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The Easy Way to Reset Saudi Ties: Sanction the Houthis Again

President Joe Biden delivers remarks on the October jobs report, Friday, November 5, 2021, in the State Dining Room of the White House. (Official White House Photo by Cameron Smith)
President Joe Biden delivers remarks on the October jobs report, Friday, November 5, 2021, in the State Dining Room of the White House. (Official White House Photo by Cameron Smith) This official White House photograph is being made available only for publication by news organizations and/or for personal use printing by the subject(s) of the photograph. The photograph may not be manipulated in any way and may not be used in commercial or political materials, advertisements, emails, products, promotions that in any way suggests approval or endorsement of the President, the First Family, or the White House.

President Biden’s travel to Saudi Arabia last month yielded little improvement in the relationship between the Biden administration and the Saudi government under Crown Prince Muhammed Bin Salman. Distrust lingers. Yet, the Biden administration could take a unilateral step that would not only help mend the rift between the US and Saudi Arabia, but correct a foreign policy mistake: redesignate the Yemeni Houthi organization, also known as Ansar Allah, for terrorism sanctions.

Admittedly, U.S. policy is not the only thing that needs correcting. The Saudis have their own sins for which they must atone. The country’s human rights record is still not where it should be. And Riyadh has yet to fully account for the 2018 murder of Jamal Khashoggi. But if Washington is serious about a reset with Saudi Arabia, motivated by a need to get more oil on the market or a desire to counter China’s regional ambitions, taking action against the Houthis is the best bet.

The Saudis would cheer the move. The Houthis continue to wage a brutal war for control of Yemen to their south. Currently, Ansar Allah is using a fragile ceasefire to rearm, refit, and refinance (thanks to Iran) in preparation for another round of fighting. When ceasefire inevitably ends, the group is all but guaranteed to resume attacking Saudi Arabia, as the Yemen has spilled over into the rest of the region. Acknowledging these facts with two straightforward bureaucratic maneuvers would set US policy on the right course and immediately help rebuild ties with the energy-rich desert kingdom.

Recent history is worth briefly revisiting. In January 2021, the Trump administration designated Ansar Allah as a Foreign Terrorist Organization (FTO) and a Specially Designated Global Terrorist (SDGT). Then-Secretary of State Mike Pompeo stated that if Ansar Allah “did not behave like a terrorist organization, we would not designate it as an FTO and SDGT.” The evidence included the support that Ansar Allah receives from Iran’s Islamic Revolutionary Guard Corps, which is itself a US-designated a terrorist organization.

The Trump administration’s decision was almost immediately reversed by the Biden administration in February 2021, citing risks that sanctions posed to humanitarian aid in war-torn Yemen. In so doing, the White House ignored the activities of the Houthis themselves. After a series of high-profile attacks since then, including attacks on Saudi oil installations, pressure has been building on the White House to reimpose the FTO designation and SDGT sanctions. Ansar Allah has repeatedly threatened international shipping, and it has targeted civil aviation facilities, including those frequently utilized by US citizens.  Just last month, British authorities seized missiles bound for Yemen from Iran, thwarting a high profile attack.

The SaudisEmirates, and some Yemeni human rights activists are imploring the Biden administration to relist the Houthis. This is unsurprising; they are the ones in the crosshairs of Houthi violence. They correctly note that Houthi terrorism has steadily worsened since the administration’s misstep of last year. Since the ill-fated delisting last year, the group has engaged in more violence, not less.

Acting against the Houthis is not simply smart diplomacy. Slapping the FTO and SDGT designations would strengthen Washington’s ability to target Ansar Allah, both financially and politically. An FTO designation institutes a visa ban, requires U.S. banks to block the assets of the designated organization, and establishes an extraterritorial application of criminal prohibitions on U.S. persons who provide the FTO with material support.  The SDGT authority enables the Treasury Department to target terrorist financiers who access the U.S. financial system. In 2019, the Trump administration expanded the authority to include secondary sanctions on individuals and businesses that allow an SDGT to use their services.

Currently, the administration’s decision to keep the Houthis off the terrorist list is purely political. The White House has repeatedly used the term “terrorist” to describe Houthi attacks.  The Biden Administration is shackled by its own policy, fearful of backtracking on a hasty and domestically motivated decision. Indeed, the initial move was designed to placate progressives in Congress who have an axe to grind with Riyadh, and who cheered unraveling any policy implemented by Donald Trump.

Looking back, the administration’s claim that de-listing the Houthis would enable aid to flow more easily now also rings hollow. The White House now concedes that the Houthis are among the actors blocking that aid. There are ample mechanisms to manage Yemen’s humanitarian assistance flows. This includes the Department of Treasury’s licensing authority for transactions that may run afoul of sanctions, and the State Department’s mechanism to exempt humanitarian transactions.

In visiting Saudi Arabia last month, the president vowed to seek a reset. It’s time to follow through. The White House has an opportunity to correct an errant policy and make good on the promise to tackle Iran’s malign regional activities. Should the Biden Administration fail to do so, Congress should issue legislation mandating sanctions on Ansar Allah, while still ensuring the flow of humanitarian aid in Yemen.

Dr. Jonathan Schanzer is senior vice president for research at FDD, where he oversees the work of the organization’s experts and scholars. He is also on the leadership team of FDD’s Center on Economic and Financial Power, a project on the use of financial and economic power as a tool of statecraft.

Matthew Zweig is a Senior Fellow at FDD. From July 2019 to December 2020, Matt served as the Senior Sanctions Advisor in the Office of the Special Representative for Syria Engagement.

Mr. Schanzer is a former terrorism finance analyst at the U.S. Treasury. Mr. Zweig has served in senior positions at the State Department and the House Foreign Affairs Committee. They are, respectively, senior vice president for research and a senior fellow at the Foundation for Defense of Democracies.