Claims shipping companies are paying the Houthis hundreds of millions of dollars to secure safe passage in the Red Sea look overly exaggerated, according to a prominent maritime legal man.
A London-based maritime security expert has expressed doubts about a United Nations report last month, stating that the Yemeni rebels could be earning about $180m per month from illegal fees to grant trouble-free transit off their waters.
A panel of experts appointed by UN secretary general Antonio Guterres said they received information that shipping agencies “coordinate with a company affiliated with a top-ranking Houthi leader” to make such payments.
“… the fees are deposited in various accounts in multiple jurisdictions through the Hawala network and through adjustments involving trade-based money laundering,” the panel added, including the caveat they could not independently confirm any of that information.
Hawala stands for informal money-changer networks in the Middle East.
“I think if anything like this sort of money was being paid by mainstream shipping I would know,” wrote Stephen Askins, co-founder of London law firm Tatham & Co and a recognised expert in dealing with piracy, war and terrorism.
The figure of $180m is probably close to what the shipping industry paid in a whole year during the height of the Somali piracy crisis — which happened legally, with the backing of the insurance industry, Askins argued.
A former Royal Marine who spent 30 years in the maritime security business, Askins said he did not think a shipowner would run the risk of paying any sizeable amounts to “an organisation proscribed by the US and the UK [and] without the prospect of recovery from their insurers”.
He cited practical problems as well.
It might be possible to use the Hawala system to pay small amounts, but nothing of the scale described in the report.
“Cash is heavy and it’s bulky,” Askins wrote.
“I have moved serious amounts of cash to pay Somali and Nigerian pirates — I know odd facts like that $10m in cash in $100 bills weighs around 100 kg.
‘A business like any other’
Doubts about the volume of under-the-table payments to the Houthis, however, do not necessarily mean that no such payments are made at all.
Even before the UN report was released on 11 October, TradeWinds had heard from at least one shipowner that such transfers indeed happen, through UK-based intermediaries.
The owner did not know how many peers use that mechanism but said that one-time payments could range between $100,000 and $150,000.
Another way to ship cargo free of Houthi charges is to use Chinese sub-charterers, who usually do not pay.
“Like everything else in life, transit through the Red Sea has become a business,” the owner said.
