Yemen: UN observers withdraw money-laundering allegations

Independent UN sanctions observers have withdrawn their allegations that the Yemeni government is guilty of money laundering and corruption, which had "adversely affected access to adequate food supplies" in a country on the brink of famine, Reuters has reported.

In their annual report to the UN Security Council in January, the experts accused the Central Bank of Yemen of breaking its foreign exchange rules, manipulating the foreign exchange market, and "laundering a substantial part of the Saudi deposit in a sophisticated money-laundering scheme" that saw traders receive a $423 million windfall.

However, Reuters cited on Monday a document dated 26 March in which the observers provided an update to a Security Council committee. They apparently said that a preliminary review showed no evidence of corruption or money laundering and that the indications show that "food prices were stabilised in 2019". The document has also recommended the council to disregard those sections of the report pending a final assessment.

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The deposit made by Saudi Arabia in 2018 was intended to fund credit to buy commodities to strengthen food security and stabilise domestic prices, explained Reuters.

In response to the January report, the Central Bank of Yemen said that the operations it had carried out were transparent and compliant with international banking and trade requirements. In February, the Yemeni government announced that it has appointed multinational professional services company Ernst & Young to audit its central bank accounts.