US policy in Yemen paves the way for humanitarian NGOs to finance terrorists

Yemen’s Iranian-backed Houthi militia continues to target ships along the vital Red Sea shipping route, threatening lives and global supply chains. Three sailors were killed in the attack earlier this month.

The United States has stepped up efforts to counter this threat, including conducting airstrikes and sanctioning the group as a Specially Designated Global Terrorist Organization.

At the same time, the U.S. government, which has provided more than $5.5 billion in humanitarian aid to Yemen since 2015, continues to fund humanitarian nongovernmental organizations (NGOs) and UN agencies in Yemen, which are largely exempt from sanctions. This contradictory policy allows terrorist groups to divert aid and profit from these funds, further exacerbating an already grave security crisis.

In 2021, the Trump administration designated the Houthis, officially known as Ansarullah, a foreign terrorist organization, but this decision was rescinded shortly after Joe Biden took office as president. But in January, following an increase in Houthi attacks in the Red Sea, the State Department labeled Mr. Ansarullah a “Specially Designated Global Terrorist” and imposed accompanying sanctions.

However, guidelines for circumventing these sanctions published by the U.S. Treasury Department’s Office of Foreign Assets Control contain significant loopholes that undermine the purpose of the sanctions. The document states that NGOs may make payments to Houthi officials and institutions, as well as to institutions controlled by Houthi authorities, as long as they are payments for taxes, administrative fees, permits, public services, and licenses. It is stated that. This is ostensibly done as part of humanitarian aid. With the Houthis controlling Yemen’s ports and other infrastructure and jurisdictions, this means NGOs can openly hand over funds to terrorist groups as long as they are labeled as taxes or fees. .

Additionally, the document allows U.S.-funded NGOs to “coordinate with Ansarala.” [the Houthis] Regarding the transfer or distribution of humanitarian supplies. ” NGOs are also permitted to make payments to institutions and organizations led by Houthi officials. Funding development projects available to government agencies under direct control of the Houthis. and “direct payments (cash incentives) to health workers, teachers, and other staff who may be associated with or formally employed by nominal or actual administrative or governing bodies controlled by Ansarala.” “to pay fees, daily allowance, expenses, etc.”

These broad exemptions effectively render the sanctions regime worthless and embolden the Houthis. They also reflect a long-standing campaign by U.S.-funded NGOs to lower anti-terrorism screening standards and defend involvement with terrorist organizations.

At the center of this is the Norwegian Refugee Council, which cites USAID as a funder of operations in Yemen and criticizes the Trump and Biden administrations for designating the Houthis.

The NRC has a total annual budget of more than $600 million, has received more than $320 million in grants from the U.S. since 2020, and has long lobbied the U.S. government and other donor countries to allow it to work with designated terrorist groups. It’s here. For example, in a 2020 “toolkit” designed to train other NGO workers, the NRC states that “engaging with non-state armed groups, regardless of whether they are non-governmental organizations, ” he claims. [designated terror groups]is a key element in gaining and maintaining safe access to people in need. ”

The NRC has also reached out to the United States in other ways. In 2020, we successfully forced USAID, the U.S. government’s primary agency for distributing foreign aid, to narrow the scope of its counterterrorism reviews, including those of secondary partners.

Another concerning NGO receiving US funding for Yemen is Norwegian People’s Aid, which received $1.1 million from the State Department between August 2023 and September 2024. . In April 2018, NPA settled a civil fraud case with the Department of Justice and USAID. The NGO was accused of providing material support to the Iranian military and Palestinian terrorist organizations, including Hamas.

Similarly, the NRC and its officials insist on direct Hamas involvement in aid distribution in Gaza. The terrorist organization has a history of looting aid supplies for its own purposes, storing weapons in humanitarian facilities, and placing terrorist members in key positions in aid organizations.

Policymakers have pointed to the link between lax policies promoted by NGOs and the potential for aid diversion. At a Senate hearing in February, Sen. Bill Hagerty (R-Tenn.) warned: “Given what Hamas has done with the aid we send to Gaza, we are deeply concerned that the Houthis will also divert their purpose from the aid we are sending.” ”

Governments that want to responsibly provide humanitarian aid to conflict zones must learn lessons from Yemen and Gaza. This includes strict enforcement of laws prohibiting the provision of material support to terrorist organizations, especially when those organizations, like the Houthis, are actively fighting U.S. forces.

Additionally, NGOs seeking to be the ultimate beneficiaries of U.S. taxpayer funds or U.S. aid must be scrutinized to ensure that they are not affiliated with U.S.-designated terrorist organizations. This review should rely on all publicly available information, including publications and statements by potential grant recipients, implementing partners, beneficiaries and their staff.

Only by implementing stricter policies can the United States ensure that taxpayer dollars do not go to fund terrorist groups that threaten the United States and its allies.

Jonah Schiffmiller is the director of research at NGO Monitor, a research institute based in Jerusalem..