Yemen’s internationally recognized National Committee for Regulating and Financing Imports is tightening financial control over goods entering Houthi-controlled ports, the Aden Chamber of Commerce and Industry reported Thursday.
The decision requires customs duties, taxes, and other government revenues to be paid in advance on imports destined for Houthi-controlled ports, it said.
The new measures, which were circulated earlier this week, make the processing of foreign-exchange transactions and related international transfers conditional on proof that the applicable charges have been paid in full.
Critics have warned that the requirements could create an additional financial burden for businesses importing supplies into the poverty-stricken country.
Last week, Yemeni economic journalist Wafiq Saleh told Yemen Youth TV Channel the small quantity of imports allowed to enter the besieged city of Taiz was not meeting residents’ basic needs, and that the country was falling into a war-driven economy, with inflated black-market prices for basic goods.
The Yemeni government’s new measures were “an important economic tool in the hands of the Central Bank and the National Committee for Import Financing in the face of traders and importers,” he wrote on social media.
“Traders and importers who attempt to circumvent this mechanism will find it difficult to cover letters of credit for goods imported from abroad,” Saleh wrote. “The Central Bank of Yemen in Aden is the authorized entity for covering letters of credit and communicating with regional correspondent banks and intermediary banks. No commercial or banking entity will be able to access the international financial system outside of the official monetary authorities.”
Houthis collect millions through taxes, customs duties and other levies
Since the Houthis captured Sanaa in 2014, the group has collected revenues through taxes, customs duties, zakat (religious alms), and other levies, the independent Yemeni research and policy institution Mokha Center for Strategic Studies reported.
The Houthis’ “parallel economy” accounted for about $2.5 billion annually in direct and indirect financial resources and costs, it reported in July.
Houthis demand $51 billion from Saudi Arabia to end hostilities
About $800 million came from taxes and customs, $600m. from additional fees and levies, $300m. from cash and in-kind contributions to the war effort, and $100m. from mobilization events, the report said. A further $700m. represented indirect costs borne by businesses, it added.
On Thursday, The Wall Street Journal reported that the Houthis had demanded $51b. from Saudi Arabia as compensation for years of Saudi airstrikes and a prolonged blockade, alongside formal recognition of the group as Yemen’s rulers, in exchange for ending hostilities.
Saudi Arabia has faced repeated attacks by Iran and the Iran-backed Houthis since the US and Israel launched strikes against Iran on February 28.
In response, Riyadh has sought to strengthen its regional defense partnerships. In August, signed the Mecca Joint Defense Agreement with Turkey and Pakistan. On Wednesday, it signed a separate defense cooperation agreement with Syria.