The United States Treasury sanctioned 32 individuals and entities on September 12 in its largest action targeting Iran-backed Houthis, disrupting networks that fund and arm the Yemen-based terrorist group’s Red Sea attacks.
The move represents a significant escalation in economic warfare against the Houthis, who have killed civilians and threatened global shipping lanes while coordinating with Iran to destabilize the Middle East.
Under Secretary of the Treasury for Terrorism and Financial Intelligence John K. Hurley said in a press release “The Houthis continue to threaten U.S. personnel and assets in the Red Sea, attack our allies in the region, and undermine international maritime security in coordination with the Iranian regime,”, adding “We will continue applying maximum pressure against those who threaten the security of the United States and the region.”
Treasury’s Office of Foreign Assets Control targeted smuggling operations spanning Yemen, China, the United Arab Emirates, and the Marshall Islands.
The sanctioned networks procure ballistic missile components, cruise missiles, and drone parts used against U.S. forces and commercial vessels.
The Houthis generate massive revenue through the corrupt seizure of private companies and state assets. They appointed Salih Dubaysh as “Judicial Custodian” to confiscate property under false pretenses of treason against the terrorist group.
Dubaysh replaced Saleh Mesfer Alshaer, sanctioned in 2021 for overseeing violent expropriation exceeding $100 million. Alshaer distributed stolen assets to family members, including his brother Abdullah Mesfer Al-Shaer, who now chairs two seized companies generating military financing.
The Houthis control General Holding Corporation for Real Estate and Investment, valued at $500 million. The company launders money through real estate, exchange, and communications investments.
Khaled Muhammad Khalil, head of the Houthi Security and Intelligence Service’s Economic Department, manages acquisitions and money laundering through the holding company, according to the U.S. Department of the Treasury. He allegedly extorts merchants and money changers who refuse to launder funds.
Petroleum smuggling provides another revenue stream. Mohammad Abdulsalam, sanctioned in March, allegedly oversees hundreds of businesses importing Iranian oil worth one billion dollars collectively.
Zaid Ali Yahya Al Sharafi and Saddam Ahmad Mohammad Al Faqih operate within Abdulsalam’s network. Al Sharafi manages petroleum companies owned by Houthi leaders while personally owning firms that smuggle oil into Yemen.
Maritime front companies help evade scrutiny. Tyba Ship Management DMCC, owned by previously sanctioned Muhammad Al-Sunaydar, operates four oil tankers that discharged cargo at Houthi-controlled Ras Isa port in May.
Chinese suppliers provide critical weapons components. Hubei Chica Industrial Co., Ltd. supplied chemical precursors for ballistic missiles and explosives, falsifying shipping documents to circumvent export controls.
Shenzhen Shengnan Trading Co., Ltd shipped dual-use electronics for drone manufacturing, mislabeling contents destined for Houthi territory. Shanxi Shutong Import and Export Trade Co., Ltd., under the ownership of Ying Li, shipped hundreds of thousands of tons of chemicals for missile motors.
Front companies facilitate procurement operations. China-based Yiwu Wan Shun Trading Company Limited has coordinated large-scale UAV component shipments since 2021, working with U.S.-designated procurement operative Ibrahim Al-Nashiri.
Yemen’s Irtiqa for Development and Qualification Technical Institute procures dual-use components and manufactures UAVs. The institute has improved Houthi one-way attack drone capabilities over the past two years.
Shipping facilitators transport military components globally. Guangzhou Yakai International Freight Forwarding Co., Ltd. arranges dual-use goods shipments from China to Houthi front companies in Yemen and neighboring countries.
The sanctions freeze all U.S.-based assets of designated persons and entities. Americans cannot conduct transactions with them, and foreign financial institutions risk secondary sanctions for significant dealings.
The Treasury emphasized that sanctions aim to change behavior, not punish. The department outlined procedures for removal from sanctions lists for those demonstrating positive behavioral changes.
These latest actions follow previous sanctions from June, July, October, and December 2024, as well as March, April, June, and July 2025, targeting Houthi leaders, smugglers, and suppliers. The State Department designated the Houthis as a Foreign Terrorist Organization in March.