U.S. Department of State 
Yemen 1996 Country Commercial Guide 
Office of the Coordinator 
 
 
 
                        COUNTRY COMMERCIAL GUIDE 
                                  YEMEN 
                            FISCAL YEAR 1996 
                                     
 
 
This Country Commercial Guide (CCG) presents a comprehensive look 
at Yemen's commercial environment through economic, political and market 
analyses.   
 
The CCGs were established by recommendation of the Trade 
Promotion Coordinating Committee (TPCC), a multi-agency task 
force, to consolidate various reporting documents prepared for 
the U.S. business community.  Country Commercial Guides are 
prepared annualy at U.S. Embassies through the combined efforts 
of several U.S. governement agencies.  
 
 
                         TABLE OF CONTENTS 
 
I.   EXECUTIVE SUMMARY 
 
II.  ECONOMIC TRENDS AND OUTLOOK 
     - MAJOR TRENDS AND OUTLOOK 
     - PRINCIPAL GROWTH SECTORS 
     - BALANCE OF PAYMENTS SITUATION 
     - INFRASTRUCTURE SITUATION 
 
III. POLITICAL ENVIRONMENT 
     - NATURE OF POLITICAL RELATIONSHIP WITH THE UNITED 
       STATES 
     - MAJOR POLITICAL ISSUES AFFECTING THE BUSINESS 
       CLIMATE 
     - BRIEF SYNOPSIS OF THE POLITICAL SYSTEM 
 
IV.  MARKETING U.S. PRODUCTS AND SERVICES 
     - DISTRIBUTION AND SALES CHANNELS 
     - USE OF AGENTS AND DISTRIBUTORS 
     - FRANCHISING 
     - DIRECT MARKETING 
     - JOINT VENTURES/LICENSING 
     - STEPS TO ESTABLISHING AN OFFICE 
     - SELLING FACTORS/TECHNIQUES 
     - ADVERTISING AND TRADE PROMOTION 
     - PRICING PRODUCTS 
     - SALES SERVICE/CUSTOMER SUPPORT 
     - SELLING TO THE GOVERNMENT 
     - PROTECTING PRODUCTS FROM IPR INFRINGEMENT 
     - NEED FOR A LOCAL ATTORNEY 
 
V.   LEADING SECTORS FOR U.S. EXPORTS AND INVESTMENT 
     - BEST PROSPECTS FOR NON-AGRICULTURAL GOODS AND 
       SERVICES 
     - BEST PROSPECTS FOR AGRICULTURAL GOODS AND SERVICES 
     - SIGNIFICANT INVESTMENT OPPORTUNITIES 
 
VI.  TRADE REGULATIONS AND STANDARDS 
     - TRADE BARRIERS 
     - CUSTOMS VALUATION 
     - IMPORT LICENSES 
     - EXPORT CONTROLS 
     - IMPORT/EXPORT DOCUMENTATION 
     - TEMPORARY ENTRY 
     - LABELING, MARKING REQUIREMENTS 
     - PROHIBITED IMPORTS 
     - STANDARDS 
     - FREE TRADE ZONES/WAREHOUSES 
     - SPECIAL IMPORT PROVISIONS 
 
VII. INVESTMENT CLIMATE: 
     A 1 - OPENNESS TO FOREIGN INVESTMENT 
     A 2 - CONVERSION AND TRANSFER POLICIES 
     A 3 - EXPROPRIATION AND COMPENSATION 
     A 4 - DISPUTE SETTLEMENT 
     A 5 - PERFORMANCE REQUIREMENTS/INCENTIVES 
     A 6 - RIGHT TO PRIVATE OWNERSHIP AND ESTABLISHMENT 
     A 7 - PROTECTION OF PROPERTY RIGHTS 
     A 8 - REGULATORY SYSTEM 
     A 9 - EFFICIENT CAPITAL MARKETS AND PORTFOLIO 
           INVESTMENT 
     A10 - POLITICAL VIOLENCE 
 
     B. - BILATERAL INVESTMENT AGREEMENTS 
     C. - OPIC AND OTHER INVESTMENT INSURANCE PROGRAMS 
     D. - LABOR 
     E. - FOREIGN TRADE ZONES/FREE PORTS 
     F. - CAPITAL OUTFLOW POLICY 
 
VIII. TRADE AND PROJECT FINANCING 
      - BRIEF DESCRIPTION OF BANKING SYSTEM 
      - FOREIGN EXCHANGE CONTROLS AFFECTING TRADING 
      - GENERAL FINANCING AVAILABILITY 
      - HOW TO FINANCE EXPORTS/METHODS OF PAYMENT 
      - PROJECT FINANCING AVAILABLE 
      - LIST OF BANKS WITH CORRESPONDENT U.S. BANKING 
        ARRANGEMENTS 
 
IX.  BUSINESS TRAVEL 
     - BUSINESS CUSTOMS 
     - TRAVEL ADVISORY AND VISAS 
     - BUSINESS INFRASTRUCTURE 
 
X.   APPENDICES 
     A.  COUNTRY DATA 
     B.  DOMESTIC ECONOMY  
     C.  TRADE 
     D.  INVESTMENT STATISTICS 
     E.  U.S. AND YEMEN CONTACTS 
         - U.S. EMBASSY TRADE PERSONNEL 
         - WASHINGTON-BASED USG COUNTRY CONTACTS 
         - COUNTRY TRADE ASSOCIATIONS 
         - YEMEN GOVERNMENT AGENCIES 
         - COUNTRY COMMERCIAL BANKS 
         - MULTILATERAL DEVELOPMENT BANK OFFICE 
F.  MARKET RESEARCH 
G.  LIST OF COMMERCIAL LAWS 
 
 
 
                   CHAPTER I.  EXECUTIVE SUMMARY 
 
YEMEN IS OPEN FOR BUSINESS.  CONDITIONS IN YEMEN ARE 
CHANGING RAPIDLY, MOSTLY FOR THE BETTER.  A POPULOUS 
COUNTRY STRATEGICALLY LOCATED AT THE SOUTHERN TIP OF 
THE ARABIAN PENINSULA, YEMEN IS PURSUING THE 
TRANSITION TO DEMOCRACY AND A FREE MARKET ECONOMY. 
THE POLITICAL AND SECURITY PROBLEMS WHICH LED TO THE 
1994 CIVIL WAR HAVE LESSENED AND THE YEMENI GOVERNMENT 
IS COMMITTED TO IMPROVING THE BUSINESS CLIMATE.  A 
SERIES OF ECONOMIC REFORMS ANNOUNCED IN LATE MARCH 
1995 SHOULD HAVE A POSITIVE IMPACT IN THE MEDIUM TO 
LONG TERM.  ADDITIONAL REFORM MEASURES ARE EXPECTED. 
HOWEVER, YEMEN REMAINS A CHALLENGING MARKET WITH REAL 
RISKS.  WHILE SPONSORS AND AGENTS ARE NOT LEGALLY 
REQUIRED, IT IS RECOMMENDED THAT NEW-TO-MARKET U.S. 
COMPANIES WORK WITH A RELIABLE AND EXPERIENCED YEMENI 
PARTNER. 
 
BOTH THE LONG-TERM AND THE SHORT-TERM OUTLOOKS FOR 
YEMEN ARE UNCERTAIN.  ASSUMING THE GOVERNMENT IS ABLE 
TO MAINTAIN PROGRESS ON ECONOMIC REFORMS AND TO 
ADDRESS SUCH PROBLEMS AS RAPID POPULATION GROWTH AND 
INEFFICIENT USE OF WATER, THE PROGNOSIS IS POSITIVE. 
GIVEN THE UNRELIABLE NATURE OF MOST AVAILABLE DATA AND 
THE UNPREDICTABLE IMPACT OF RECENT REFORMS, THIS CCG 
DOES NOT CONTAIN NUMERICAL ESTIMATES FOR FUTURE 
ECONOMIC INDICATORS. 
 
MAJOR ROAD BLOCKS TO DOING BUSINESS INCLUDE RAMPANT 
CORRUPTION AND RED TAPE, IMPORT RESTRICTIONS, A WEAK 
LEGAL SYSTEM, POOR SHIPPING LINKS, A POORLY- 
FUNCTIONING FINANCIAL SYSTEM, MULTIPLE EXCHANGE RATES, 
NEAR-HYPER INFLATION, LACK OF FINANCING, AND POOR 
DISPUTE RESOLUTION MECHANISMS. 
 
CONCERNS EXPRESSED BY MEMBERS OF THE BUSINESS 
COMMUNITY INCLUDE THE IMPACT OF THE RECENT REFORMS AND 
THE LIKELIHOOD OF ECONOMIC STABILITY, AS REFLECTED BY 
THE VALUE OF THE YEMENI RIAL (YR) RELATIVE TO THE 
DOLLAR.  BETWEEN JANUARY 1 AND DECEMBER 31, 1994, THE 
MARKET EXCHANGE RATE DEPRECIATED BY 42 PERCENT.  ON 
MARCH 29, 1995 THE OFFICIAL RATE OF THE RIAL WAS 
DEVALUED TO YR 50/USD FROM YR 12/USD.  AS OF JULY 1995 
THE PARALLEL MARKET RATE IS ABOUT YR 150/USD. 
 
TOP GOVERNMENT REFORM PRIORITIES INCLUDE CUTTING 
EXPENDITURES (TO REDUCE INFLATION), PRIVATIZING STATE- 
OWNED ENTERPRISES AND REDUCING RED TAPE AND CORRUPTION.  
THE GOVERNMENT IS CONSULTING WITH THE IMF AND WORLD BANK ON  
TECHNICAL MEANS TO ACHIEVE ITS ECONOMIC GOALS.  RECENT PROGRESS IN 
IMPROVING RELATIONS WITH SAUDI ARABIA HAS LESSENED TENSION IN 
YEMEN. 
 
OTHER POSITIVE CHANGES INCLUDE IMPLEMENTATION OF A NEW 
LABOR LAW, REDUCTION IN SUBSIDIES, AND REFORM OF 
CURRENCY EXCHANGE REGULATIONS, INTEREST RATES AND 
CUSTOMS PROCEDURES.  FUTURE PRICE INCREASES AND RIAL 
DEVALUATIONS ARE LIKELY. 
 
AMERICAN PRODUCTS ARE VERY WELL THOUGHT OF IN YEMEN 
AND HAVE BEEN HELPED BY THE RELATIVE APPRECIATION OF 
THE YEN AND EUROPEAN CURRENCIES AGAINST THE DOLLAR. 
HOWEVER, THE DEPRECIATION OF THE RIAL AND THE LACK OF 
DIRECT SHIPPING FROM THE U.S. ARE BARRIERS TO AMERICAN 
PRODUCTS.  IN TERMS OF QUALITY LOCALLY PRODUCED 
PRODUCTS ARE NOT COMPETITIVE WITH U.S. GOODS. 
AMERICAN PRODUCTS ARE ESPECIALLY COMPETITIVE IN 
AGRICULTURAL, FISHING, IRRIGATION AND OILFIELD 
EQUIPMENT, HEAVY MACHINERY, FOOD PACKAGING AND PACKING 
EQUIPMENT, COMPUTERS AND TELECOMMUNICATION EQUIPMENT. 
IN THE SERVICE SECTOR THE MOST PROMISING PROSPECTS ARE 
HEALTH AND TOURISM. 
 
THE AMBASSADOR AND DEPUTY CHIEF OF MISSION ARE ALWAYS 
HAPPY TO MEET WITH REPRESENTATIVES OF AMERICAN 
COMPANIES. THE EMBASSY RECOMMENDS THAT THOSE 
INTERESTED IN DOING BUSINESS CONTACT THE EMBASSY IN 
SANAA FOR THE MOST RECENT INFORMATION.  THE EMBASSY IS 
STAFFED BY TWO STATE DEPARTMENT ECONOMIC/COMMERCIAL 
OFFICERS AND A COMMERCIAL SPECIALIST.  THE 
AGRICULTURAL ATTACHE IS RESIDENT IN RIYADH, WITH A 
YEMENI AGRICULTURAL ANALYST IN SANAA.  THERE IS NO 
DEPARTMENT OF COMMERCE PRESENCE IN SANAA.  THE EMBASSY 
APPRECIATES ANY UPDATES OR CORRECTIONS OF THE 
INFORMATION IN THIS EDITION OF THE COUNTRY COMMERCIAL 
GUIDE. 
 
COUNTRY COMMERCIAL GUIDES ARE AVAILABLE ON THE 
NATIONAL TRADE DATA BANK ON CD-ROM OR THROUGH THE 
INTERNET.  PLEASE CONTACT STAT-USA AT 1-800-STAT-USA 
FOR MORE INFORMATION.  TO LOCATE COUNTRY COMMERCIAL 
GUIDES VIA THE INTERNET, PLEASE USE THE FOLLOWING 
WORLD WIDE WEB ADDRESS: WWW.STAT-USA.GOV.  CCGS CAN 
ALSO BE ORDERED IN HARD COPY OR ON DISKETTE FROM THE 
NATIONAL TECHNICAL INFORMATION SERVICE (NTIS) AT 1- 
800-553-NTIS. 
 
 
 
             CHAPTER II.  ECONOMIC TRENDS AND OUTLOOK 
 
MAJOR TRENDS AND OUTLOOK:  YEMEN'S ECONOMY IS 
UNDERGOING A PERIOD OF REFORM AND UNCERTAINTY.  THE 
GOVERNMENT IS MAKING A DETERMINED EFFORT TO STEM 
INFLATION, CONTROL DEPRECIATION OF THE RIAL, CUT 
GOVERNMENT SPENDING AND PRIVATIZE STATE-OWNED 
ENTERPRISES.  HOWEVER, FOR THE NEAR TERM YEMEN WILL 
REMAIN A CHALLENGING MARKET AND FINANCING WILL BE 
DIFFICULT TO COME BY.  OIL PRODUCTION, WHICH HAS BEEN 
STEADY AT 340,000 B/D, MAY INCREASE SLIGHTLY IF AT 
ALL.  NEGOTIATIONS ARE TAKING PLACE FOR A 5 BILLION 
DOLLAR GAS EXPORT PROJECT, WHICH WOULD BE A MAJOR 
BOOST TO THE ECONOMY.  IMPORTS, EXPORTS, POPULATION 
AND INFLATION SHOULD ALL INCREASE IN COMING YEARS. 
WHILE GDP WILL PROBABLY INCREASE, THE RAPID GROWTH IN 
POPULATION WILL PROBABLY REDUCE GDP PER CAPITA.  THE 
RIAL MAY CONTINUE TO DEPRECIATE, BUT NOT AS RAPIDLY AS 
IN THE RECENT PAST.  PROGRESS ON REDUCING GOVERNMENT 
INTERVENTION IN THE ECONOMY SHOULD CONTINUE. 
 
PRINCIPAL GROWTH SECTORS:  ACCORDING TO YEMEN'S 1993 
"STATISTICAL YEARBOOK" (THE MOST RECENT DATA 
AVAILABLE), HOTELS AND RESTAURANTS SHOWED THE FASTEST 
GROWTH (25 PERCENT IN CONSTANT TERMS).  HOWEVER, THE 
SECTOR ACCOUNTS FOR ONLY ONE PERCENT OF GDP.  APPARENT 
OIL INDUSTRY FIGURES WERE DAMPENED WHEN DOLLAR SALES 
OF PETROLEUM WERE CONVERTED TO RIALS AT THE OFFICIAL 
RATE.  AGRICULTURE AND FISHING, THE SECOND LARGEST 
SECTOR AFTER OIL, GREW 2 PERCENT IN REAL TERMS WHILE 
MANUFACTURING GREW ABOUT 3 PERCENT.  IT IS EXPECTED 
THAT TOURISM AND HEALTH SERVICES WILL BE THE PRINCIPAL 
GROWTH SECTORS, WITH OPPORTUNITIES IN AGRICULTURE, 
FISHING, AND MANUFACTURING OF CONSUMER GOODS.  YEMEN'S 
MAJOR IMPORTS HAVE BEEN CARS AND TRUCKS, TEXTILES AND 
CLOTHES, AND PHARMACEUTICALS. 
 
THE 1995 BUDGET ALLOCATES SOME MONEY FOR INVESTMENT, 
PRIMARILY IN ROADBUILDING.  YEMEN NEEDS 
INFRASTRUCTURE, MEDICAL AND EDUCATION SERVICES, AND 
AGRICULTURAL AND FISHING EQUIPMENT, BUT FINANCING IS A 
CONSTRAINT.  THE GOVERNMENT IS BEGINNING PRIVATIZATION 
OF A WIDE RANGE OF STATE ENTERPRISES BUT LOGISTICS OF 
PRIVATIZATION ARE STILL BEING DEVELOPED.  IT IS OUR 
UNDERSTANDING THAT FOREIGN INVESTORS WILL BE WELCOME. 
 
- BALANCE OF PAYMENTS SITUATION:  ACCORDING TO THE 
1993 BALANCE OF PAYMENTS (BOP) DATA FROM THE CENTRAL 
BANK OF YEMEN (CBY), THE 1993 BOP DEFICIT WAS USD 0.12 
BILLION (AT AN OFFICIAL EXCHANGE RATE OF YR 12/USD). 
THIS WAS A SIGNIFICANT IMPROVEMENT OVER THE 1992 
DEFICIT OF USD 0.39 BILLION.  HOWEVER, THE FINANCIAL 
DATA ARE NOT COMPLETELY RELIABLE. 
 
- INFRASTRUCTURE SITUATION:  THERE ARE ACCEPTABLE 
HOTELS IN SANAA, ADEN AND TAIZ.  MAJOR COMMERCIAL 
CENTERS ARE ACCESSIBLE BY ROAD OR AIR. THERE ARE 
EXCELLENT ROADS CONNECTING YEMEN'S MAJOR CITIES 
(SANAA-HODEIDAH, AND HAJJAH-SANAA-TAIZ-ADEN).  ROADS 
IN THE REST OF YEMEN ARE INADEQUATE.  THE TELEPHONE 
SYSTEM IS GOOD, BUT ACQUIRING A PHONE LINE CAN BE SLOW 
AND MOBILE PHONES HAVE BEEN INOPERABLE SINCE EARLY 
1994.  SECURITY HAS BEEN A PROBLEM, BOTH IN RURAL 
TRIBAL AREAS AND IN SANAA AND ADEN, BUT IS NOW BETTER. 
SECURITY CONCERNS SHOULD NOT AFFECT BUSINESS TRAVEL TO 
THE MAJOR CITIES. 
 
 
 
             CHAPTER III.  POLITICAL ENVIRONMENT 
 
NATURE OF POLITICAL RELATIONSHIP WITH THE UNITED 
STATES:  THE YEMENI GOVERNMENT APPRECIATED THE UNITED 
STATES' ROLE, WHICH WAS PRO-UNITY, IN THE 1994 CIVIL 
WAR.  HOWEVER, BILATERAL POLITICAL DIFFERENCES REMAIN 
REGARDING YEMEN'S POSITION DURING THE 1990 GULF WAR, 
ITS CONTINUED TIES TO IRAQ AND OTHER "PARIAH" STATES, 
AND CERTAIN OTHER ACTIONS. 
 
MAJOR POLITICAL ISSUES AFFECTING THE BUSINESS 
CLIMATE:  CORRUPTION'S IMPACT FILTERS THROUGH ALL 
ASPECTS OF DOING BUSINESS IN YEMEN, DISTORTING 
JUDICIAL AND ADMINISTRATIVE PROCEDURES, MONETARY 
POLICY, SECURITY, AND PROGRESS TOWARD DEMOCRATIZATION, 
A FREE MARKET ECONOMY AND HUMAN RIGHTS. 
 
BRIEF SYNOPSIS OF THE POLITICAL SYSTEM:  YEMEN IS A 
BURGEONING DEMOCRACY, HAVING HELD ITS FIRST 
INTERNATIONALLY-OBSERVED MULTI-PARTY PARLIAMENTARY 
ELECTIONS IN APRIL 1993.  THE NEXT PARLIAMENTARY 
ELECTIONS ARE SCHEDULED FOR APRIL 1997.  YEMEN'S 
GOVERNMENT IS DIVIDED INTO THREE BRANCHES: THE 
EXECUTIVE, WITH PRESIDENT AND VICE PRESIDENT; THE 
LEGISLATIVE, WITH A 301 MEMBER-UNICAMERAL PARLIAMENT; 
AND THE JUDICIARY, CONSISTING OF THREE LEVELS OF 
COURTS: MAGISTRATE, APPEAL, AND SUPREME.  THERE ARE 
TWO RULING COALITION PARTIES: THE GENERAL PEOPLE'S 
CONGRESS (GPC) AND THE YEMENI GROUPING FOR REFORM 
(ISLAAH).  THE GPC IS THE PARTY OF PRESIDENT ALI 
ABDALLAH SALIH.  ISLAAH IS A TRIBAL/ISLAMIC PARTY 
UNDER THE LEADERSHIP OF SPEAKER OF PARLIAMENT SHAYKH 
ABDALLAH AL-AHMAR.  BEFORE THE CIVIL WAR THERE WAS A 
THIRD COALITION PARTNER, THE YEMENI SOCIALIST PARTY 
(YSP), WHICH HAD BEEN THE RULING PARTY IN THE FORMER 
PEOPLE'S DEMOCRATIC REPUBLIC OF YEMEN (PDRY) BEFORE 
THE UNIFICATION OF THE PDRY AND THE YEMEN ARAB 
REPUBLIC (YAR) IN MAY 1990.  SINCE THE WAR, HOWEVER, 
THE YSP HAS BEEN INEFFECTIVE. 
 
THE GPC IS AN "UMBRELLA " ORGANIZATION WITH LESS 
EMPHASIS ON IDEOLOGY AND MORE ON FOLLOWING THE LEAD OF 
PRESIDENT SALIH IN GOVERNING THE COUNTRY.  ISLAAH IS 
MORE IDEOLOGICAL, CALLING FOR IMPLEMENTATION OF 
ISLAMIC LEGAL PRINCIPLES.  BOTH PARTIES HAVE FACTIONS, 
YET BOTH ARE HEADED BY VERY POWERFUL LEADERS. 
 
THE COALITION AGREEMENT BETWEEN GPC AND ISLAAH WAS 
SIGNED IN OCTOBER 1994.  THE COALITION PARTNERS HAVE 
NOT ALWAYS SEEN EYE TO EYE AND, IN FACT, NEARLY SPLIT 
UP IN MARCH 1995 OVER A DISPUTE ABOUT THE ECONOMIC 
REFORM PROGRAM.  HOWEVER, IT IS LIKELY THE COALITION 
WILL REMAIN INTACT FOR THE NEAR FUTURE. 
 
 
 
        CHAPTER IV.  MARKETING U.S. PRODUCTS AND SERVICES 
 
DISTRIBUTION AND SALES CHANNELS:  DISTRIBUTION IS 
DIFFICULT IN YEMEN DUE TO HIGH MOUNTAINS AND POOR 
ROADS.  HOWEVER, PRODUCTS FILTER THEIR WAY TO ALL 
CORNERS OF THE COUNTRY. 
 
USE OF AGENTS AND DISTRIBUTORS:  WHILE NOT REQUIRED 
BY LAW, IT IS STRONGLY RECOMMENDED THAT FOREIGN FIRMS 
WORK WITH A RELIABLE AND EXPERIENCED YEMENI PARTNER. 
THE EMBASSY CAN PROVIDE LISTS OF POSSIBLE 
AGENTS/IMPORTERS BY PRODUCT CATEGORY AND SERVICES. 
 
FRANCHISING:  FRANCHISING AND OTHER FORMS OF 
INVESTMENT COME UNDER THE JURISDICTION OF THE 
INVESTMENT CODE (LAW 22 OF 1991.  SEE CHAPTER VII). 
ALTHOUGH THERE ARE FRANCHISES IN YEMEN, MOST U.S. 
COMPANIES SEEM UNCOMFORTABLE WITH THE LEVEL OF QUALITY 
CONTROL AND HAVE NOT RESPONDED TO FRANCHISE OFFERS BY 
YEMENI BUSINESSES.  SOME U.S. COMPANIES HAVE WITHDRAWN 
THEIR NAMES FROM YEMENI OPERATIONS. 
 
DIRECT MARKETING: MAIL AND TELEPHONE DIRECT 
MARKETING HAS NOT BEEN USED IN YEMEN.  UNSOLICITED 
CALLS TO RESIDENCES WOULD NOT BE CULTURALLY 
APPROPRIATE OR WELL RECEIVED. 
 
JOINT VENTURES/LICENSING:  MOST JOINT VENTURES ARE 
MADE UNDER THE JURISDICTION OF THE INVESTMENT CODE. 
UNDER LAW 32 OF 1991, JOINT AND LICENSING VENTURES 
WHICH DO NOT COME UNDER THE INVESTMENT CODE OR OIL 
PRODUCTION SHARING AGREEMENTS (PSAS) ARE UNDER THE 
JURISDICTION OF THE MINISTRY OF SUPPLY AND TRADE.  IN 
ANY SUCH AGREEMENT THE YEMENI PARTNER MUST OWN AT 
LEAST 51 PERCENT OF THE VENTURE. 
 
STEPS TO ESTABLISHING AN OFFICE:  LAW 36 OF 1992 
REGULATES THE ESTABLISHMENT OF FOREIGN COMPANIES IN 
YEMEN.  THE INVESTMENT CODE REGULATES INVESTMENT 
PROJECTS UNDER THE GENERAL INVESTMENT AUTHORITY.  THE 
MINISTRY OF FISHERIES HAS JURISDICTION OVER COMMERCIAL 
FISHING VENTURES.  THE MINISTRY OF OIL AND MINERAL 
RESOURCES (MOMR) ISSUES REGISTRATION PERMITS FOR 
FOREIGN COMPANIES WISHING TO OPERATE IN THE OIL AND 
MINERALS SECTOR.  ALL OIL FIRMS MUST ALSO REGISTER 
WITH THE MINISTRY OF SUPPLY AND TRADE BEFORE OPENING 
AN OFFICE AND MUST THEN OBTAIN APPROVAL FROM THE 
YEMENI INVESTMENT COMPANY IN OIL AND MINERALS (YICOM), 
A SUBSIDIARY OF MOMR.  FOREIGN OIL COMPANIES SHOULD 
PROVIDE STATEMENTS TO YICOM IN ORDER TO RECEIVE 
AUTHORIZATION TO PARTICIPATE IN TENDERS. 
 
POOR DOCUMENTATION OF LAND OWNERSHIP CAN COMPLICATE 
LEASE NEGOTIATIONS FOR OFFICE SPACE.  YEMENI AND 
FOREIGN COMPANIES HAVE HAD DIFFICULTIES FINDING WELL-TRAINED 
BILINGUAL EMPLOYEES. 
 
SELLING FACTORS/TECHNIQUES:  SOME PRODUCERS USE 
REBATES TO RETAILERS TO INCREASE SHELF SPACE ALLOCATIONS. 
 
- ADVERTISING AND TRADE PROMOTION:  THERE ARE NO 
ADVERTISING AGENCIES IN THE U.S. SENSE AND MANY TV 
ADVERTISEMENTS ARE PRODUCED OUTSIDE THE COUNTRY.  THE 
SOLE ENGLISH-LANGUAGE NEWSPAPER IS THE WEEKLY "YEMEN 
TIMES."  OTHER MAJOR PUBLICATIONS INCLUDE THE OFFICIAL 
DAILIES AL-THAWRA (SANAA), AL-GUMHURIYAH (TAIZ) AND 
14TH OCTOBER (ADEN).  THE ADENI INDEPENDENT PAPER AL-AYAM  
MIGHT ALSO BE APPROPRIATE FOR ADVERTISING. 
 
YEMEN TIMES 
P.O. BOX 2579, SANAA, REPUBLIC OF YEMEN 
PHONE: 967-1-268-661/2 
FAX: 967-1-268-663 
 
AL-THAWRA 
P.O. BOX 1475, SANAA, REPUBLIC OF YEMEN 
PHONE: 967-1-230-114/8/9 
FAX: 967-1-251-505 
 
AL-GUMHURIYAH 
P.O. BOX 6604, TAIZ, REPUBLIC OF YEMEN 
PHONE: 967-4-211-845/69 
FAX: 967-4-212-306 
 
14TH OCTOBER 
P.O. BOX 5487, MAALLA, ADEN, REPUBLIC OF YEMEN 
PHONE: 967-2-243-660/046 
FAX: 967-2-243-029 
 
AL-AYYAM 
P.O. BOX 648, ADEN, REPUBLIC OF YEMEN 
PHONE: 967-2-255-170/254-135 
FAX: 967-2-255-692 
 
PRICING PRODUCTS:  THE GOVERNMENT SETS PRICES FOR 
SUBSIDIZED COMMODITIES (WHEAT AND FLOUR) PLUS 
GASOLINE, ELECTRICITY, TELEPHONES, AND WATER. 
HOWEVER, THERE ARE ALMOST CONSTANT EFFORTS TO PRESSURE 
MERCHANTS TO CONTROL PRICE INCREASES OF OTHER BASIC 
GOODS.  IMPORTED GOODS ARE USUALLY PRICED IN DOLLARS, 
WITH THE RIAL PRICE VARYING ACCORDING TO THE DAILY 
MARKET EXCHANGE RATE. 
 
SALES SERVICE/CUSTOMER SUPPORT:  CUSTOMER SUPPORT 
IS EXTREMELY IMPORTANT.  SPARE PARTS ARE EXPENSIVE AND 
DIFFICULT TO COME BY AND TRAINED REPAIR TECHNICIANS 
ARE RARE.  INITIATING SALES OF (FOR EXAMPLE) CARS, 
WITHOUT ADEQUATE CUSTOMER SERVICE AND SUPPORT, IS A 
SURE RECIPE FOR FAILURE. 
 
SELLING TO THE GOVERNMENT:  YEMENI GOVERNMENT 
PURCHASES ARE MADE THROUGH A TENDERING SYSTEM MANAGED 
BY THE SUPREME TENDER COMMITTEE CHAIRED BY THE 
MINISTER OF CONSTRUCTION, HOUSING AND URBAN PLANNING. 
(TENDERS ARE GOVERNED BY MINISTERIAL LAW 49 OF 1991.) 
USUALLY GOVERNMENT AGENCIES BUY DIRECTLY FROM THE 
EXPORTER.  LOCAL AGENTS CAN BE A CRITICALLY IMPORTANT 
FACTOR IN SHEPHERDING BIDS THROUGH THE TENDER PROCESS. 
TENDERS ARE ANNOUNCED IN THE LOCAL AND FOREIGN PRESS. 
FINANCING IN HARD CURRENCY IS A CONSTRAINT.  THERE ARE 
EFFORTS TO REFORM AND STREAMLINE THE TENDERING SYSTEM. 
TENDER CONDITIONS ARE BASED ON FIDIC. 
 
PROTECTING PRODUCTS FROM IPR INFRINGEMENT:  YEMEN 
HAS AN ADEQUATE COPYRIGHT LAW (LAW 19 OF 1994) BUT A 
WEAK LEGAL SYSTEM.  ALTHOUGH TRADEMARKS HAVE BEEN 
SUCCESSFULLY DEFENDED, IT TAKES, AS ONE YEMENI 
BUSINESSMAN PUT IT, MUSCLE (INFLUENCE WITH THE 
GOVERNMENT AND JUDGES).  YEMEN IS NOT YET A MEMBER OF 
THE WIPO OR OTHER INTERNATIONAL INTELLECTUAL PROPERTY 
RIGHTS CONVENTIONS. 
 
NEED FOR A LOCAL ATTORNEY:  A LIST OF ATTORNEYS IS 
AVAILABLE FROM THE EMBASSY COMMERCIAL OFFICE.  YEMEN'S 
LEGAL DISPUTE RESOLUTION MECHANISMS ARE UNDEVELOPED 
AND MANY CONTRACTS SPECIFY THAT ARBITRATION WILL BE 
DONE OVERSEAS. COMMERCIAL DISPUTES ARE USUALLY WORKED 
OUT BY THE YEMENI REPRESENTATIVES VIA NON-JUDICIAL 
MEANS. 
 
          CHAPTER V.  LEADING SECTORS FOR U.S. EXPORTS 
                            AND INVESTMENT 
 
BEST PROSPECTS FOR NON-AGRICULTURAL GOODS AND 
SERVICES: THE PROSPECTS BELOW ARE RANKED BY ESTIMATED 
GROWTH IN DOLLARS IN THE NEXT YEAR.  ALTHOUGH DATA ON 
MARKET SIZE AND ON TOTAL IMPORTS AND EXPORTS OF 
SPECIFIC ITEMS IS NOT AVAILABLE, THE RANKINGS ARE 
ESTIMATES DRAWN FROM 1993 TRADE INFORMATION, 
CONVERSATIONS WITH IMPORTERS, INVESTORS, AND 
GOVERNMENT OFFICIALS, AND OBSERVATION. 
 
AGRICULTURAL MACHINERY AND EQUIPMENT (AGM):  AFTER 
OIL, AGRICULTURE IS THE LARGEST SECTOR OF THE ECONOMY 
AND IS THE FOCUS OF SEVERAL AID PROJECTS, INCLUDING 
SOME WITH WORLD BANK FUNDING.  IRRIGATION, EROSION 
CONTROL, AND FARM EQUIPMENT SHOULD ALL HAVE A MARKET, 
ASSUMING AVAILABILITY OF DONOR FUNDING.  DRUGS/PHARMACEUTICALS 
(DRG), HEALTH CARE SERVICES (HCS), MEDICAL EQUIPMENT (MED): 
REDUCING THE COST OF MEDICAL TREATMENT ABROAD IS A HIGH BUDGET 
PRIORITY FOR THE YEMENI GOVERNMENT.  EVEN BASIC HEALTH CARE 
SERVICES ARE UNAVAILABLE.  WHILE IMPORTS OF PHARMACEUTICALS AND 
EQUIPMENT SHOULD CONTINUE TO GROW, SOURCES BELIEVE THERE IS ALSO A NICHE 
FOR HIGH-QUALITY PRIMARY CARE CLINICS AS AN ALTERNATIVE TO FOREIGN 
MEDICAL TREATMENT.  ALTHOUGH PAST EFFORTS TO START PRIVATE CLINICS HAVE 
FAILED, THE EMBASSY HAS BEEN ASSURED IT IS DUE TO POOR MANAGEMENT AND 
EFFORTS TO CUT CORNERS ON TRAINING, EQUIPMENT, STAFFING, AND 
CLEANLINESS, RATHER THAN TO LACK OF DEMAND.  AS ONE PERSON SAID: WHY 
WOULD I PAY TO SEE A GOVERNMENT DOCTOR IN HIS PRIVATE CLINIC WHEN I 
WOULDN'T SEE HIM FOR FREE IN THE GOVERNMENT HOSPITAL?  HOWEVER, 
INVESTMENT IN HEALTHCARE SERVICES STILL MAY NOT BE ECONOMICALLY 
VIABLE.  FOR EXAMPLE, THE GOVERNMENT SUBSIDY FOR MEDICAL TREATMENT 
MENTIONED ABOVE IS NOT AVAILABLE FOR PRIVATE TREATMENT IN YEMEN, PUTTING 
THE COST OF PRIVATE TREATMENT OUT OF REACH OF MOST OF THE POPULATION. 
 
COMMERCIAL FISHING EQUIPMENT(CFE), MARINE FISHERIES 
PRODUCTS (SEAFOOD) (MFI):  AFTER OIL AND GAS, FISH 
EXPORTS ARE YEMEN'S MOST PROMISING RESOURCE. 
COMPANIES INTERESTED IN COMMERCIAL FISHING SHOULD 
CONTACT THE MINISTRY OF FISHERIES AS WELL AS THE 
GENERAL INVESTMENT AUTHORITY.  YEMEN HAS A 2,500 KM 
COAST WITH ESTIMATED FISHING POTENTIAL OF 450,000 TONS 
A YEAR.  THUS FAR CATCHES ARE AROUND THE 90,000 TONS A 
YEAR, ABOUT 60 PERCENT OF WHICH HAS BEEN CAUGHT BY 
JOINT-VENTURE COMPANIES WITH FOREIGN PARTICIPATION. 
COMPLETELY PRIVATE FISHING COMPANIES ARE JUST 
BEGINNING TO OPERATE.  ALTHOUGH THE FISHING 
COOPERATIVES ARE NO LONGER UNDER GOVERNMENT CONTROL, 
THE GOVERNMENT DOES TENDER FOR FISHING EQUIPMENT TO 
DISTRIBUTE TO THE COOPERATIVES.  BEFORE 1990 FISHERY 
PROJECTS HAD BEEN FUNDED BY JAPAN, THE EUROPEAN 
COMMUNITY, THE ARAB FUND AND THE WORLD BANK. 
 
OIL/GAS FIELD MACHINERY (OGM), OIL, GAS, MINERAL 
PRODUCTION/EXPLORATION SERVICE (OGS):  ALTHOUGH OIL 
AND OILFIELD SERVICES HAVE BY FAR THE LARGEST SHARE OF 
U.S. AND FOREIGN INVESTMENT, THE SECTOR IS NOT 
EXPECTED TO GROW SIGNIFICANTLY IN THE NEAR FUTURE. 
HOWEVER, NEGOTIATIONS ARE UNDERWAY FOR A USD 5 BILLION 
GAS EXPORT PROJECT.  ALTHOUGH THE FRENCH COMPANY TOTAL 
HAS THE LEAD, THERE WILL BE SIGNIFICANT U.S. 
PARTICIPATION. 
 
RENEWABLE ENERGY EQUIPMENT (REQ): YEMEN'S POWER SUPPLY 
IS INADEQUATE AND LIKELY TO BECOME WORSE.  IN 
ADDITION, MUCH OF THE POPULATION LIVES IN REMOTE AREAS 
WHICH WILL BE DIFFICULT TO CONNECT TO THE NATIONAL 
GRID.  MANY BUSINESSES TRY TO BE SELF-SUFFICIENT IN 
POWER.  THERE IS SPECIAL POTENTIAL IN MUKALLA AND THE 
REST OF THE HADRAMAUT REGION, WHICH IS FAST-GROWING 
AND REMOTE.  YEMEN'S CLIMATE SHOULD FAVOR SOLAR AND 
WIND ENERGY. 
 
TRAVEL/TOURISM SERVICES (TRA), HOTEL/RESTAURANT 
EQUIPMENT (HTL):  WHILE ONLY A SMALL PART OF TOTAL 
GDP, HOTELS AND RESTAURANTS WERE THE FASTEST GROWING 
SEGMENT OF THE ECONOMY IN 1993 AND THERE IS GREAT 
POTENTIAL FOR TOURISTS INTERESTED IN ADVENTURE TRAVEL 
(DIVING, TREKKING), HISTORY, GEOLOGY, ARCHEOLOGY, OR 
ARCHITECTURE.  QUALITY CONTROL IS THE MAJOR PROBLEM 
FOR MOST EXISTING HOTELS.  THERE IS A GREAT SHORTAGE 
OF ADEQUATE HOTELS AND RESTAURANTS FOR BUSINESSMEN (IN 
THE MAJOR CITIES) AND FOR TOURISTS (AT HISTORICAL 
SITES).  PARTS OF COASTAL YEMEN HAVE RESORT POTENTIAL 
WHICH HAS NOT BEEN EXPLOITED. 
 
- BEST PROSPECTS FOR AGRICULTURAL GOODS AND SERVICES: 
WHEAT AND WHEAT FLOUR ARE THE LARGEST U.S. 
AGRICULTURAL EXPORTS TO YEMEN, TOTALING 614,000 METRIC 
TONS OF WHEAT AND 352,000 TONS OF FLOUR IN 1994. 
HOWEVER, THE YEMENI GOVERNMENT'S INTENTION TO REDUCE 
OR ELIMINATE THE SUBSIDIES ON WHEAT AND WHEAT FLOUR 
SHOULD CUT FUTURE CONSUMPTION CONSIDERABLY.  DUE TO 
RAMPANT SMUGGLING ACCURATE INFORMATION ON THE SIZE OF 
THE YEMENI MARKET, AND THE QUANTITY OF EXPORTS AND 
IMPORTS, IS NOT AVAILABLE. 
 
CORN:  CORN IS THE MAIN INGREDIENT FOR ANIMAL FEED IN 
YEMEN.  THE LARGEST USE IS IN THE POULTRY INDUSTRY FOR 
PRODUCTION OF EGGS AND CHICKEN.  THE U.S. IS THE 
DOMINANT SUPPLIER (BASED ON A RECORD OF PROVIDING GOOD 
QUALITY CORN), SUPPLYING 96,000 METRIC TONE LAST YEAR 
(UP FROM 92,000 METRIC TONS IN 1993).  DURING THE WAR 
IN 1994 THE POULTRY INDUSTRY DECLINED DUE TO FEED 
SHORTAGES.  HOWEVER, MOST FIRMS HAVE BEEN REBUILDING 
SINCE THEN AND LONG TERM GROWTH PROSPECTS ARE GOOD. 
 
SOYBEAN MEAL:  MARKET PROSPECTS ARE ALSO GOOD FOR THE 
OTHER MAIN INGREDIENT OF POULTRY FEED, SOYBEAN MEAL. 
THE U.S. IS GENERALLY THE MAIN SUPPLIER (AS SOYBEAN 
MEAL IS FREQUENTLY IMPORTED AND SHIPPED WITH CORN), 
SUPPLYING 25,000 METRIC TONE IN 1994.  STRONG PRICE 
COMPETITION BY COMPETING SUPPLIERS MAY, HOWEVER, LIMIT 
U.S. SALES. 
 
CANNED FRUITS AND VEGETABLES:  THE URBANIZATION OF 
YEMEN'S GROWING POPULATION, NOW AT ABOUT 16 MILLION, 
IS CREATING A LARGER DEMAND FOR CANNED FOOD PRODUCTS. 
ALSO, THE YEMENI GOVERNMENT HAS MADE SIGNIFICANT 
PROGRESS RECENTLY IN REDUCING BARRIERS AND OPENING UP 
THE MARKET. THUS, WHILE THE MARKET REMAINS SMALL, U.S. 
EXPORTERS CAN EXPECT TO FIND A GROWING OPPORTUNITY FOR 
SELECTED FRUIT AND VEGETABLE PRODUCTS.  TOTAL 1994 
EXPORTS OF PROCESSED FRUITS AND VEGETABLES FROM THE 
U.S. TO YEMEN WERE 600 METRIC TONS, DOUBLE THE AMOUNT 
IN 1993. 
 
HONEY:  HONEY IS A TRADITIONAL FOOD PRODUCT IN YEMEN, 
AND A SIGNIFICANT AMOUNT IS IMPORTED TO SUPPLEMENT 
LOCAL OUTPUT.  GOOD QUALITY U.S. HONEY CAN BE SHIPPED 
TO YEMEN AT COMPETITIVE PRICES, OFFERING POTENTIAL FOR 
DEVELOPING THE MARKET THROUGH ADDITIONAL EFFORT.  U.S. 
EXPORTS OF HONEY TO YEMEN TOTALED 400 MT IN 1994, DOWN 
SLIGHTLY FROM 1993 LEVELS BUT SHOWING AN INCREASE IN 
DECEMBER 1994. 
 
SIGNIFICANT INVESTMENT OPPORTUNITIES:  THERE SEEMS 
TO BE A CONSENSUS THAT HEALTH SERVICES AND TOURISM 
OFFER THE BEST INVESTMENT OPPORTUNITIES.  BOTH ARE 
OPEN TO FOREIGN INVESTMENT BUT, AS NOTED ELSEWHERE IN 
THE REPORT, THERE ARE SIGNIFICANT RISKS ATTACHED TO 
ANY INVESTMENT IN YEMEN.  DESPITE THE ECONOMIC 
UNCERTAINTIES YEMEN OFFERS THE ADVANTAGES OF ONE OF 
THE LARGEST MARKETS IN THE REGION (ABOUT 16 MILLION 
PEOPLE), CHEAP LABOR, AND PROXIMITY TO ASIA AND 
EASTERN AFRICA.  SEE CHAPTER VII FOR MORE DETAILS ON 
INVESTMENT. 
 
THE GOVERNMENT OF THE UNITED STATES ACKNOWLEDGES THE 
CONTRIBUTION THAT OUTWARD FOREIGN DIRECT INVESTMENT 
MAKES TO THE U.S. ECONOMY.  U.S. FOREIGN DIRECT 
INVESTMENT IS INCREASINGLY VIEWED AS A COMPLEMENT OR 
EVEN A NECESSARY COMPONENT OF TRADE.  FOR EXAMPLE, 
ROUGHLY 60 PERCENT OF U.S. EXPORTS ARE SOLD BY 
AMERICAN FIRMS THAT HAVE OPERATIONS ABROAD. 
RECOGNIZING THE BENEFITS THAT U.S. OUTWARD INVESTMENT 
BRINGS TO THE U.S. ECONOMY, THE GOVERNMENT OF THE 
UNITED STATES UNDERTAKES INITIATIVES, SUCH AS OVERSEAS 
PRIVATE INVESTMENT CORPORATION (OPIC) PROGRAMS, 
INVESTMENT TREATY NEGOTIATIONS AND BUSINES 
FACILITATION PROGRAMS, THAT SUPPORT U.S. INVESORS. 
 
 
 
       CHAPTER VI.  TRADE REGULATIONS AND STANDARDS 
 
TRADE BARRIERS:  ALMOST ALL TRADE BARRIERS FFECT 
YEMENI BUSINESSES AS MUCH AS THEY AFFECT FOEIGN OR 
AMERICAN BUSINESSES.  CUSTOMS PROCEDURES ARE WIDELY 
CONSIDERED THE MOST SIGNIFICANT BARRIER TO TRADE AND 
ADD TO THE COST OF EVERYTHING FROM SHIPPING TO 
DISTRIBUTION.  ALTHOUGH EFFECTIVE TARIFF RATES ARE 
RELATIVELY LOW FOR THE REGION, SMUGGLING IS RAMPANT 
AND CORRUPTION ADDS DELAY AND EXPENSE TO IMPORTS. 
ANOTHER MAJOR BARRIER IS THE LACK OF AN EFFECTIVE 
LEGAL SYSTEM.  BUSINESSES GO TO EXTREMES TO AVOID THE 
COURT SYSTEM.  THERE HAS ALSO BEEN SIGNIFICANT 
DISINTERMEDIATION OF THE BAKING SYSTEM AND FINANCING 
IS SCARCE. 
 
THE YEMEI GOVERNMENT HAS NOT OFFICIALLY RENOUNCED THE 
ARAB LEAGUE BOYCOTT AGAINST ISRAEL BUT NEGOTIATIONS TO 
REMOVE OFFENDING LANGUAGE FROM COMMERCIAL AND LEGAL 
DOCUMENTS HAS BEEN POSSIBLE. 
 
THE ONGOING ECONOMIC REFORMS SHOULD IMPROVE THE 
BUSINESS CLIMATE. EXCHANGE RATE STABILIZATION AND 
RATIONALIZATIN ARE TOP PRIORITIES.  ELIMINATING 
NEGATIVE INTEREST RATES WILL BE AN IMPORTANT STEP IN 
REVIVING THE RELEVANCE OF THE FINANCIAL SYSTEM. 
 
CUSTOMS VALUATION:  THE RIAL DEVALUATION 
IMPLEMENTED MARCH 29, 1995, CHANGED THE OFFICIAL 
EXCHANGE RATE FOR MOST CUSTOMS VALUATIONS FROM YR 
18/USD TO YR 50/USD.  ESSENTIAL COMMODITIES AND RAW 
MATERIALS ARE EVALUATED NOW AT A MORE FAVORABLE 
EXCHANGE RATE.  IT USUALLY TAKES ROUTINE SHIPMENTS 3 
DAYS TO 2 WEEKS TO CLEAR CUSTOMS.  CUSTOMS TARIFFS AND 
PROCEDURES ARE IN THE PROCESS OF REFORM.  PLEASE CHECK 
WITH THE EMBASSY FOR SPECIFIC INFORMATION. 
 
IMPORT LICENSES:  IMPORT LICENSES ARE STILL 
REQUIRED FOR MOST ITEMS AND ARE ADMINISTERED BY THE 
MINISTRY OF SUPPLY AND TRADE.  IMPORT LICENSES USUALLY 
ARE GRANTED IN 3-10 DAYS.  GOODS IMPORTED WITHOUT A 
LICENSE ARE SUBJECT TO A 100 PERCENT SURCHARGE.  AS OF 
JUNE 1995, COMPANY REGISTRATION IS STILL NECESSARY AND 
THE IMPORTER MUST PROVIDE COPIES OF THE FOLLOWING IN 
ORDER TO OBTAIN A LICENSE.  THE REQUEST SHOULD BE ON 
OFFICIAL LETTER-HEAD SIGNED BY THE IMPORTER OR HIS 
AUTHORIZED REPRESENTATIVE. 
 
 A. TRADING COMPANY'S REGISTRATION (RENEWED ANNUALLY) 
 B. PAST TAX CARD (RENEWED ANNUALLY) 
 C. BILL OR INVOICE OF GOODS TO BE IMPORTED 
 D. TWO PERCENT GUARANTEE THAT THE LICENSE WILL BE USED 
 
EXPORT CONTROLS:  ALL EXPORTS MUST BE LICENSED FOR 
STATISTICAL PURPOSES BUT CONTROLS ARE ONLY REQUIRED 
FOR EXPORTS OF SMALL QUANTITIES OF FISH.  IN 1994 THE 
MINISTRY OF FISHERIES ISSUED REGULATIONS REQUIRING 
EXPORT LICENSES FOR FISH.  INTENDED AS A TEMPORARY 
MEASURE TO LIMIT SPORADIC EXPORTS BY INDIVIDUALS AND 
TO RESTORE LOCAL SUPPLIES, THE REGULATIONS ARE STILL 
IN EFFECT.  COMMERCIAL-QUANTITY FISH EXPORTS ARE NOT 
SUBJECT TO EXPORT CONTROLS. 
 
 - IMPORT/EXPORT DOCUMENTATION:  AVAILABLE FROM THE 
MINISTRY OF SUPPLY AND TRADE. 
 
 - TEMPORARY ENTRY:  MOST GOODS ARRIVING IN YEMEN ARE 
DESTINED FOR YEMEN. 
 
 - LABELING, MARKING REQUIREMENTS:  TO THE BEST OF 
EMBASSY'S KNOWLEDGE, GCC STANDARDS ARE APPROPRIATE. 
 
 - PROHIBITED IMPORTS:  IN RECENT MONTHS THE LIST OF 
64 PROHIBITED ITEMS HAS BEEN DRAMATICALLY REDUCED. 
PROHIBITED ITEMS NOW INCLUDE ALL TYPES OF FRESH FRUITS 
AND VEGETABLES, (WITH SPECIFIC MENTION OF GRAPES AND 
RAISINS, ALMONDS AND PISTACHIOS, COFFEE AND HUSKS, 
KEBZERA (A LOCAL HERB), HOT PEPPERS, MILLET, BARLEY, 
AND FENUGREEK), ALL TYPES OF SALT; HENNA; NARCOTICS 
AND POISONS (EXCEPT AS AUTHORIZED BY THE MINISTRY OF 
HEALTH); READY-MADE WINDOWS AND DOORS; PORK AND 
RHINOCEROS HORN. 
 
 - STANDARDS:  THE MINISTRY OF INDUSTRY REGULATES 
STANDARDS AND TESTS PRODUCTS FOR COMPLIANCE.  IN 
GENERAL, YEMEN FOLLOWS GULF COOPERATION COUNCIL (GCC) 
STANDARDS.  THE MINISTRY CAN ALSO TEST FOR ISO, U.S., 
AND EUROPEAN STANDARDS. 
 
 - FREE TRADE ZONES/WAREHOUSES:  THE FREE TRADE ZONE 
LAW (LAW 4 OF 1993) WAS PASSED BUT NEVER IMPLEMENTED. 
THE FIRST FREE TRADE ZONE, WHICH WILL BE ADEN, IS 
EVOKING INVESTOR INTEREST BUT IS HINDERED BY POLITICAL 
PROBLEMS.  OTHER FREE TRADE ZONES HAVE NOT BEEN 
DESIGNATED. 
 
 - SPECIAL IMPORT PROVISIONS:  THE MARCH 1995 ECONOMIC 
REFORMS ATTEMPT TO RESTRICT IMPORTS OF CARS AND LUXURY 
ITEMS. 
 
 - MEMBERSHIP IN FREE TRADE ARRANGEMENTS:  YEMEN 
REPORTEDLY HAS MANY TRADE AGREEMENTS BUT THE EMBASSY 
HAS BEEN UNABLE TO OBTAIN A LIST.  TO THE BEST OF OUR 
KNOWLEDGE NONE OF THE AGREEMENTS HAVE A SIGNIFICANT 
IMPACT ON TRADE PROCEDURES. 
 
 
 
                  CHAPTER VII.  INVESTMENT CLIMATE 
 
A 1 - OPENNESS TO FOREIGN INVESTMENT:  UNDER THE 
INVESTMENT CODE  (LAW 22 OF 1991) FOREIGN INVESTORS 
ARE ACCORDED NATIONAL TREATMENT AND RECEIVE INVESTMENT 
INCENTIVES.  REPUBLICAN DECREE NUMBER 14 OF 1995 
AMENDED THE INVESTMENT CODE TO REDUCE GOVERNMENT 
CONTROL.  THE GENERAL INVESTMENT AUTHORITY (GIA) WAS 
ESTABLISHED UNDER THE INVESTMENT CODE.  IT CURRENTLY 
SCREENS INVESTMENTS, BUT SINCE 1991 ONLY ONE PROPOSAL 
OUT OF OVER 600 APPLICATIONS HAS BEEN REJECTED (ON THE 
GROUNDS THAT IT WAS NOT REALLY AN INVESTMENT).  THE 
EMBASSY RECOMMENDS THAT POTENTIAL INVESTORS MAKE THE 
GIA THEIR FIRST CONTACT, AND ACQUIRE A COPY OF THE 
INVESTMENT CODE, WHICH DETAILS INVESTMENT INCENTIVES 
AND PROCEDURES, EARLY ON. 
 
ALTHOUGH THE GOVERNMENT ENCOURAGES FOREIGN INVESTMENT, 
IT IS BLOCKED BY THE SAME BARRIERS WHICH CRIPPLE 
DOMESTIC INVESTMENT.  YEMENI FIRMS COMPLAIN BITTERLY 
ABOUT INVESTMENT CONSTRAINTS BUT EXISTING FIRMS 
BENEFIT FROM THE DISTORTIONS WHICH KEEP COMPETITORS 
OUT OF THE MARKET AND HAVE SHOWN A MARKED RELUCTANCE 
TO MAKE A STRONG AND UNIFIED CASE FOR ACROSS-THE-BOARD 
REFORMS.  POST IS NOT AWARE OF OTHER OPPOSITION TO 
FOREIGN INVESTMENT, INCLUDING BY ORGANIZED LABOR. 
INVESTORS, ESPECIALLY IN THE OIL SECTOR, CAN FACE 
UNREALISTICALLY HIGH EXPECTATIONS BY POTENTIAL 
BENEFICIARIES OF THE INVESTMENT (EMPLOYEES, NEARBY 
VILLAGERS), WHICH CAN LEAD TO DISAPPOINTMENT AND 
SUBSEQUENT PROBLEMS. 
 
FOREIGN AND DOMESTIC INVESTORS ARE BOUND BY THE SAME 
VISA AND WORK PERMIT REQUIREMENTS FOR FOREIGN WORKERS. 
WHILE TIME CONSUMING, THE REGULATIONS ARE NOT 
PROHIBITIVE.  HOWEVER, THERE IS STRONG PRESSURE TO 
HIRE YEMENIS WHEN POSSIBLE.  WHILE FOREIGN INVESTORS 
RECEIVE NATIONAL TREATMENT, THEY DO NOT RECEIVE EXTRA 
PRIVILEGES.  TARIFF AND NON-TARIFF BARRIERS, SUCH AS 
EFFORTS TO LIMIT IMPORTS AND PRESSURE TO CONTROL 
PRICES OF BASIC PRODUCTS MADE OF IMPORTED GOODS, ARE 
APPLIED TO ALL PRODUCERS. 
 
FOREIGN INVESTMENT IS RESTRICTED IN SOME AREAS, 
PRIMARILY TO PROTECT EXISTING PRODUCTION AND SMALL 
INDIVIDUAL INVESTORS.  FOR EXAMPLE FOREIGN INVESTORS 
ARE PROHIBITED FROM ONE-VEHICLE TRANSPORT INVESTMENTS 
BUT BUS OR TRUCKING COMPANIES ARE NOT RESTRICTED. 
BREAD PRODUCTION IS ALSO RESERVED TO DOMESTIC 
INVESTORS.  INVESTMENTS IN CEMENT, ELECTRICITY, SMALL 
HOSPITALS AND SCHOOLS, SEA AND AIR TRANSPORT, 
FISHERIES, ENERGY, CONSTRUCTION MATERIALS AND BELOW- 
THREE-STAR HOTELS AND RESTAURANTS USUALLY REQUIRE 25- 
30 PERCENT PARTICIPATION BY A YEMENI PARTNER. 
 
YEMEN IS JUST BEGINNING PRIVATIZATION OF A WIDE RANGE 
OF STATE OWNED ENTERPRISES.  EARLY SIGNS ARE THAT 
FOREIGN INVESTMENT WILL BE WELCOMED.  THE MINISTRY OF 
INDUSTRY HANDLES INDUSTRIAL PRIVATIZATION AND THE 
MINISTRY OF PLANNING AND DEVELOPMENT HANDLES OTHER 
AREAS.  INVESTORS ARE ADVISED TO CONTACT THE 
APPROPRIATE MINISTRY FOR INFORMATION ON PRIVATIZATION 
POSSIBILITIES. 
 
ALTHOUGH FOREIGN INVESTORS ARE NOT LEGALLY RESTRICTED 
FROM PARTICIPATION, THE YEMENI GOVERNMENT DOES NOT, TO 
OUR KNOWLEDGE, CURRENTLY FINANCE RESEARCH OR 
DEVELOPMENT PROJECTS. 
 
A 2 - CONVERSION AND TRANSFER POLICIES:  FOREIGN 
EXCHANGE CONTROLS DO NOT AFFECT INVESTORS UNDER THE 
GIA, WHO ARE EXPECTED TO EXCHANGE CURRENCY AT THE 
PARALLEL MARKET RATE.  HOWEVER, THUS FAR COMPANIES 
OPERATING UNDER OIL PSAS ARE RESTRICTED TO THE 
OFFICIAL EXCHANGE RATE, WHICH IS ABOUT ONE THIRD THE 
MARKET RATE.  WHILE IMPORT AND EXPORT OF YEMENI RIALS 
IS PROHIBITED, TRANSFERS OF FOREIGN CURRENCY ARE 
UNRESTRICTED (AND UNCONTROLLED) AND INVESTORS DO NOT 
EXPERIENCE DELAYS.  CAPITAL WHICH HAS BEEN INVESTED 
CAN BE EXPORTED.  PROFITS BEYOND THE ORIGINAL 
INVESTMENT CAN BE REPATRIATED.  RECENTLY-IMPLEMENTED 
ECONOMIC REFORMS ARE AIMED AT LOOSENING RESTRICTIONS 
ON CURRENCY TRANSFERS.  COMMERCIAL BANKS HAVE BEEN 
GIVEN AUTHORITY TO TRANSFER REMITTANCES IN THE 
ORIGINAL CURRENCY (RATHER THAN IN RIALS AT THE 
OFFICIAL RATE) AND TO EXCHANGE MONEY AT NEAR-MARKET 
RATES.  CURRENCY EXCHANGE AND TRANSFER POLICIES, WHILE 
DISTORTED AT THIS POINT, ARE EXPECTED TO BE 
LIBERALIZED IN THE NEAR FUTURE.  THE EMBASSY 
UNDERSTANDS THAT AS OF MID-JUNE 1995 MONEYCHANGERS' 
TRADITIONAL FOREIGN TRANSFER CAPABILITIES HAVE BEEN 
LEGALLY RECOGNIZED. 
 
MONEYCHANGERS, WHICH OPERATE A LEGAL PARALLEL MARKET, 
ARE WELL-CONNECTED TO THE INTERNATIONAL FINANCIAL 
SYSTEM.  THE ENTIRE FINANCIAL SYSTEM, INCLUDING THE 
ROLE OF THE COMMERCIAL BANKS, THE MONEYCHANGERS, AND 
THE CENTRAL BANK, IS UNDERGOING RAPID CHANGE AND 
REFORM.  INVESTORS SHOULD CONTACT THE GENERAL 
INVESTMENT AUTHORITY OR THE EMBASSY FOR UP-TO-DATE 
INFORMATION. 
 
THE RIAL WAS DEVALUED ON MARCH 29, 1995, FROM YR 
12/USD TO YR 50/USD.  FURTHER DEVALUATIONS ARE 
EXPECTED.  THE LEGAL MARKET EXCHANGE RATE IS ABOUT YR 
160/USD AS OF JULY, 1995.  THE YEMENI GOVERNMENT HAS 
EXPRESSED A COMMITMENT TO RATIONALIZING THE EXCHANGE 
RATE GRADUALLY, BUT PERHAPS BY THE END OF 1995. 
 
A 3 - EXPROPRIATION AND COMPENSATION:  THE GOVERNMENT 
HAS NOT EXPROPRIATED PROPERTY SINCE THE UNIFICATION OF 
FORMER YAR (NORTH) AND PDRY (SOUTH) IN MAY 1990 AND 
THE POSSIBILITY OF FUTURE EXPROPRIATION IS EXTREMELY 
UNLIKELY.  ALTHOUGH THE GOVERNMENT HAS EXPRESSED ITS 
INTENTION TO RETURN PROPERTY EXPROPRIATED BY THE 
FORMER SOCIALIST GOVERNMENT OF THE PDRY, IT IS STILL A 
THORNY ISSUE IN ADEN WHICH CLOUDS THE INVESTMENT 
PICTURE.  THE YEMENI GOVERNMENT HAS ASKED THE EMBASSY 
TO FORWARD ANY CLAIMS BY U.S. ENTITIES TO EXPROPRIATED 
PROPERTY.  HOWEVER, THE LACK OF RELIABLE TITLE 
RECORDS, THE MULTIPLE LAYERS OF EXPROPRIATION SINCE 
THE 1960S, AND THE QUESTION OF WHERE TO HOUSE CURRENT 
OCCUPANTS OF EXPROPRIATED PROPERTY, PREVENT RAPID 
PROGRESS. 
 
A 4 - DISPUTE SETTLEMENT:  DISPUTE SETTLEMENT IS ONE 
OF THE WEAKEST FACETS OF YEMEN'S INVESTMENT CLIMATE. 
THE COURT SYSTEM IS CORRUPT AND MOST COMPANIES, 
FOREIGN AND DOMESTIC, GO TO GREAT LENGTHS TO AVOID THE 
FORMAL COURT SYSTEM.  WHILE YEMEN HAS A LONG TRADITION 
OF NON-JUDICIAL DISPUTE RESOLUTION, FOREIGN FIRMS CAN 
BE HANDICAPPED IF THEY LACK A YEMENI PARTNER WITH 
APPROPRIATE CONNECTIONS AND UNDERSTANDING OF THE 
SYSTEM.  ALTHOUGH DISPUTES ARE EVENTUALLY SETTLED MORE 
AMICABLY THAN IN SOME NEIGHBORING MARKETS, THIS ISSUE 
SHOULD BE A SIGNIFICANT CONSIDERATION FOR INVESTORS. 
THE GOVERNMENT IS AWARE OF THE PROBLEMS IN THE LEGAL 
SYSTEM AND IS IN THE PROCESS OF EXPANDING AND 
STRENGTHENING THE COMMERCIAL COURTS. 
 
INVESTORS ARE PROTECTED IN CASES OF DISPUTE BY THE 
PROVISIONS OF THE INVESTMENT CODE, WHICH RECOGNIZES 
INTERNATIONAL ARBITRATION, INCLUDING BY THE 
INTERNATIONAL CONVENTION FOR SETTLEMENT OF INVESTMENT 
DISPUTES AND THE U.N. COMMISSION ON INTERNATIONAL 
TRADE LAW.  (YEMEN IS NOT YET A MEMBER OF 
INTERNATIONAL ARBITRATION BODIES DUE TO ADMINISTRATIVE 
DELAYS.)  ALTHOUGH YEMEN'S LAWS TEND TO BE GOOD, THERE 
IS NO RELIABLE WAY OF ENFORCING THEM.  MANY CONTRACTS 
SPECIFY THAT ARBITRATION WILL TAKE PLACE OVERSEAS. 
 
BANKRUPTCY PROCEEDINGS ARE HANDLED UNDER COMMERCIAL 
LAW.  ONE PROBLEM HAS BEEN THE LIKELIHOOD THAT THE 
COURTS, WHICH USE ISLAMIC SHARIA LAW, WILL ALMOST 
ALWAYS DISALLOW INTEREST PAYMENTS ("RIBA").  THE 
CONCEPT OF MORTGAGES IS NOT CURRENT IN YEMEN, DUE IN 
PART TO THE WEAKNESS IN LAND TITLE REGISTRATION. 
 
A 5 - PERFORMANCE REQUIREMENTS/INCENTIVES:  ACCORDING 
TO THE GIA, THERE ARE NO PERFORMANCE REQUIREMENTS. 
THE TREND IS FOR A LESSENING OF OBSTRUCTIONS TO DOING 
BUSINESS.  EMBASSY IS INTERESTED IN HEARING OF 
PROBLEMS ENCOUNTERED BY AMERICAN COMPANIES.  FURTHER 
DETAILS ON INVESTMENT INCENTIVES SHOULD BE DISCUSSED 
WITH THE GIA. 
 
WITH REGARD TO CONDITIONS ON PERMISSION TO INVEST, THE 
GIA DOES NOT INSIST ON CONDITIONS, ALTHOUGH IT WILL 
EXPRESS PREFERENCES REGARDING LOCATION AND OTHER 
MATTERS IF ASKED.  INVESTORS ARE NOT REQUIRED TO 
DISCLOSE PROPRIETARY INFORMATION.  DISCLOSURE 
REQUIREMENTS ARE LIMITED TO FINANCIAL AND EMPLOYMENT 
DATA. 
 
A 6 - RIGHT TO PRIVATE OWNERSHIP AND ESTABLISHMENT: 
FOREIGN INVESTORS MAY OWN PROPERTY AND ENGAGE IN 
BUSINESS, WITH THE LIMITATIONS LISTED ABOVE.  THE GIA 
SHOULD BE CONSULTED FOR MORE DETAILS. 
 
THE ROLE OF PUBLIC ENTERPRISES IS CURRENTLY THE TARGET 
OF REFORM, WITH THE GOAL OF PRIVATIZING THEM AND 
MAKING THEM COMPETITIVE.  WE HAVE BEEN TOLD 
UNOFFICIALLY THAT PUBLIC SECTOR ENTERPRISES ARE NOT A 
FACTOR IN THE LOCAL SUPPLY AND DEMAND BALANCE.  FOR 
EXAMPLE, THE SUBSIDY ON GOVERNMENT-PRODUCED CEMENT WAS 
ELIMINATED IN MARCH 1995.  HOWEVER, ANTI-COMPETITIVE 
PUBLIC ENTERPRISES DO STILL EXIST.  THE GOVERNMENT 
WOULD STRONGLY SUPPORT INVESTMENTS WHICH PROVIDE 
SIGNIFICANT PRIVATE-SECTOR JOBS TO EASE THE PRESSURE 
ON GOVERNMENT EMPLOYMENT. 
 
WITH REGARD TO THE RIGHT TO DISPOSE OF INVESTMENTS, IT 
IS UNLIMITED BEFORE FAVORABLE INVESTMENT EXEMPTIONS 
HAVE BEEN USED.  CAPITAL CAN BE REPATRIATED AT ANY 
TIME IF THE INVESTMENT IS CANCELED BEFORE BEING 
STARTED OR AFTER DUTY-EXEMPTED IMPORTED EQUIPMENT AND 
TAX BENEFITS HAVE BEEN DEPRECIATED.  MOST INVESTMENTS 
CAN BE FREELY DISPOSED OF AFTER THREE YEARS.  CHECK 
WITH THE GIA FOR DETAILS. 
 
A 7  - PROTECTION OF PROPERTY RIGHTS:  PROTECTION OF 
PROPERTY, BOTH PHYSICAL AND INTELLECTUAL, IS WEAK. 
YEMEN IS NOT A SIGNATORY TO ANY INTERNATIONAL IPR 
AGREEMENTS ALTHOUGH OFFICIALS HAVE EXPRESSED SUPPORT 
FOR JOINING THE PARIS CONVENTION.  WHAT PROTECTION 
EXISTS IS OFFERED UNDER LAW 19 OF 1994 AND 
BUSINESSPEOPLE REPORT THAT GIVEN SUFFICIENT "MUSCLE" 
THE LAW HAS BEEN SUCCESSFULLY ENFORCED.  THE EMBASSY 
IS PREPARED TO SUPPORT COMPANIES WHICH ENCOUNTER 
PROBLEMS WITH PROPERTY PROTECTION. 
 
PROTECTION OF REAL PROPERTY IS A PROBLEM DUE TO THE 
POOR LAND RECORDS AND LACK OF PROPERTY REGISTRATION. 
GUN BATTLES TO GAIN CONTROL OF DISPUTED PROPERTY ARE 
COMMON.  BANKS ARE RELUCTANT TO ACCEPT COLLATERAL AS 
TITLE CAN TAKE YEARS TO ESTABLISH.  (HOWEVER, BANKERS 
REPORT THAT SOME CASES HAVE BEEN WON.) 
 
A 8  - REGULATORY SYSTEM:  YEMEN'S LAWS ARE CONSIDERED 
TO BE GOOD, BUT ENFORCEMENT IS WEAK.  IN ADDITION, 
MANY REGULATIONS HAVE DEVELOPED OVER TIME WHICH HINDER 
BUSINESS.  THE GOVERNMENT IS IN THE PROCESS OF 
ELIMINATING UNNECESSARY REGULATIONS AND REDUCING RED 
TAPE.  HOWEVER, BUREAUCRATIC PROCEDURES ARE, ALMOST 
UNIVERSALLY, A NIGHTMARE.  CREDIT, FINANCING, AND 
FLOWS OF CAPITAL ARE ALL HAMSTRUNG BY REGULATORY 
DISTORTIONS.  OFFICIALS HAVE BEEN KNOWN TO HARASS 
COMPANIES (DOMESTIC AND FOREIGN) WITH HAPHAZARD 
ENFORCEMENT OF LAWS AND REGULATIONS. YEMEN IS STILL A 
CASH SOCIETY AND BUSINESS IS DONE IN PERSON (RATHER 
THAN BY LETTER OR PHONE).  THE GIA WAS ESTABLISHED TO 
CUT RED TAPE FOR INVESTORS AND IS, TO SOME EXTENT, 
SUCCESSFUL. 
 
THE GOVERNMENT HAS PROPOSED ESTABLISHING A SECURITIES 
MARKET BUT AT THIS POINT NONE EXISTS, INCLUDING FOR 
OFFICIAL FINANCIAL PAPER. 
 
A 9 - EFFICIENT CAPITAL MARKETS AND PORTFOLIO 
INVESTMENT:  YEMEN DOES NOT HAVE CAPITAL MARKETS. 
FINANCIAL FLOWS ARE INEFFICIENT.  CREDIT IS NOT 
ALLOCATED ON MARKET TERMS, CREDIT INSTRUMENTS ARE NOT 
AVAILABLE, ACCOUNTING SYSTEMS ARE NOT TRANSPARENT AND 
THERE IS NOT AN EFFECTIVE REGULATORY SYSTEM TO 
FACILITATE PORTFOLIO INVESTMENT. 
 
TOTAL ASSETS OF THE FOUR LARGEST BANKS WERE ESTIMATED 
AT ABOUT YR 30 BILLION IN DECEMBER 1993 (EQUALING 
ABOUT USD 2.5 BILLION AT THE OFFICIAL RATE AND ABOUT 
HALF A BILLION DOLLARS AT THE THEN-MARKET RATE.  THIS 
EXCLUDES ARAB BANK, INDOSUEZ AND THE NATIONAL BANK.) 
WHILE FUNCTIONING (BARELY) THE FINANCIAL SYSTEM CANNOT 
BE CONSIDERED SOUND.  ESTIMATES OF NON-PERFORMING 
ASSETS ARE NOT AVAILABLE. 
 
A 10 - POLITICAL VIOLENCE:  WEAPONS, FROM TRADITIONAL 
DJAMBIAS TO AK-47S, ARE A BASIC ACCESSORY FOR MOST 
YEMENI MEN BUT THE USE OF FORCE IS RARE.  VIOLENCE 
AGAINST PROJECTS (THUS FAR IN THE OIL SECTOR) IS 
USUALLY LIMITED TO BLOCKADES AND WORK OBSTRUCTION 
RATHER THAN SABOTAGE.  POLITICAL VIOLENCE IS BECOMING 
LESS AND LESS COMMON.  FEAR OF POLITICAL VIOLENCE 
SHOULD NOT BE A DETERRENT TO BUSINESS TRAVEL. 
COMPANIES CONSIDERING ESTABLISHING A PERMANENT 
PRESENCE IN YEMEN WOULD WANT TO EVALUATE THE SITUATION 
FIRST-HAND. 
 
ALTHOUGH THE SECURITY SITUATION IS BETTER THAN IT WAS 
IN 1994, YEMEN HAS A LONG TRADITION OF HOSTAGE TAKING 
FOR POLITICAL ENDS.  BEFORE THE 1994 CIVIL WAR 
FOREIGNERS BECAME POPULAR TARGETS BECAUSE OF THE HIGH- 
LEVEL GOVERNMENT RESPONSE AND THE LACK OF TRIBAL 
RETRIBUTION.  THERE HAS BEEN A SHARP DECLINE IN 
KIDNAPING OF EXPATRIATES SINCE THE WAR.  HOSTAGE- 
TAKING FOLLOWS AN ESTABLISHED RITUAL AND KIDNAP 
VICTIMS HAVE, TO DATE, ALL BEEN RELEASED UNHARMED. 
OTHER THAN KIDNAPING OR CARJACKING, VIOLENCE IS NOT 
USUALLY TARGETED AGAINST FOREIGNERS.  ALTHOUGH RECENT 
ECONOMIC PROBLEMS HAVE BROUGHT AN INCREASE IN ORDINARY 
CRIME, LEVELS ARE FAR BELOW THOSE ENCOUNTERED IN MOST 
U.S. CITIES. 
 
THE EMBASSY HAS RETURNED TO NORMAL STAFFING AFTER THE 
WAR.  EMBASSY FAMILIES ARE RESIDENT IN SANAA, AND 
TRAVEL FREELY THROUGH YEMEN, ALTHOUGH CAUTION IS STILL 
ADVISED WHEN TRAVELING NORTH AND EAST OF SANAA. 
 
B.  - BILATERAL INVESTMENT AGREEMENTS:  YEMEN AND THE 
U.S. SIGNED A BILATERAL INVESTMENT AGREEMENT IN 1972, 
UNDER WHICH OPIC IS ABLE TO OPERATE. 
 
C.  - OPIC AND OTHER INVESTMENT INSURANCE PROGRAMS: 
OPIC OPERATES IN YEMEN.  EXIMBANK IS OFF COVER.  YEMEN 
IS NOT A MEMBER OF THE MULTILATERAL INVESTMENT 
GUARANTEE AGENCY. 
 
D.  - LABOR:  YEMEN IS A POPULOUS COUNTRY WITH 
EXTREMELY HIGH (OVER 30 PERCENT) UNEMPLOYMENT AND LOW 
(ABOUT USD 3/DAY FOR UNSKILLED LABOR IN MID-1995) 
WAGES.  HOWEVER, SKILLED LABOR (INCLUDING BASIC 
LITERACY) IS SCARCE.  THERE IS NO COMPREHENSIVE DATA 
ON WAGES OR THE LABOR FORCE. 
 
A NEW UNIFIED LABOR LAW WAS IMPLEMENTED MARCH 1995 
(LAW 5 OF 1995).  THE LAW, WHICH WAS DEVELOPED BY THE 
LABOR MINISTRY IN CONJUNCTION WITH THE UNIONS AND 
PARLIAMENT, FOR THE FIRST TIME GUARANTEES THE RIGHT TO 
STRIKE AND EQUAL LABOR RIGHTS FOR WOMEN.  PRIVATE 
SECTOR FIRMS WITH MORE THAN 10 EMPLOYEES ARE REQUIRED 
TO SUBMIT WAGE CONTRACTS TO THE MINISTRY OF LABOR FOR 
APPROVAL. 
 
COMPANIES (AND GOVERNMENT OFFICES) ARE UNDER EXTREME 
PRESSURE TO HIRE MORE EMPLOYEES THAN NECESSARY. 
YEMENIZATION, TRAINING YEMENIS FOR POSITIONS HELD BY 
EXPATRIATES, IS STRONGLY ENCOURAGED.  LABOR RELATIONS 
HAVE BEEN SMOOTHER SINCE THE DEPARTURE OF THE 
SOCIALIST PARTY DURING THE 1994 CIVIL WAR. 
E. - FOREIGN TRADE ZONES/FREE PORTS:  YEMEN HAS A FREE 
ZONE LAW AND A FREE ZONE AUTHORITY, BUT THUS FAR NO 
FREE ZONES HAVE BEEN IMPLEMENTED.  DEVELOPMENT OF 
ADEN, THE FIRST PROPOSED FREE ZONE, IS HINDERED BY 
NUMEROUS POLITICAL FACTORS, INCLUDING RETURN OF 
EXPROPRIATED PROPERTY. 
 
F.  - CAPITAL OUTFLOW POLICY:  NO DATA IS AVAILABLE 
ALTHOUGH YEMENI CAPITAL ABROAD IS CONSERVATIVELY 
ESTIMATED AT USD 5-15 BILLION.  INVESTORS ARE ENTITLED 
TO FREELY REPATRIATE PROFITS. 
 
G.  FOREIGN DIRECT INVESTMENT (FDI) STATISTICS: 
INFORMATION  NOT YET AVAILABLE.  MOST U.S. AND OTHER 
FOREIGN INVESTMENT IS IN THE OIL SECTOR, WITH SOME 
U.S. INVESTMENT IN FOOD AND CONSUMER PRODUCTS 
PRODUCTION. 
 
 
 
        CHAPTER VIII.  TRADE AND PROJECT FINANCING 
 
BRIEF DESCRIPTION OF BANKING SYSTEM:  ECONOMIC 
DISTORTIONS HAVE MARGINALIZED THE COMMERCIAL BANKS. 
THERE ARE SEVEN MAIN COMMERCIAL BANKS BUT MOST 
CURRENCY EXCHANGES ARE DONE BY LICENSED MONEYCHANGERS. 
INTEREST RATES ARE NEGATIVE AND THE RIAL HAS 
DEPRECIATED BY 131 PERCENT IN RELATION TO THE DOLLAR 
BETWEEN JANUARY 1, 1994 AND JUNE 30, 1995.  HOWEVER, 
RECENT ECONOMIC REFORMS ARE INTENDED TO STRENGTHEN THE 
BANKING SYSTEM. 
 
FOREIGN EXCHANGE CONTROLS AFFECTING TRADING: 
IMPORT AND EXPORT OF YEMENI BANK NOTES IN PROHIBITED. 
IMPORT AND EXPORT OF FOREIGN CURRENCY IN UNRESTRICTED. 
COMPANIES WHICH INVEST UNDER THE GENERAL INVESTMENT 
AUTHORITY ARE EXPECTED TO EXCHANGE THEIR CURRENCY AT 
MARKET RATES.  HOWEVER, OIL COMPANIES OPERATING UNDER 
PRODUCTION SHARING AGREEMENTS ARE RESTRICTED TO THE 
OFFICIAL EXCHANGE RATE (YR 50/USD, ABOUT A THIRD THE 
MARKET RATE, AS OF JULY 1995). 
 
GENERAL FINANCING AVAILABILITY:  MANY HIGH-PRIORITY 
PROJECTS ARE STALLED DUE TO LACK OF FINANCING. 
COMMERCIAL BANKS OFTEN REQUIRE 100 PERCENT COLLATERAL 
FOR LETTERS OF CREDIT. EXIMBANK IS OFF COVER IN YEMEN. 
 
HOW TO FINANCE EXPORTS/METHODS OF PAYMENT: THE 
EMBASSY STRONGLY RECOMMENDS FINANCING VIA CONFIRMED 
LETTER OF CREDIT. 
 
PROJECT FINANCING AVAILABLE:  USAID HAS A SMALL 
PROGRAM IN YEMEN ADDRESSING MATERNAL/CHILD HEALTH, 
POPULATION, AND DEMOCRATIZATION.  THE U.S. TRADE AND 
DEVELOPMENT AGENCY (TDA) HAS FINANCED FEASIBILITY 
STUDIES FOR SEVERAL PROJECTS IN YEMEN.  THERE IS ABOUT 
$300 MILLION IN IDA PROJECT FUNDS IN THE PIPELINE FOR 
YEMEN.  WORLD BANK PROJECTS FOCUS ON AGRICULTURE, 
INFRASTRUCTURE (ROADS) AND HUMAN DEVELOPMENT. 
 
LIST OF BANKS WITH CORRESPONDENT U.S. BANKING 
ARRANGEMENTS:  ARAB BANK, BANK INDOSUEZ, INTERNATIONAL 
BANK OF YEMEN, YEMEN BANK FOR RECONSTRUCTION AND 
DEVELOPMENT, YEMEN COMMERCIAL BANK, AND YEMEN KUWAIT 
BANK FOR TRADE AND INVESTMENT. (SEE APPENDIX E FOR 
BANK CONTACT INFORMATION.) 
 
 
 
                         CHAPTER IX. 
 
BUSINESS TRAVEL 
 
BUSINESS CUSTOMS:  PERSONAL RELATIONSHIPS ARE 
EXTREMELY IMPORTANT WHEN DOING BUSINESS IN YEMEN. 
ALTHOUGH SPONSORS AND AGENTS ARE NOT LEGALLY REQUIRED, 
IT IS DIFFICULT TO DO BUSINESS WITHOUT AN EXPERIENCED 
YEMENI PARTNER.  BUSINESSMEN SHOULD NOT INQUIRE AFTER 
YEMENI CONTACTS' FAMILIES UNTIL AFTER HAVING MET THE 
FAMILY.  EAT FROM COMMUNAL DISHES WITH YOUR RIGHT 
HAND.  DON'T SHOW THE SOLES OF YOUR FEET TO 
INTERLOCUTORS.  INFORMAL MEETINGS ARE OFTEN HELD IN A 
CARPETED "MUFRAJ," IN WHICH YOU WILL REMOVE YOUR SHOES 
AND SIT ON CUSHIONS ON THE FLOOR.  WEAR APPROPRIATE 
SOCKS AND COMFORTABLE SKIRTS OR PANTS. 
 
BE AWARE THAT "INSHALLAH" ("GOD WILLING") DOES NOT MEAN 
YES AND THAT EXCESSIVE DELAY MAY BE A POLITE WAY OF 
SAYING "NO."  (A YEMENI COUNTERPART MAY HESITATE TO 
GIVE A DIRECTLY NEGATIVE ANSWER.)   HOWEVER, EXCESSIVE 
DELAY COULD ALSO JUST BE BUSINESS-AS-USUAL. CORRUPTION 
AND RED TAPE ARE EPIDEMIC. 
 
MOST OFFICES SHUT IN THE EARLY AFTERNOON, REOPENING 
ABOUT 4:00 P.M.  BUSINESS VISITORS MAY BE INVITED TO 
AN AFTERNOON QAT CHEW BY YEMENI CONTACTS AND CAN USE 
THE TIME TO SOLIDIFY RELATIONSHIPS.  CHEWING QAT IS 
NOT OBLIGATORY AND YOUR HOSTS WILL BE EQUALLY 
GRATIFIED (AND AMUSED) IF YOU TRY IT OR POLITELY 
REFUSE.  AN AMPHETAMINE-LIKE SUBSTANCE CLASSIFIED BY 
THE U.S. GOVERNMENT AS A "CLASS IV NARCOTIC," QAT IS 
NOT RECOMMENDED FOR PEOPLE WITH HEART PROBLEMS OR HIGH 
BLOOD PRESSURE.  QAT SHOULD ALSO BE AVOIDED BY THOSE 
WITH CONCERNS ABOUT INSOMNIA OR GASTRO-INTESTINAL 
PROBLEMS. 
 
TRAVEL ADVISORY AND VISAS:  VISAS ARE REQUIRED 
BEFORE TRAVELING TO YEMEN BUT A SPONSOR IS NOT 
NECESSARY AND TOURISM IS ENCOURAGED.  TRAVEL WARNINGS 
AND THE CONSULAR INFORMATION SHEET (CIS) FOR YEMEN ARE 
AVAILABLE 24 HOURS A DAY BY CALLING THE STATE 
DEPARTMENT AT (202) 647-5225.  THE MOST RECENT CIS WAS 
ISSUED ON JANUARY 24, 1995.  NO TRAVEL ADVISORY IS IN 
EFFECT AS OF JULY 1995. 
 
- HOLIDAYS:  DATES OF ISLAMIC HOLIDAYS ARE DEPENDENT 
UPON LUNAR OBSERVATION.  THE EMBASSY OBSERVES MOST 
AMERICAN HOLIDAYS WHICH FALL ON A MONDAY IN THE U.S. 
ON THE PREVIOUS SATURDAY.  FOLLOWING ARE COMMERCIAL 
HOLIDAYS FOR 1995: 
 
JANUARY 1       NEW YEAR'S DAY 
JANUARY 12      PROPHET'S ASCENT TO HEAVEN /1 
JANUARY 14      MARTIN LUTHER KING'S BIRTHDAY /2 
FEBRUARY 18     PRESIDENTS' DAY /2 
MARCH 3         EID AL-FITR (3-5 DAYS) 
MAY 1           LABOR DAY (YEMENI) /1 
MAY 9           EID AL-ADHA (3-5 DAYS) 
MAY 22,         UNIFICATION 
MAY 27          MEMORIAL DAY (U.S.) /2 
JUNE 2          ISLAMIC NEW YEAR 
JULY 4          INDEPENDENCE DAY (U.S.) /2 
AUGUST 12       PROPHET'S BIRTHDAY 
SEPTEMBER 2     LABOR DAY (U.S.) /2 
SEPTEMBER 26    REVOLUTION DAY, NORTH 
OCTOBER 7       COLUMBUS DAY /2 
OCTOBER 14      REVOLUTION DAY, SOUTH /1 
NOVEMBER 11     VETERANS DAY (U.S.) /2 
NOVEMBER 25     THANKSGIVING DAY /2 
NOVEMBER 30     INDEPENDENCE DAY, SOUTH /1 
DECEMBER 25     CHRISTMAS DAY /2 
 
1 YEMENI GOVERNMENT CLOSED; U.S. EMBASSY MAINTAINS 
NORMAL HOURS. 
 
2 EMBASSY CLOSED; GOVERNMENT WORKS NORMAL HOURS. 
 
BUSINESS INFRASTRUCTURE:  THERE IS ADEQUATE 
TRANSPORTATION TO MAJOR BUSINESS CENTERS BY ROAD OR BY 
AIR.  ARABIC IS THE OFFICIAL LANGUAGE BUT MANY 
BUSINESSMEN AND GOVERNMENT OFFICIALS SPEAK ENGLISH. 
YEMEN HAS GOOD TELECOMMUNICATIONS, ALTHOUGH MOBILE 
PHONES HAVE BEEN INOPERABLE SINCE MAY 1994.  DO NOT 
MAKE INTERNATIONAL PHONE CALLS FROM HOTEL ROOMS IF 
THEY WILL BE BILLED AT THE OFFICIAL EXCHANGE RATE. 
 
EXPATRIATE-STYLE VILLAS HAVE BEEN OVERBUILT AND AS OF 
MID-1995 SANAA IS A RENTER'S MARKET.  MANY EXPATRIATE 
OFFICES ARE LOCATED IN VILLAS AND OFFICE BUILDINGS ARE 
BEING CONSTRUCTED.  ELECTRICITY AND WATER SUPPLIES ARE 
ERRATIC.  NOT ALL ROADS IN SANAA ARE PAVED. 
 
THERE ARE NO MEDICAL FACILITIES WHICH MEET U.S. 
STANDARDS AND POST STRONGLY RECOMMENDS MEDICAL 
INSURANCE WHICH WILL FLY YOU OUT OF YEMEN FOR 
EMERGENCY TREATMENT.  CAR ACCIDENTS ARE THE MAJOR 
HEALTH RISK.  THE ALTITUDE (OVER 7,000 FEET), DRYNESS 
AND DUST MAY BOTHER SOME VISITORS.  IN GENERAL THE 
CLIMATE IS EXTREMELY PLEASANT ALL YEAR, WARM DURING 
THE DAY AND COOL AT NIGHT.  MALARIA IS NOT A PROBLEM 
IN SANAA BUT IS PREVALENT AT LOWER ALTITUDES.  CHECK 
WITH A PHYSICIAN OR THE CENTER FOR DISEASE CONTROL IN 
ATLANTA FOR ADVICE ON IMMUNIZATIONS.  THERE ARE TWO 
RAINY SEASONS, IN ABOUT MARCH AND AUGUST. 
 
FOOD, BOTH LOCALLY PRODUCED AND IMPORTED, IS READILY 
AVAILABLE.  THE YEMENI CUISINE IS DISTINCTIVE AND 
FLAVORFUL.  AS IN ANY DEVELOPING COUNTRY, USE BOTTLED 
WATER, STERILIZE RAW VEGETABLES, AND MAKE SURE MEAT IS 
THOROUGHLY COOKED. 
 
 
 
                        CHAPTER X. APPENDICES 
 
A.  COUNTRY DATA 
 
POPULATION: 16 MILLION (12/94 CENSUS).  THERE ARE 
SEVERAL THOUSAND YEMENI-AMERICAN DUAL NATIONALS. 
 
POPULATION GROWTH RATE:  3.7 PERCENT (CENSUS). 
 
RELIGIONS:  99% MUSLIM, WITH SOME JEWISH, CHRISTIAN, 
HINDU. 
 
GOVERNMENT SYSTEM:  REPUBLIC. 
 
LANGUAGE:  ARABIC.  MANY BUSINESSMEN AND GOVERNMENT 
OFFICIALS SPEAK ENGLISH. 
 
WORK WEEK:  SATURDAY - THURSDAY MORNING.  THE U.S. 
EMBASSY IS OPEN SATURDAY - WEDNESDAY, 8:00 A.M. TO 
4:30 P.M. 
 
B.  DOMESTIC ECONOMY 
 
PUBLISHED DATA IS NOT CONSISTENT OR RELIABLE.  AN 
ESTIMATED 50-75 PERCENT OF YEMEN'S ECONOMIC ACTIVITY 
IS NOT OFFICIALLY RECORDED.  THE UNCERTAIN DATA AND 
RECENT ECONOMIC REFORMS MAKE PROJECTIONS MISLEADINGLY 
INACCURATE.  SOURCES OF DATA INCLUDE THE CENTRAL BANK 
OF YEMEN'S "FINANCIAL STATISTICS BULLETIN,"  THE 
CENTRAL STATISTICS ORGANIZATION'S "1993 STATISTICAL 
YEARBOOK," AND THE IMF.  OFFICIAL GDP FIGURES VASTLY 
UNDERSTATE THE ACTUAL LEVELS.  THE FIGURES BELOW ARE 
BASED ON THE SOURCES ABOVE PLUS CONVERSATIONS WITH 
OFFICIALS, BUSINESSMEN AND ECONOMISTS. 
 
UNEMPLOYMENT:  ABOUT 25-30 PERCENT 
 
                1992     1993      1994      1995 EST 
 
INFLATION        51       62        75       OVER 100 
(PERCENT) 
 
AVERAGE EXCHANGE 
RATE FOR 
U.S. DOLLAR       33       49        81      OVER 100 
 
DEBT SERVICE RATIO:  UNCLEAR.  YEMEN'S FOREIGN DEBT 
IS ESTIMATED AT USD 8-9 BILLION OF WHICH APPROXIMATELY 
70 PERCENT IS OWED TO THE FORMER SOVIET UNION (FSU). 
YEMEN IS NOT SERVICING DEBT TO THE FSU, KUWAIT, SAUDI 
ARABIA AND FRANCE.   THE UNRESOLVED ISSUE OF FSU DEBT 
DISTORTS YEMEN'S BALANCE OF PAYMENTS FIGURES.  WE 
UNDERSTAND THAT BILATERAL DISCUSSIONS ARE UNDERWAY. 
YEMEN IS CURRENT ON OFFICIAL DEBT TO THE U.S. 
 
U.S. ECONOMIC MILITARY ASSISTANCE:  THERE HAS BEEN 
NO U.S. MILITARY ASSISTANCE TO YEMEN SINCE THE GULF 
WAR AND EXPORTS OF U.S. MILITARY EQUIPMENT TO YEMEN 
ARE PROHIBITED. 
 
C.  TRADE (MILLIONS OF DOLLARS EXCEPT WHERE NOTED.) 
 
                1992     1993      1994      1995 
 
TOTAL EXPORTS     700      700        UP       UP 
TOTAL IMPORTS   2,900    2,900        UP       UP 
 
U.S. IMPORTS       46      110       199       UP 
 
U.S. EXPORTS      321      318       178       UP 
 
IN 1993 U.S. AND UNITED ARAB EMIRATES PROVIDED THE 
LARGEST SHARE OF YEMEN'S IMPORTS (9.6 PERCENT) 
FOLLOWED BY PRANCE AND SAUDI ARABIA WITH ABOUT 7 
PERCENT EACH.  FOR THE FIRST HALF OF 1994 THE U.S. 
SHARE WAS 9.3 PERCENT, EXCEEDED ONLY BY SAUDI ARABIA 
WITH 12 PERCENT.  AS NOTED PREVIOUSLY, APPROXIMATELY 
HALF OF YEMEN'S TRADE IS NOT RECORDED OFFICIALLY. 
 
D.  INVESTMENT STATISTICS:  NOT AVAILABLE. 
 
E.  U.S. AND YEMEN CONTACTS 
 
U.S. EMBASSY TRADE PERSONNEL 
 
DAVID G. NEWTON, AMBASSADOR 
ALLEN J. KEPCHAR, DEPUTY CHIEF OF MISSION 
GREGORY NICKS, ECONOMIC COMMERCIAL OFFICER 
JOHN FLAMING, COMMERCIAL OFFICER 
MOHAMED H. KHALEAL, ECONOMIC COMMERCIAL ASSISTANT 
BAKR A. AL-AKWA, AGRICULTURAL ANALYST 
P.O. BOX 22347, SANAA, REPUBLIC OF YEMEN 
PHONE: 967-1-238-843/52 
FAX: 967-1-251-563 
 
WASHINGTON-BASED U.S. GOVERNMENT COUNTRY CONTACTS 
 
DEPARTMENT OF STATE 
ROBERT DRY, YEMEN DESK OFFICER 
2100 C STREET, NW 
NEA/ARP, ROOM 4224, MAIN STATE 
WASHINGTON, D.C. 20520 
PHONE: (202) 647-6562 OR (202) 647-6571 
FAX: (202) 736-4439 
 
DEPARTMENT OF COMMERCE (DOC) 
14 AND CONSTITUTION AVENUE, NW 
WASHINGTON, D.C. 20007 
INTERNATIONAL TRADE 
ADMINISTRATION 
DAVID GUGLIEMI, YEMEN DESK OFFICER 
WASHINGTON, D.C. 20530 
PHONE: (202) 482-1860 
FAX: (202)482-0878 
THE MULTILATERAL BANK OFFICE (DOC) 
BRENDA EUABALONG, DIRECTOR 
PHONE: 202-482-3399 
FAX: 202-482-5179 
 
TPCC TRADE INFORMATION CENTER (DOG) 
PHONE: 1-800-USA-TRADE 
 
U.S. TRADE AND DEVELOPMENT AGENCY (TDA) 
JOHN RICHTER, REGIONAL DIRECTOR 
NATHAN YOUNGE 
SA-16, ROOM 309 
WASHINGTON, D.C. 20525-1602 
PHONE: (703) 875-4357 
FAX: (703) 875-4009 
 
OVERSEAS PRIVATE INVESTMENT CORPORATION (OPIC) 
JAMES C. WILLIAMS, INSURANCE OFFICER 
1100 NEW YORK AVENUE, NW 
WASHINGTON, D.C. 20527 
PHONE: (202) 336-8400 
FAX: (202) 408-9859 
 
EXPORT-IMPORT BANK OF THE UNITED STATES (EXIMBANK) 
KEN TINSLEY, VICE PRESIDENT 
811 VERMONT AVENUE, NW 
WASHINGTON, D.C. 20571 
PHONE: (202) 565-3946 OR (202) 566-8990 
FAX: (202) 565-3380 
 
U.S. DEPARTMENT OF AGRICULTURE (USDA) 
FOREIGN AGRICULTURAL SERVICE 
TRADE ASSISTANCE AND PROMOTION OFFICE 
PHONE: 202-720-7420 
 
COUNTRY TRADE ASSOCIATIONS 
 
AMERICAN BUSINESS ASSOCIATION 
BOB CARNAHAN, SECRETARY/TREASURER/VICE CHAIRMAN 
P.O. BOX 15060, SANAA, REPUBLIC OF YEMEN 
PHONE: 967-1-218-064 
FAX: 967-1-218-320 
 
SANAA CHAMBER OF COMMERCE AND INDUSTRY 
HAJ HUSSEIN ALWATARY, CHAIRMAN 
MR. ABDALLAH H. ROBAIDI, GENERAL MANAGER 
P.O. BOX 195, SANAA, REPUBLIC OF YEMEN 
PHONE: 967-1-234-761/2/3/4 
FAX: 967-1-232-412 
 
YEMEN GOVERNMENT AGENCIES 
 
REPUBLIC OF YEMEN EMBASSY 
H.E. MOHSIN AL-AINI, AMBASSADOR 
2600 VIRGINIA AVENUE, NW 
SUITE 705 
WASHINGTON, D.C. 20037 
PHONE: 202-965-4760 
 
MINISTRY OF OIL AND MINERAL RESOURCES (MOMR) 
H.E. MUHAMMAD SAID AL-ATTAR, MINISTER 
MR. MOHY. A. ALDHABBI, VICE MINISTER 
P.O. BOX 81, SANAA, REPUBLIC OF YEMEN 
PHONE: 957-2-202-309/11/12/13 
FAX: 967-1-202-314 
 
MINISTRY OF FISHERIES 
H.E. ABDUL RAHMAN ABDUL KADER BAFADEL, MINISTER 
P.O. BOX 19179, SANAA, REPUBLIC OF YEMEN 
PHONE: 967-1-268-580/4 
FAX: 967-1-268-288 
 
MINISTRY OF PLANNING AND DEVELOPMENT 
H.E. ABDUL-QADIR BAJAMAL, MINISTER 
DR. MUTAHAR ABDULLA AL-SA'IDI, VICE MINISTER 
P.O. BOX 175, SANAA, REPUBLIC OF YEMEN 
PHONE: 967-1-250-101 THRU 6 
FAX: 967-1-251-503 
 
MINISTRY OF INDUSTRY 
H.E. MUHAMMAD SAID AL-ATTAR, MINISTER 
MOHAMED AL-HAIMY, DEPUTY MINISTER 
P.O. BOX 1804, SANAA, REPUBLIC OF YEMEN 
PHONE: 967-1-202-770/202-769 
FAX: 967-1-202-249 
 
MINISTRY OF SUPPLY AND TRADE 
H.E. MOHAMMAD AHMED AFANDI, MINISTER 
DR. ABDUL MAJID ABDO SAIF AL-MEKHLAFI, VICE MINSTER 
P.O. BOX 1804, SANAA, REPUBLIC OF YEMEN 
PHONE: 967-1-252-471/9-252-340 
FAX: 967-1-251-557 
 
GENERAL INVESTMENT AUTHORITY 
MR. AHMED A. AL-ERYANI, CHIEF, PROMOTION SECTOR 
P.O. BOX 19022, SANAA, REPUBLIC OF YEMEN 
PHONE: 967-1-268-201/5 
FAX: 967-1-262-964 
 
COUNTRY COMMERCIAL BANKS 
(WITH SOME U.S. CORRESPONDENT BANKS) 
 
ARAB BANK (JORDANIAN) 
ABDUL KARIM AL-ZORAIQI, MANAGER 
P.O. BOX 1302, SANAA, REPUBLIC OF YEMEN 
TEL: 967-1-276-585/6/7 
FAX: 967-1-276-583 
 
BANK INDOSUEZ (FRENCH) 
MANUEL GARCIA-LIGERO, REGIONAL MANAGER 
P.O. BOX 651, SANAA, REPUBLIC OF YEMEN 
TEL: 967-1-272-801/2/3 
FAX: 967-1-274-161 
(MANY U.S. CORRESPONDENT RELATIONSHIPS) 
 
INTERNATIONAL BANK OF YEMEN 
AHMED THABET AL-ABSI, ACTING GENERAL MANAGER 
P.O. BOX 2847, SANAA, REPUBLIC OF YEMEN 
TEL: 272-920/1/2/3/4/ 
FAX: 967-1-274-127 
(BANK OF AMERICA, BANK OF NEW YORK) 
 
NATIONAL BANK OF YEMEN 
ABDUL QAWI AL-SAIEG, GENERAL MANAGER 
P.O. BOX 19839, SANAA, REPUBLIC OF YEMEN 
TEL: 967-1-275-373 
FAX: 967-1-273-311 
 
YEMEN KUWAIT BANK FOR TRADE AND INVESTMENT 
AHMED MUHAMMAD ALI, MANAGER 
P.O. BOX 987, SANAA, REPUBLIC OF YEMEN 
TEL: 967-1-209-538 
FAX: 967-1-206-148 
(AMERICAN EXPRESS, BANK OF NEW YORK) 
 
YEMEN BANK FOR RECONSTRUCTION AND DEVELOPMENT 
YEHYA ALDELAMI, GENERAL MANAGER 
P.O. BOX 541, SANAA, REPUBLIC OF YEMEN 
TEL: 967-1-274-171 
FAX: 967-1-271-684 
(CITIBANK, CHASE) 
 
YEMEN COMMERCIAL BANK 
DR. AHMED ALI AL-HAMDANI, MANAGING DIRECTOR 
P.O. BOX 19845, SANAA, REPUBLIC OF YEMEN 
TEL: 967-1-213-838 
FAX: 967-1-209-566 
(C 
ITIBANK AND OTHERS) 
 
MULTILATERAL DEVELOPMENT BANK OFFICE 
THE INTERNATIONAL BANK FOR RECONSTRUCTION AND 
DEVELOPMENT 
DR. OSMAN AHMED, RESIDENT REPRESENTATIVE 
14 DJIBOUTI STREET, SANAA, REPUBLIC OF YEMEN 
TEL: 967-1-413-526, 240-478 
FAX: 967-1-269-247 
 
F.  MARKET RESEARCH 
 
LIST OF 1995 COMMERCIAL REPORTS BY EMBASSY SANAA 
AVAILABLE ON THE NATIONAL TRADE DATA BASE (NTDB). 
 
SANAA 3122      THE MONEYCHANGERS: BACKBONE OF YEMEN'S 
FINANCIAL SYSTEM 
 
SANAA 2840      YEMEN'S 1995 BUDGET: WORTH WAITING FOR 
SANAA  935      YEMEN'S 1993 NATIONAL INCOME ACCOUNTS 
SANAA  865      YEMEN'S 1994 PUBLIC SECTOR BUDGET 
 
G.  LIST OF COMMERCIAL LAWS 
 
- LAW 27 OF 1982     CHAMBER OF COMMERCE AND INDUSTRY 
 
- LAW 22 OF 1991    INVESTMENT CODE /1 
(SUPERSEDES ALL OTHER LAWS REGARDING INVESTMENT.) 
 
- LAW 32 OF 1991    COMMERCIAL LAW 
 
- LAW 34 OF 1991    COMMERCIAL COMPANIES 
 
- MINISTERIAL LAW 49 OF 1992  GOVERNMENT TENDERS 
 
- LAW 36 OF 1992    ESTABLISHMENT OF FOREIGN COMPANIES 
IN YEMEN 
 
- LAW 4 OF 1993     CONCERNING THE YEMEN FREE ZONES /1 
 
- LAW 19 OF 1994    INTELLECTUAL PROPERTY RIGHTS 
 
- LAW 5 OF 1995     LABOR LAW
 
/1 AVAILABLE IN ENGLISH