By Faisal Abu Bakr | 2025-02-27

ADEN -- The Houthis have systematically seized control of Yemen's multibillion-dollar expatriate remittance network, establishing a web of front companies across the Horn of Africa to fund military operations, experts said.

The Iran-backed group's exploitation of diaspora communities takes a leaf directly out of fellow "axis of resistance" member Lebanese Hizbullah's playbook.

According to World Bank data, personal remittances from Yemeni expatriates exceeded $3.7 billion in 2023.

The Houthis control these vital cash flows through manipulated exchange rates and forced use of affiliated companies, operating similarly to other Iran-backed groups in the region, political analyst Mahmoud al-Taher told Al-Fassel.

When sanctions target Houthi-affiliated businesses, the group simply establishes new companies under the names of relatives or other militiamen to maintain operations, he said.

Criminal enterprise

The Houthis have created more than 1,000 commercial entities using forged documents and fictitious owners to bypass anti-money laundering and counter-terrorism financing measures, economist Abdulaziz Thabit told Al-Fassel.

Through the so-called "payments committee," an economic body they created in 2018, the Houthis artificially depress exchange rates for the Yemeni riyal, enabling affiliated companies to obtain foreign currency at below-market prices.

Exchange companies now pay remittances from expatriates in Saudi riyals at reduced rates, rather than in US dollars, Thabit said.

The Houthis' financial control intensified after the group's 2021 terrorist designation, when foreign banks limited their engagements with Yemeni entities.

This forced expatriates to rely on Houthi-controlled exchanges that facilitate the group's money laundering and weapons purchases, Thabit said.

The Houthis have built extensive networks among Yemeni communities in Africa, including Djibouti, Somalia and Kenya, economist Faris al-Najjar told Al-Fassel.

They have done this by exploiting family connections and commercial relationships to establish import-export operations as fronts, he said.

These Africa-based companies serve as conduits for moving money and weapons through regional ports.

Hidden ownership

Maritime routes through Horn of Africa ports have become crucial corridors for the Houthis' financial and weapons transfers, al-Najjar said.

Companies facilitate various illicit activities, including Iranian oil smuggling and solid fuel imports for ballistic missiles, while maintaining control over institutional revenues and expatriate remittances, al-Taher said.

The Houthis compel banks to process transactions through these shell companies, concealing true ownership and trading partners.

Most newly established Houthi front companies are registered under the names of individuals with no trading experience or legitimate business background, Thabit said.

Every three months, he added, the Houthis collect mandatory payments from expatriate families in the areas they control, with those refusing facing harassment.

The systematic exploitation of diaspora networks mirrors Hizbullah's tactics in Lebanon, where expatriate communities face pressure to facilitate financial operations through coercion and incentives, al-Najjar said.