Swaid and Sons in Yemen, according to the Treasury. The Qatirji Group was sanctioned in 2018 for facilitating oil deals between the Syrian government and the Islamic State of Iraq and al-Sham; Syria has deepened the relationship in the time since, Kharon reported in 2019.
Others in al-Jamal’s network sanctioned by the Treasury included Jami’ ‘Ali Muhammad, a Somali businessman who assisted al-Jamal’s efforts to procure vessels, facilitate shipments of Iranian fuel and transfer funds for the benefit of the Houthis.
Al-Jamal used a vessel, the Gabon-flagged vessel Triple Success, to smuggle Iranian petroleum products out of Iran, the Treasury said, identifying the oil products tanker as blocked property.
Failures of the former operator: The Triple Success was transferred to an undisclosed owner and operator in the days since it was designated by the U.S. as blocked property, maritime records show. The vessel’s former operator, UAE-based Aurum Ship Management FZC, has owned or operated multiple vessels that fell under investigation, were named in U.S. sanctions advisories, subjected to detentions or involved in major incidents, according to a review of its fleet by Kharon.
The Triple Success, along with a handful of other vessels still operated by Aurum, have switched off their location (AIS) transponders while in the Gulf, Kharon found. Manipulating the AIS is an indicator of potential sanctions evasion, U.S. advisories say.
The Rising Phoenix and the TSS Glory, also managed by Aurum, both had their AIS data switched off while traveling from the Gulf to the western coast of India early this year.
Analysts of the Counterterrorism/Middle East team contributed to this report.