Tariffs & Non-Tariff Barriers

Import Tariffs
Since 1993, Yemen has been a member of the World Customs Organization (WCO). The Yemeni Customs Authority follows Law 37/1997, which regulates tariffs on imported goods. In 2001, in exchange for participation in the Gulf Cooperation Council (GCC) institutions, Yemen moved toward amending customs levies to levels closer to those adopted by the GCC.

In April 2000, in an effort to facilitate procedures and enhance transparency, the Customs Authority (CA) installed the Automated System for Customs Data (ASYCUDA). ASYCUDA, programmed in compliance with Yemeni legislation and national security. In 2004, CA launched an electronic clearance processing service at 15 entry points.

The Yemeni Customs Authority assesses the value of imports at the Central Bank exchange rate, which is allegedly the same as the market rate. From 1996 to 2005, in an effort to simplify and make transparent the customs procedures, the ROYG steadily reduced tariffs as the Cost of Insurance and Freight (CIF) decreased for all imports. The tariff schedule consists of ad-valorem duties of 5, 10, 15 and 25%. At the 10% or less bracket, duties are levied on 3,134 items, about 51% of the total of 6,237 scheduled items.

Under the positive influence of Yemen’s pursuit of WTO accession, the government contemplates reducing the custom tariffs. In 2004, CA submitted a draft custom tariff law for approval by the Cabinet and the Parliament. The draft law proposed significant tariff reduction on several high-tariff goods, decreasing from 15 percent and 25 percent to 5 percent or less. The tariff reduction proposal was implemented in 2005.

Trade Barriers
The ROYG demonstrated constructive movement to remove trade barriers by eliminating import licensing in 1996 on most products except for controlled materials and products such as alcohol and explosives, and cut tariff rates to four bands between 5% and 25% ad-valorum. On the other hand, Yemen imposes tariffs on raw materials that are not available locally. It instituted an excise tax on industrial inputs and a production tax on local manufacturers in a declared effort to create a level playing field between imports and local industrial products. The Yemeni government also streamlined customs procedures somewhat, but businesses still consider them to be the primary trade barrier.

An annual income tax remains on commercial, industrial and service establishments as well as transport, shipping, cargo and packing service businesses. The tax is based on the company’s profits and the owner's profits, and depends on which sector the company operates in, whether industry, trade, finance or real estate.

Import Requirements and Documentation
Import documentation and requirements are available from the Ministry of Industry and Trade and/or the relevant ministry governing a company's activities. A health certificate must be obtained to export animal and fisheries products. The government eliminated import licensing in 1996, except on controlled products and materials such as alcohol and explosives.

The following documents are required:

-Commercial Invoice Three copies of the ordinary commercial invoice should accompany shipments. The invoice should contain a full and accurate description of the goods, the marks and numbers, value of the merchandise, country of origin and net and gross weight.

-Certificate of Origin A separate certificate of origin is required for shipments to Yemen. The general form sold by commercial stationers is acceptable.

-Bill of Lading There are no regulations specifying the form or number of bills of lading required for any particular shipment. A bill of lading customarily shows the name of the shipper, the name and address of the consignee, port of destination, description of the goods, the listing of the freight and other charges, the number of bills of lading in the full set, and the date and signature of the carrier’s official acknowledging receipt on board of the goods for shipment.

-Health Certificate A health certificate is required for shipments to Yemen of animal stock, food, and agricultural products.

-Free Sale certificate Imports of pharmaceuticals require a free sale certificate stating that the commodities in question are in free circulation in the country of export. In a dispute between the CA and the shipment’s owner, it shall be referred to two experts, one appointed by the authority and the other by the goods owner, within 8 days. If both experts agree, their opinion shall be final. If not, an arbitration committee, consisting of a permanent representative of the Minister of Finance or two CA and Yemen Standardization, YSMO, and Metrology Organization representatives, shall make a final and binding decision, and the losing party shall incur the arbitration expenses.

Temporary Entry
Temporary entry of equipment and furniture for projects is allowed provided that they are re-exported upon completion of the project; otherwise, they will be taxed. Goods coming through the Free Zones into local markets are considered imports and, therefore will be subject to all applicable taxes and measures.

Commercial samples are recorded in the visitor’s passport and deleted once they are taken out of the country. A significant number of samples imported for exhibitions and expos require a cash guarantee or deposit covering the customs and tax duties. If the items are sold or disposed, the deposit will be returned with a deduction.