U.N. says still concerns about Yemen trade despite U.S. allowing Houthi deals

By Michelle Nichols

NEW YORK (Reuters) - The United Nations is still hearing concerns that companies are planning to cancel or suspend business with Yemen despite a U.S. decision to allow all transactions with the Houthi movement "given this move does not resolve underlying uncertainties," U.N. spokesman Stephane Dujarric said on Tuesday.

The United States on Monday approved all transactions involving Yemen's Houthi movement for the next month as Washington reviews a Trump administration designation of the Iran-aligned group as a foreign terrorist organization.

"With millions of civilians at risk of starvation, Yemen cannot afford even a temporary disruption in commercial activity and it is not yet clear that the new license will prevent those kinds of disruptions," Dujarric said. "We continue to call for a reversal of the designation on humanitarian grounds."

Former U.S. Secretary of State Mike Pompeo blacklisted the Houthis last week - a day before President Joe Biden took office on Wednesday - despite warnings from the United Nations and aid groups that it would push Yemen into a large-scale famine.

The designation freezes any U.S.-related assets of the Houthis, bans Americans from doing business with them and makes it a crime to provide support or resources to the movement.

U.N. officials and aid groups have said the designation will scare off commercial trade in Yemen, which relies almost solely on imports, creating a gap the humanitarian operation cannot fill regardless of U.S. humanitarian exemptions.

The United Nations describes Yemen as the world's biggest humanitarian crisis, with 80% of its people in need.

"Already, about 50,000 people are essentially starving to death in what is essentially a small famine. Another 5 million are just one step behind them," U.N. aid chief Mark Lowcock told the Security Council earlier this month.

A Saudi Arabia-led military coalition intervened in Yemen in 2015, backing government forces fighting the Houthis in a war widely seen as a proxy conflict between U.S. ally Saudi Arabia and Iran. U.N. officials are trying to revive peace talks to end the war as Yemen's suffering is also worsened by an economic collapse and the COVID-19 pandemic.

(Reporting by Michelle Nichols; Editing by Giles Elgood)