War Economy: A Report on Customs Entry Points in Houthi-Controlled Areas

Executive Summary

This study examines the phenomenon of the internal customs system introduced by the Houthi group in Yemen, as one of the most prominent distortions in the structure of the Yemeni economy during the years of war. With the collapse of state institutions and the fragmentation of the financial and administrative systems following the coup of 21 September 2014, a parallel Houthi revenue-collection system emerged alongside the General Authority for Taxes and Customs. Through this system, the group was able to build a financial apparatus that goes beyond its economic function, acquiring overlapping political, security, and sovereign dimensions. The study shows that this system gradually evolved from limited field checkpoints into an integrated network stretching along the main roads linking Aden, Marib, Taiz, and Sana’a, where additional fees are imposed on goods that had already been cleared at official ports and entry points.

“A parallel Houthi revenue-collection system emerged alongside the General Authority for Taxes and Customs. Through this system, the group was able to build a financial apparatus that goes beyond its economic function, acquiring overlapping political, security, and sovereign dimensions.”

By 2023, this activity had transformed into a parallel internal customs apparatus operating through mechanisms that combine administrative bureaucracy with military force. Estimates indicate that it generates annual revenues of YR 90–120 billion, equivalent to around 6–8% of local revenues in Houthi-controlled areas. It has thus become one of the main pillars financing their authority in Sana’a, outside the framework of the legitimate state and its legal structures, and a tool for political and economic control. It is used to regulate trade movement, monitor the entry of humanitarian aid, and impose patterns of loyalty on traders and economic institutions.

This system represents a clear violation of Customs Law No. 14 of 1990 and its amendments, which limits customs collection to border crossings, international seaports, airports, and free zones. It also violates the principle of the unity of the public treasury as stipulated in the Yemeni Constitution. In addition, it infringes on the principle of freedom of movement and the movement of goods and people across the different parts of the republic, a constitutional right guaranteed to citizens and traders