Yemeni government demands prepayment of duties on Houthi-controlled imports
New rules require full settlement of taxes before goods clear Houthi ports, a move critics say strains cash-poor businesses while the Aden government tightens its grip on foreign exchange flows.
By Layla Richardson ·
Yemen’s internationally recognized government has issued a directive requiring importers to settle all customs duties, taxes, and mandated revenues in advance for goods destined for Houthi-controlled ports. The National Committee for Regulating and Financing Imports issued the decision, which was circulated by the Aden Chamber of Commerce and Industry earlier this week.
The new regulations link the processing of foreign exchange transactions and international transfers to proof that all applicable charges have been paid in full. While the government states the goal is to streamline revenue collection, critics argue the upfront payment requirement adds financial pressure on businesses operating in a capital-scarce economy. Importers in the Houthi-held north must now secure funds before goods can be cleared, a hurdle many describe as difficult to clear with limited liquidity.
Wafiq Saleh, an economic journalist in Yemen, discussed the impact of the measures on the Yemen Youth TV Channel last week. Saleh noted that the limited quantity of imports currently reaching the besieged city of Taiz is insufficient to meet residents' basic needs. He described the country as slipping into a war-driven economy, where black market prices for essential goods have inflated. In a social media post, Saleh characterized the new rules as an economic tool for the Central Bank and the National Committee for Import Financing.
Saleh stated that traders who attempt to bypass the new mechanism will face difficulties covering letters of credit for goods imported from abroad. He emphasized that the Central Bank of Yemen in Aden remains the only authorized entity for covering these letters of credit and communicating with regional correspondent banks. No commercial or banking entity can access the international financial system outside of these official monetary authorities, a consolidation that enforces compliance with the new tax requirements.
The financial maneuvering by Aden authorities comes against a backdrop of parallel financial structures established by the Houthis since their capture of Sanaa in 2014. The Mokha Center for Strategic Studies documented these structures, which include taxes, customs duties, and zakat. A report published by the center in July estimated that the Houthis' parallel economy generates approximately $2.5 billion annually in direct and indirect financial resources. This total includes around $800 million from taxes and customs, $600 million from additional fees, $300 million in cash and in-kind contributions to the war effort, and $100 million from mobilization events.
Businesses in Houthi-controlled areas bear a heavy share of the financial strain. The Mokha Center estimates these businesses face an additional $700 million in indirect costs, layered on top of direct taxes and fees. The new government rules aim to address inefficiencies by ensuring revenue is collected before goods clear for entry. The financial measures coincide with ongoing diplomatic efforts, including reports that the Houthis have demanded $51 billion from Saudi Arabia as compensation for airstrikes and a blockade.
Saudi Arabia has faced repeated attacks from Iran and the Houthis since the United States and Israel launched strikes against Iran on February 28. In response, Riyadh has strengthened regional defense partnerships. The kingdom signed the Mecca Joint Defense Agreement with Turkey and Pakistan in August and signed a separate defense cooperation agreement with Syria on Wednesday.
