YEMEN - Increased DFA intervention in the private sector in DFA-controlled areas OVERVIEW

To complete its full control over the governance and regulation The DFA-led restructuring of the private sector via the takeover of the Sana’a-based Chamber of the private sector, the DFA granted the President of the Superior Political Council the of Commerce and Industry (SCCI) aims to influence ownership in key sectors and promote authority to amend tax laws without parliamentary approval. [...] Unless the IRG can improve the competitiveness of the Gulf of Aden and Arabian Sea ports, As the majority of imports are redirected to Al Hodeidah, the IRG has lost a source of essential such shifts in the import of construction materials are likely to be further consolidated in public revenue. [...] The pre-conflict structural concentration of public and private institutions in Sana’a, as well as the fact that the majority of the population resides in DFA-controlled areas (and Yemeni CBY-Sana’a’s tightening of regulations on the money exchange sector migrants in Saudi Arabia are also from DFA governorates), gives the DFA control over most of the foreign exchange supply. [...] The extent Implications for the peace process of DFA encroachment into the private sector and imposition of price controls, however, has left the private sector with no choice but to respond to avoid the collapse of the business The DFA’s domination of the most influential segment of the private sector, as manifested environment in DFA-controlled areas.  in the composition of the SCCI board, hinde. [...] Transfer of tax amendment power from parliament to the Implications for the private sector Executive Authority The above initiatives have the potential to influence business profitability, organisational Since the beginning of the conflict, the DFA has enforced substantial taxes on the business structure, and capacity to engage with companies beyond DFA-controlled areas.