U.N. monitors backtrack on Yemen money-laundering accusations - document

DUBAI (Reuters) - Independent U.N. sanctions monitors have withdrawn accusations against Yemen’s government of money-laundering and corruption that they said “adversely affected” access to food supplies in a country on the brink of famine, a document showed.

The experts had said in an annual report to the U.N. Security Council that Yemen’s central bank broke its foreign exchange rules, manipulated the foreign exchange market and “laundered a substantial part of a $2 billion Saudi deposit in a sophisticated money-laundering scheme”.

In a March 26 document seen by Reuters, and whose authenticity was confirmed by a diplomat, the experts provided an update to a Security Council committee saying a preliminary review showed no evidence of corruption or money laundering and that indications show “food prices were stabilised in 2019”.

It said those sections of the report should be disregarded pending a final assessment.

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

Yemen’s central bank has said the operations it carried out were transparent and compliant with international banking and trade requirements.

In February, Yemen’s government said it appointed Ernst & Young to audit its central bank accounts.

Yemen’s six-year war and ensuing economic collapse have caused what the United Nations says is the world’s largest humanitarian crisis, with 80% of the population reliant on aid.

The conflict has divided the country with the Iran-aligned Houthi movement holding most of northern Yemen and the internationally recognised government, backed by a Saudi-led military coalition, based in the south.

The monitors’ January report also accused the Houthi movement of collecting at least $1.8 billion in state revenue in 2019 to help fund its war effort.

Reporting by Mohammed Ghobari in Aden, Aziz El Yaakoubi in Dubai and Jonathan Landay in Washington; Writing by Ghaida Ghantous; Editing by Alistair Bell