On May 16, President Barack Obama issued Executive Order (“EO”) 13611 blocking property under U.S. jurisdiction owned by parties who threaten the peace, security, and stability of Yemen. This EO is somewhat different from other orders in that it does not designate specific parties. Instead, it is much broader and authorizes sanctions to be imposed on individuals and entities that disrupt the political transition of Yemen's newly elected president, who is backed by the U.S.

The U.S. is backing the new government led by Abed Rabbo Hadi. However, a number of the ousted dictator Ali Abdullah Saleh's relatives and supporters in positions of military and political power refused to give up their offices until a recent Hadi-issued decree. Hadi was sworn in on February 25 following an uncontested election aimed at ending more than a year of political turmoil. The country is expected to complete a constitution in late 2013 enabling general elections to take place in February 2014.

Obama’s new EO, which threatens any U.S. assets belonging to people the Secretary of State determines to be a threat to Yemen's peace and stability, is an effort to ensure those individuals remain sidelined. Critics of this EO say it is too broad and could unfairly target American companies perceived as not supporting the new U.S.-backed government.

As with most Office of Foreign Assets Control (OFAC) sanctions, the parties designated under this new program will have access to their assets under U.S. jurisdiction blocked, and will be prevented from doing business with U.S. persons.

These new sanctions do not impair the ability of the U.S. government, its employees, grantees, and contractors to carry out official business.

The OFAC has not yet published a sanctions brochure with an overview of Yemen’s sanctions. However, if you would like to review the EO, download this PDF.

Similarly, on June 12, 2012, the U.N. Security Council adopted Resolution 2051 which threatens non-military sanctions against anyone found insufficiently supportive of the new regime in Yemen. The resolution has the backing of five veto-wielding members of the 15-nation council – namely, Britain, the U.S., France, Russia and China. The U.N. resolution describes concerns about terrorist attacks in the country and al-Qaeda’s influence, but it does not limit sanctions strictly to terrorists. The sanctions, instead, could apply to anyone undermining the new regime. The resolution threatens sanctions against those trying to undermine the country’s national unity government. For example, the sanctions demand “the cessation of all actions aimed at undermining the Government of National Unity and the political transition, including continued attacks on oil, gas and electricity infrastructure…”  The sanctions further state that all those responsible for human rights violations and abuses must be held accountable…”

The language of the U.N. resolution is very similar to that of the E.O.

Although no parties have been designated under the U.S. Yemen sanctions program, you should carefully review any transactions you plan to conduct in Yemen and monitor for party designations, which can occur overnight, to avoid any potential violations.