Israeli strikes on Yemen highlight critical role of Hodeidah port


Ismaeel Naar
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Nestled on Yemen’s Red Sea coast, Hodeidah is more than merely a gateway for goods.

The port, which was heavily bombed and put out of action on Saturday by Israeli air strikes, has been a lifeline for a country grappling with war, economic turmoil and one of the world's most severe humanitarian crises.

As Yemen's principal port, Hodeidah has been crucial for the survival of millions of citizens, making it a focal point of humanitarian efforts and military conflict.

Even before the war, it handled most imports in a country where 90 per cent of food had to be imported. But after Hodeidah was taken over by Iran-backed Houthi militias, Yemen's internationally recognised government has long accused the rebel movement of controlling the distribution of supplies from the port, deciding who benefits from foreign aid.

A major element of contention in the Yemeni conflict has been the restrictions on the import of fuel and humanitarian goods into Yemen, where millions of people are on the brink of famine.

Israeli warplanes killed three people in the Houthi-controlled Yemeni port of Hodeidah on Saturday, following the group's fatal drone attack in Tel Aviv. The strikes on the vital port, which triggered a raging fire and plumes of black smoke, were the first by Israel in Yemen, about 2,000km away.

Yemen’s economic lifeline

Its strategic importance is underscored by its location on key maritime routes connecting Europe, the Middle East and Asia. Control of the port translates into significant influence over the Red Sea's maritime traffic, impacting global shipping routes. For Yemen, Hodeidah is a vital entry point for goods essential to both the local economy and regional trade.

Economically, Hodeidah has also underpinned much of Yemen’s commercial activity. The port generates substantial revenue through tariffs and customs duty, critical for the country's fragile financial state.

These inflows have historically supported government functions and public services, essential for maintaining a semblance of stability in a nation torn by conflict.

Workers load a lorry with sacks of food supplies at the Red Sea port of Hodeidah in western Yemen. AFP
Workers load a lorry with sacks of food supplies at the Red Sea port of Hodeidah in western Yemen. AFP

Who has control?

Since the Yemeni Civil War erupted in 2015, control of Hodeidah port has been fiercely contested. Currently, it is under the control of Houthi rebels, who seized it from internationally recognised Yemeni government forces early in the conflict.

This has provided the Houthis with significant leverage, allowing them to regulate the flow of goods and resources into Yemen.

Both the ports of Hodeidah and Salif on the Red Sea are controlled by the Iran-backed Houthis.

The Saudi-led coalition has said the Houthis use the ports as launching points for military operations. A peace deal was signed by Yemen's warring sides in Stockholm in 2018, aiming to keep the ports operational. However, air and sea access to Houthi-held areas is controlled by the coalition, which intervened at the request of the government in 2015 after it was ousted by the rebels.

Yemeni pro-government forces advance towards Hodeidah, controlled by Houthi rebels, during a battle for control of the city. AFP
Yemeni pro-government forces advance towards Hodeidah, controlled by Houthi rebels, during a battle for control of the city. AFP

The port has been attacked numerous times, causing significant damage and disruption to operations, destroying infrastructure and delaying the delivery of much-needed aid and commercial goods, exacerbating the humanitarian crisis in Yemen.

Early last month, US and UK forces carried out joint air strikes on Hodeidah's airport and another attack was launched on the seaport of Salif to the north, in retaliation for the Houthis' targeting of shipping vessels in the Red Sea.

The rebels first threatened to attack Israeli ships in October. The following month, the group seized control of a Japanese-operated ship near Hodeidah, holding crew members hostage.

UN presence

The UN has had a significant presence in Hodeidah, primarily focused on monitoring and facilitating peace agreements and providing humanitarian assistance.

Established in December 2018 by the Security Council, the UN Mission to Support the Hodeidah Agreement (UNMHA) was created to support the wider Stockholm Agreement between the Yemeni government and Houthi rebels.

Martin Griffiths speaks to the media in Hodeidah, when he was UN envoy to Yemen in 2018. Reuters
Martin Griffiths speaks to the media in Hodeidah, when he was UN envoy to Yemen in 2018. Reuters

Various UN agencies operate in Hodeidah to address the dire humanitarian needs exacerbated by the conflict.

Key agencies involved include the World Food Programme, Unicef, the World Health Organisation, the UN High Commissioner for Refugees, and the Office for the Co-ordination of Humanitarian Affairs.

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Ten tax points to be aware of in 2026

1. Domestic VAT refund amendments: request your refund within five years

If a business does not apply for the refund on time, they lose their credit.

2. E-invoicing in the UAE

Businesses should continue preparing for the implementation of e-invoicing in the UAE, with 2026 a preparation and transition period ahead of phased mandatory adoption. 

3. More tax audits

Tax authorities are increasingly using data already available across multiple filings to identify audit risks. 

4. More beneficial VAT and excise tax penalty regime

Tax disputes are expected to become more frequent and more structured, with clearer administrative objection and appeal processes. The UAE has adopted a new penalty regime for VAT and excise disputes, which now mirrors the penalty regime for corporate tax.

5. Greater emphasis on statutory audit

There is a greater need for the accuracy of financial statements. The International Financial Reporting Standards standards need to be strictly adhered to and, as a result, the quality of the audits will need to increase.

6. Further transfer pricing enforcement

Transfer pricing enforcement, which refers to the practice of establishing prices for internal transactions between related entities, is expected to broaden in scope. The UAE will shortly open the possibility to negotiate advance pricing agreements, or essentially rulings for transfer pricing purposes. 

7. Limited time periods for audits

Recent amendments also introduce a default five-year limitation period for tax audits and assessments, subject to specific statutory exceptions. While the standard audit and assessment period is five years, this may be extended to up to 15 years in cases involving fraud or tax evasion. 

8. Pillar 2 implementation 

Many multinational groups will begin to feel the practical effect of the Domestic Minimum Top-Up Tax (DMTT), the UAE's implementation of the OECD’s global minimum tax under Pillar 2. While the rules apply for financial years starting on or after January 1, 2025, it is 2026 that marks the transition to an operational phase.

9. Reduced compliance obligations for imported goods and services

Businesses that apply the reverse-charge mechanism for VAT purposes in the UAE may benefit from reduced compliance obligations. 

10. Substance and CbC reporting focus

Tax authorities are expected to continue strengthening the enforcement of economic substance and Country-by-Country (CbC) reporting frameworks. In the UAE, these regimes are increasingly being used as risk-assessment tools, providing tax authorities with a comprehensive view of multinational groups’ global footprints and enabling them to assess whether profits are aligned with real economic activity. 

Contributed by Thomas Vanhee and Hend Rashwan, Aurifer

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"It’s trite these days to say that any country punches above its weight, but in every possible way the Emirates did, both militarily, and very importantly, the UAE was extraordinarily helpful on getting to the issue of violent extremism," he said.

He also noted the impact that Hedayah, among others in the UAE, has played in addressing violent extremism.

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Who's who in Yemen conflict

Houthis: Iran-backed rebels who occupy Sanaa and run unrecognised government

Yemeni government: Exiled government in Aden led by eight-member Presidential Leadership Council

Southern Transitional Council: Faction in Yemeni government that seeks autonomy for the south

Habrish 'rebels': Tribal-backed forces feuding with STC over control of oil in government territory

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A timeline of the Historical Dictionary of the Arabic Language
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Profile Periscope Media

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How to apply for a drone permit
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