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Cablegate: Cote D'ivoire 2008 Investment Climate Statement

VZCZCXRO3843
RR RUEHMA RUEHPA
DE RUEHAB #0036/01 0161418
ZNR UUUUU ZZH
R 161418Z JAN 08
FM AMEMBASSY ABIDJAN
TO RUEHC/SECSTATE WASHDC 3901
INFO RUEATRS/DEPT OF TREASURY WASH DC
RUCPDOC/USDOC WASHDC
RUCPCIM/CIMS NTDB WASHDC
RUEHZK/ECOWAS COLLECTIVE

UNCLAS SECTION 01 OF 08 ABIDJAN 000036

SIPDIS

SIPDIS

STATE PASS TO USTR
STATE FOR EB/IFD/OIA and AF/W


E.O. 12958: N/A
TAGS: OPIC USTR KTDB ECON ETRD
SUBJECT: COTE D'IVOIRE 2008 INVESTMENT CLIMATE STATEMENT

REF: SECSTATE 158802

1. OPENNESS TO FOREIGN INVESTMENT
Despite the ongoing political/economic crisis, the Ivorian
government actively encourages foreign investment through mergers,
acquisitions, joint ventures, takeovers, or startups. There are no
significant limits on foreign investment nor are there generally
differences in treatment of foreign and national investors, either
in terms of the level of foreign ownership or sector of investment.
The government does not screen investments and has no overall
economic and industrial strategy that discriminates against
foreign-owned firms. The investment code was designed to boost
private sector investment and increase national production. The code
includes incentives, such as tax breaks, for larger investments and
for investments outside of Abidjan and other urban industrial areas.
There is also a Petroleum Investment Code and a Mining Investment
Code, which were revised to encourage foreign investment in these
sectors by making investments in them eligible for exemption from
income tax and other taxes, and exemption from the value added tax
on equipment, materials and the first consignment of spare parts,
except when there are equivalent products either made in Cote
d'Ivoire or available in country at similar cost.
As part of the 2006 new tax schedule, the GOCI introduced, on August
26, 2006, fiscal measures to reduce company tax burden and stimulate
economic activity. These measures include:
-- The reduction of the corporate income tax from 35 to 27 percent,
effective December 31, 2006
-- The awarding of three-year corporate income tax exemption and
free tax registration for the relocation of companies that left the
country as a result of the crisis.
Cote d'Ivoire has an investment promotion center called CEPICI,
(Centre des Promotion des Investissesments en Cote d'Ivoire located
at www.cepci.net), which provides investment information and
assistance for entrepreneurs interested in starting a business or
foreign enterprises interested in investing in Cote d'Ivoire. CEPICI
provides a "one-stop-shop" for investors, an outreach program to
match opportunities with potential investors, and a public-private
liaison program. CEPICI also maintains a file of projects seeking
foreign investment.
Foreign companies are free to invest and list on the regional stock
exchange (BRVM), which is based in Abidjan and is dominated by
Ivorian and French companies. With the inception of the regional
exchange, the West African Economic and Monetary Union (WAEMU)
members established the Regional Council for Savings and Investment,
a regional securities regulatory body.
In past privatizations, such as for management of the Port of
Abidjan and for management of the electric and water companies,
well-entrenched French companies with extensive histories in Africa
won, which led to allegations of corruption on the part of losing
investors. Bids are not always made public, the government sometimes
simply chooses from among companies that have proactively contacted
it about an investment opportunity rather than proceeding through a
public bid process.
The government does not use tax, labor, environment, or health and
safety laws to impede or distort investment. Well-entrenched foreign
companies historically have formed relationships with GOCI
officials, which frequently influence the awarding of tenders. There
is no sector, however, where American investors have been formally
refused the same treatment as other foreign investors.
There are some limitations on foreign investment worth noting. As a
means to monitor foreign exchange flows, for example, the external
finance and credit office of the Finance Ministry must approve
investments from outside the West African Franc (FCFA) zone. Despite
regulations designed to control land speculation, in urban areas,
foreigners own significant amounts of land. Free-hold tenure outside
of urban areas, despite land reform, is difficult and most
businesses, including agribusinesses and forestry companies, opt for
long-term leases.
There are sizable U.S. investments in offshore gas and oil
exploration and production, petroleum product distribution, cocoa
and coffee processing and shipping, as well as a more modest
investment in banking. The petroleum sector will continue to grow in
2008, despite the global shortage of exploratory rigs. There is a
need for oil-servicing companies, oil exploration equipment and for
experienced ex-patriot engineers and rig managers.
The oil and gas sector has particularly grown, supported by the
development of new offshore oil fields, a rising production and high
oil prices. Oil has become Cote d'Ivoire's leading export product,
outpacing traditional leader cocoa. Another area of commercial
success is cellular phone service, which has seen the entry of a
fourth mobile operator in June 2007 and a fifth operator has been
announced; each company is largely financed by foreign capital.
The cocoa sector still remains significant to the economy. It
contributes up to 40 percent of export revenues and 20 percent of
government fiscal revenues. Because of this sector's critical
importance to the Ivorian economy, the government has expressed

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concern that foreign companies not dominate it. Although the
government has liberalized the market, it de facto limits the amount
of cocoa that large foreign exporters can purchase and process to
approximately 23% of the total harvest via a prohibition of foreign
companies approaching farmers outside of either government-licensed
middlemen or co-operatives. The Ivorian government has also
established several private and public control agencies to regulate
the industry. After two years of disruptive strikes, in the fall of
2004, the Ivorian President established a "Blue Ribbon Commission"
to review the coffee and cocoa sectors and recommend accelerated
reforms. The commission's report, which was provided in May 2005,
has still not yet been made public. In October 2007, in response to
several public accusations of widespread malfeasance in the cocoa
sector, Ivorian President ordered the public prosecutor to
investigate the allegations, particularly those concerning
embezzlement. The World Bank and IMF have continued their focus on
the cocoa sector as a key economic bellwether and are pressing the
Ivorian government commit to a package of specific reforms in this
sector.
The World Bank, IMF and the African Development Bank resumed their
financial operations and lending in Cote d'Ivoire in mid-2007 after
an accord was reached with the government to pay a negotiated
percentage of its outstanding arrears to the WB and AfDB. As a
consequence of the agreement, the WB and IMF provided an immediate
post-conflict assistance package and emergency budget support in an
effort to assist the country cope with the financial demands
associated with the process of ending the five-year long civil
conflict.
2. CONVERSION AND TRANSFER POLICIES
Cote d'Ivoire is a member of the West African Economic and Monetary
Union (WAEMU), which uses the Franc CFA (FCFA), a convertible
currency. The French Central Bank continues to hold the
international reserves of WAMEU member states and maintains a fixed
rate of 655.956 CFA to the Euro.
The WAEMU has unified foreign exchange regulations. Under these
regulations, there are no restrictions for transfers within the
community and designated commercial banks are able to approve
routine foreign exchange transactions inside the community. The
transfer abroad of the proceeds of liquidation of foreign direct
investments no longer requires prior government approval.
Despite the ability to freely transfer funds within the WAEMU zone,
when Ivorians and expatriate residents are traveling from Cote
d'Ivoire to another WAEMU country, they must declare the amount of
currency being carried out of the country. When traveling from Cote
d'Ivoire to a destination other than another WAEMU country, Ivorians
and expatriate residents are prohibited from carrying an amount of
currency greater than equivalent of two million CFA francs
(approximately $4,000). Larger amounts of require the approval of
the Ministry of Finance, and must be in travelers or bank checks.
The Government must grant prior permission for investments coming
into the WAEMU zone from outside and routinely does so. Once an
investment is established and documented, the Government regularly
approves remittances of dividends and/or repatriation of capital.
The same holds true for requests for other sorts of transactions --
e.g., imports, licenses, and royalty fees.
Multi-national firms in Cote d'Ivoire have complained that temporary
liquidity shortfalls sometimes occur in the banking system. These
problems are particularly of concern during the main cocoa harvest
when companies are trying to transfer large sums of money in and out
as cocoa is purchased and exported. Companies continue to complain
that the Government is slow in approving currency conversions.
3. EXPROPRIATION AND COMPENSATION
Cote d'Ivoire's public expropriation law includes compensation
provisions similar to those in the United States. Historically,
expropriation has not been an issue in Cote d'Ivoire and the Embassy
is not aware of any cases of government expropriation of private
property.
Private expropriation as a means to force settlement of contractual
or investment disputes has continued to be a problem, particularly
for American investors in recent years. Investors should be aware
that local individuals or local companies using what appear to be
spurious court decisions have challenged the ownership of some
foreign companies in recent years. On occasion the Government has
blocked the bank accounts of U.S. and other foreign companies
because of ownership and tax disputes. Corruption in the judicial
system and security services has resulted in poor enforcement of
private property rights, even in the sensitive cocoa sector,
particularly when the expropriated entity is foreign held and the
expropriator is Ivorian or is a long-term French or Lebanese
resident.

4. DISPUTE SETTLEMENT
The judicial system is dysfunctional and in need of reform.
Enforcement of contract rights is often time-consuming and expensive
as court cases move slowly. Judges sometimes fail to base their
decisions on the legal or contractual merits of the case and tend to

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rule against foreign investors in favor of entrenched interests. In
addition, cases are often endlessly postponed and appealed again and
again, moving from court to court, in some cases for decades. It is
widely believed that magistrates are sometimes subject to political
or financial influence. As a partial defense, some investors
stipulate in contracts that disputes must be settled through
international commercial arbitration. However, even if stipulated
in the contract, decisions reached through international
arbitration, and even through arbitration in the African regional
arbitration body, are sometimes not honored by local courts.
Given that the average time from filing to resolution of a contract
dispute is eight years, in 1999, the Government established an
arbitration tribunal for businesses to settle commercial disputes
without going to court. The arbitration court is supposed to provide
alternative modes of conflict resolution including arbitration,
conciliation, mediation and expertise.
In July 2004, the business community welcomed the expansion of the
arbitration tribunal's mandate to include participation of local
chambers of commerce. The business community was also pleased at the
Board's ability to more quickly enforce awards. However, use of the
Board, in lieu of the court system, has been limited: in the past
seven years the Arbitration Board has heard only 51cases (10 in
2006). In addition to its local arbitration board, Cote d'Ivoire is
a member of the International Center for the Settlement of
Investment Disputes. There is also the Abidjan-based, regional Joint
Court of Justice and Arbitration as an alternative means of solving
contractual disputes.
There is political consensus on the need to reform the judicial
system. However, in 2007, the Ivorian government remained
preoccupied with the ongoing political crisis and judicial reform,
like many other legislative initiatives, remained on the back
burner. Reform efforts are likely to continue to languish until
after the next presidential elections, tentatively scheduled for
June 2008. Under the pending reform plans, the GOCI would dismantle
the Supreme Court, and divide its authority among several
independent institutions. The current Judicial Chamber of the
Supreme Court would become the High Appeals Court (Cour de
Cassation). It would handle civil, penal, social, and labor cases
when it deems that a lower court did not adequately apply the law.
The current Administrative Chamber of the Supreme Court would become
the Council of State (Conseil d'Etat), which would hear cases
involving the State or public authorities or cases against the
Government. The current Account Chamber of the Supreme Court will
become a separate and independent Account Court (Cour de Comptes),
examining the accounts of the State and of local government, and
hearing financial cases.
Further reform plans call for deciding more cases by three-judge
panels, instead of by a single judge; publishing decisions more
quickly; enhancing computerization in the court system; training
judges in commercial law; and increasing the number of appeals
courts to reduce the backlog of commercial cases.
Cote d'Ivoire has both commercial and bankruptcy laws that address
liquidation of business liabilities. The Uniform Acts for the
Organization and Harmonization of Business Law (OHADA) is a
collection of uniform laws on bankruptcy, debt collections, and the
rues governing business transactions. The OHADA permts three
different types of bankruptcy liquidation: an ordered suspension of
payment to permit a ngotiated settlement, an ordered suspension of
pament to permit restructuring of the company, similr to Chapter
11, and the complete liquidation ofassets, similar to Chapter 7.
Creditors' rights, irrespective of nationality, are protected
equall by the Act. Monetary judgments devolving from a bnkruptcy
are usually paid out in local currency.
5. PERFORMANCE REQUIREMENTS AND INCENTIVES
Coe d'Ivoire does not maintain any regulations inconsistent with
WTO Trade-Related Investment Measures(TRIMS). There are no general
performance requirements applied to investments, nor does the
Government or the investment authority generally place conditions on
location, local content, equity ownership, import substitution,
export requirements, host country employment, technology transfer,
or local financing. Cellular telephone operating companies must meet
technology and performance requirements to maintain their licenses.
The Investment Code, the Petroleum Code, and the Mining Code define
the incentives available to new investors in Cote d'Ivoire (see
section A.1. above).

6. RIGHT TO PRIVATE OWNERSHIP AND ESTABLISHMENT
Foreign investors generally have access to all forms of remunerative
activity on terms equal to the terms enjoyed by Ivorians. The
government encourages foreign investment in the privatization of
state-owned and parastatal firms, though in most cases the state
reserves an equity stake in the new company.
Under its previous IMF Poverty Reduction and Growth Facility, the
government committed to privatizing 30 parastatal enterprises by the
end of 2003. While some privatizations occurred, the government has
yet to sell the majority of its shares in a major local bank, a

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cotton company, and sugar company, and its remaining shares in the
telecommunications company. Plans to complete these privatizations
are likely to remain on hold until after elections.
In January 2005, the Council of Ministers approved measures to
liberalize the telecommunications sector, which had been postponed
since February 2004. The legislation remains blocked by the fact
that the National Assembly's mandate ended in 2005, however, and it
is unlikely to be passed into law until a new National Assembly can
be constituted with new elections. For the time being, the Ivorian
regulatory agency continues to function under the authority granted
to it by the 1995 telecommunications code. The new rules, as
drafted, will end France Telecom's fixed-line monopoly through its
subsidiary, Cote d'Ivoire Telecom. A new regulatory agency would
also be created to manage the fully competitive market.
Banks and insurance companies are subject to licensing requirements,
but there are no restrictions aimed at limiting foreign ownership or
the establishment of subsidiaries of foreign companies in this
sector. There are no restrictions on foreign investment in computer
services, or education and training services. However, there are
restrictions on foreign investment in the health sector, law and
accounting firms, and travel agencies. Investments in these sectors
are subject to prior approval, require association with an Ivorian
partner(s), and appropriate licenses. Foreign companies operate
successfully in all these service sectors.
7. PROTECTION OF PROPERTY RIGHTS
The Ivorian Civil Code protects the acquisition and disposition of
intellectual property rights. Legal protection for intellectual
property may fall short of TRIPS standards due to uneven law
enforcement and the lack of custom checks in porous borders, which
do not allow law enforcement action on trade of counterfeit products
in the textile, pharmaceutical and vehicle parts areas. Cote
d'Ivoire is a party to the Paris Convention, its 1958 revision, and
the 1977 Bangui Agreement covering 16 Francophone African countries
in the African Intellectual Property Organization (OAPI), which has
been TRIPS compliant since 2002. Under OAPI, rights registered in
one member country are valid for other member states. Patents are
valid for ten years, with the possibility of two five-year
extensions. Trademarks are valid for ten years and are renewable
indefinitely. Copyrights are valid for 50 years.
In 2001, Ivorian experts drafted a new law in an effort to bring
Cote d'Ivoire into conformity with TRIPS. The new law adds specific
protection for computer programs, databases, and extension of
author's rights with regard to rented films and videos. However, the
National Assembly has not yet approved this legislation, and the
legislation will not be approved until a new National Assembly is
convened.
The government's Office of Industrial Property (OIPI) is charged
with ensuring the protection of patents, trademarks, industrial
designs, and commercial names. The office faces many challenges,
including insufficient resources political will and the distraction
of the ongoing political crisis. As a result, enforcement of IPR is
largely ineffective. Foreign companies, especially from East and
South Asia, flood the Ivorian market with all types of counterfeit
goods. Despite enforcement difficulties, the government is working
to strengthen IPR protection. In 2007, the Ministry of Industry,
through the OIPI, issued a draft bill on protection of IPR at the
border to provide legal provisions for addressing counterfeiting.
The new bill would prohibit the entry and exit of goods infringing
IPR by Customs. This will allow customs to detain the import and
export of goods suspected of infringement, to investigate on the
status of infringement of goods etc. Further, Cote d'Ivoire's law on
mandatory registration of commercial names came into effect in
February 2006.
The Ivoirian Office of Author's Rights (BURIDA) put into effect a
new sticker system in January 2004 to prevent counterfeiting and
protect audio, video, literary and artistic property rights in music
and computer programs. BURIDA's operations remain hampered by a
long-running dispute between the management and the board over
policy and leadership issues. To resolve the crisis at BURIDA, on
March 15, 2006 the Minister of Culture took a ministerial bylaw to
establish a temporary administration and a commission to study and
propose a global reform of this organization. Since its
establishment, the new administration has boosted its fight against
audiovisual piracy including raids against retail outlets and street
vendors of pirated CDs and DVDs and instituted legal proceedings
against persons involved in fraudulent copying of audiovisual
materials. Additionally, in 2007 BURIDA brokered an accord with the
Ivorian music industry to reduce prices on locally produced CDs by
66 percent in an innovative effort to undercut IPR piracy. BURIDA
runs regular programs promoting IPR enforcement with lawyers and
magistrates.
Outside of urban areas, private individuals or entities usually
cannot obtain freehold tenure because the traditional property
rights of villages and ethnic groups prevent the land from being
sold. In urban areas where land is not held as a "tenancy in common"
by a tribal or village head but is considered to be owned

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individually, it can still be difficult to obtain a free-hold deed
to a property even years after a closing. For that reason, most
individuals and business tend to sign long-term leases. Although the
legal system recognizes the right to contract for leaseholds in both
urban and rural areas, there is not a clear understanding by
traditional tribal land-owners of property rights. This complicates
the enforcement of property rights in rural areas. In addition,
because free-hold tenure by individuals is not generally permitted
in rural areas, would-be borrowers often have difficulty using real
estate as collateral for loans. Even in urban settings, in general,
the mortgage market is not well developed. As part of the
legislative reforms mandated by the Linas-Marcoussis Peace
agreement, in July 2004 the National Assembly adopted amendments to
the law on rural-land ownership. This new law provides very limited
free-hold ownership for rural lands, which had been traditionally
held as a tenancy in common by villages. Rights are only protected,
however, if the owner can document proof of ownership through an
assignment deed or purchase contract.
8. TRANSPARENCY OF REGULATORY SYSTEM
The Government has taken some steps toward encouraging a more
transparent and competitive economic environment. In addition, the
IMF, World Bank, European Union, and other large donors have pushed
the Government to take further steps towards reforms by placing
conditions on future loans and grants. A centralized office of
public bids in the Finance Ministry was designed to ensure
compliance with international bidding practices by providing a
neutral body to make bidding decisions in a transparent and
objective fashion based on clear criteria. In 2005, the Ministry of
Finance introduced institutional changes in the new public
procurement code. They are:
--The decentralization of operational functions to make ministerial
departments, local governments and other government structures
accountable for the management of public resources
--The creation of consultative public procurement commissions in
charge of examining extraordinary decisions
--The reinforcement of public procurement coordination through new
regulations, training, procedural controls and more open and
transparent communication with the interested public
--The establishment of an appeals mechanism
--The reinforcement of auditing in the public procurement process
In addition to the office of public bids, there is also an Inspector
General's office and regulatory bodies for the liberalized
electricity and telecommunications sectors. Customs and other
officials can be obstructive for all businesses operating in Cote
d'Ivoire.
In 1999, under pressure from the Bretton Woods institutions, the
GOCI dissolved the cocoa and coffee marketing board and replaced it
with a supposedly more market-oriented system regulated by several
private and public institutions with producer, industry, and
government representation. The results of the sector's
liberalization are decidedly mixed. The new agencies tasked with the
control and regulation of the sector have worked neither efficiently
nor transparently and have become the subject of controversy
regarding their fiduciary mismanagement. In the fall of 2004, the
President bowed to pressure from the international community and the
planters, and created a steering committee to review the coffee and
cocoa sectors and recommend reforms. The Committee submitted its
report to the President in 2005, but the results have not been made
public. The World Bank and IMF are pressuring the government to
institute further reforms to bring greater transparency to the
sector.
The Finance Ministry has been known to change tax regimes overnight
via ministerial decree, rather than working through the Council of
Ministers and the National Assembly. The government sometimes levies
large tax bills, which companies say have little basis in law or
standard accounting practices. It then negotiates a lower bill with
the company.

9. EFFICIENT CAPITAL MARKETS AND PORTFOLIO INVESTMENT
Cote d'Ivoire commercial banking sector is sound, despite the
closure of 50 bank branches in the Northern, Center and Western
zones following the 2002 coup attempt that turned into an armed
rebellion that effectively split the country in half (banks are
slowly reopening in these regions).
Due to the financial risk associated with long-term loans because of
the ongoing political/economic crisis, banks have shifted their
emphasis to lending to the public sector, to the detriment of small
and medium size enterprises. Banks continue to offer short-term
loans, and generally make lending and investment decisions on
business criteria. Portfolio investment is emerging. Government and
private bond issuances are available for purchase by individuals or
companies. The Regional Council for Savings Investments and
regulates the WAEMU securities exchanges market. Government policies
generally encourage the free flow of capital. Aside from
restrictions previously listed, there are no private sector or
government efforts to restrict foreign investment, participation, or

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control of local industry. Credit for business expansion is
difficult to obtain. The government relinquished its interest in
smaller banks and retains only a small minority share in several
large banks and outright ownership of one medium sized bank (BNI).
At the end of 2006, total assets of the 18 banks and two credit
institutions were FCFA 2.2 trillion (about USD 4.9 billion), an
increase of 10.5 percent from 2005 figures.
Ivorian accounting systems are well developed and approach
international norms. A WAEMU-wide accounting system, under which all
member countries follow the same accounting rules, is firmly in
place.
The FCFA exchange rate is pegged to the Euro at 655.957 FCFA to one
Euro. As a consequence, the FCFA/USD rate fluctuates freely with the
Euro/USD rate.
There is no evidence of "cross shareholding" and "stable
shareholders" to restrict foreign investment through mergers and
acquisitions in Cote d'Ivoire.
10. POLITICAL VIOLENCE
Politically motivated demonstrations and strikes by workers' unions
in the health, education, transport, and cocoa sectors have occurred
and could continue to be potential sources of civil disturbance in
2008. None of the protests have been directed against American or
foreign businesses.
The after effects of the political violence in November 2004 are
still being felt. Many of the more than 9,000 foreign nationals who
fled have not returned, and many of the businesses that were
destroyed by street mobs have not reopened. The Ivorian government
has not made good on its promise to compensate victims of the
violence. Businesses that remain are installing additional security
measures to protect their property and staff.
11. CORRUPTION
Cote d'Ivoire signed the UN Anti-corruption Convention on December
10, 2003 but has not yet ratified it. The country is not a signatory
to the OECD Convention on Combating Bribery. There are domestic laws
and regulations to combat corruption but they are neither generally
nor effectively enforced. Penalties can range from incarceration to
payment of civil fines. State employees can be convicted of either
passive or active corruption or bribery in the performance of their
duties. The law also punishes state employees who receive directly
or indirectly benefit from private or parastatal companies related
to contracts, markets or financial payment under their purview.
Managers of companies who are complicit in the corrupting act are
treated as accomplices.
Racketeering by security and defense forces is often denounced in
the media and constantly receives wide attention from the
authorities and the population. In 2005, security forces and police
officials launched media advertisements to stop corruption. The ads
entitled "that's enough" focused on citizens as the corrupters.
There was a loud outcry from civil society and the ads were quickly
pulled off the air. Sporadic unrest in the country has led to an
increase in the number of police, military and gendarme checkpoints
on the roads, and consequently an increase in the solicitation of
bribes at these checkpoints. Transport companies have been
particularly hard hit. Trucks moving cargo from the western
agricultural belt to Abidjan and between Abidjan and the
rebel-controlled Northern region range pay a total of $100 to $400
at the various checkpoints they must pass through, depending on the
cargo. There are several governmental entities in charge of fighting
corruption: the General Secretariat in charge of good governance,
including the Board of State General Inspectors, and the Finance
Ministry's Inspector General's Office. None have been effective in
stamping out this growing problem. Neither Transparency
International, nor any regional or local non-governmental "watchdog"
organization operates in Cote d'Ivoire.
Many U.S. companies view corruption as a major obstacle to
investment in Cote d'Ivoire. Corruption has the greatest impact on
judicial proceedings, contract awards, customs, and tax issues. It
is common for judges to base their decisions on financial influence.
Corruption and the ongoing political/economic crisis have affected
the Ivorian government's ability to attract foreign investment.
Transparency International's 2006 "corruption perception index" has
ranked Cote d'Ivoire 153rd of 163 countries. Businesses have
reported corruption at every level of the civil service. Stamps,
copies, and an official act to register a birth, death, automobile,
carry a supplemental "commission." If the commission is refused, the
application is not processed. The size of the commission varies with
the cost of the service or investment. Some U.S. investors have
raised specific concerns about the rule of law and the government's
ability to provide equal protection under the law. A poor record in
enforcing the rule of law was one reason cited for the country's
loss of eligibility for benefits under the African Growth and
Opportunity Act (AGOA) at the end of 2004.
In December 2007, the GOCI appointed the members of the country's
financial intelligence unit, Cellule Nationale de Traitement des
Informations Financieres-CENTIF, to fully comply with the WAEMU's
directive of September 2002 on anti-money laundering and start

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operations about collecting data on suspicious financial
transactions from financial bodies.
12. BILATERAL INVESTMENT AGREEMENTS
There are no bilateral investment or taxation treaties between Cote
d'Ivoire and the U.S.

13. OPIC AND OTHER INVESTMENT INSURANCE PROGRAMS
OPIC insures several U.S. investments in Cote d'Ivoire although the
overall exposure is relatively small. Since 1999, OPIC has not
issued any new investment insurance policies in Cote d'Ivoire, and
in 2003, OPIC withdrew its underwriting agreement for Cote d'Ivoire.
The African Project Development Facility (APDF) and the African
Investment Program of the International Finance Corporation (IFC)
may assist investors now that its parent the World Bank is reengaged
in Cote d'Ivoire. Cote d'Ivoire is a member of the Multilateral
Investment Guarantee Agency (MIGA).
14. LABOR
The Constitution and the Labor Code grant all citizens, except
members of the police and military, the right to form or join
unions, and workers exercise these rights. Registration of a new
union takes three months. Despite these protections, only a small
percentage of the work force is actually organized, and most
laborers work in the informal sector (i.e. small farms, small
roadside stands, and urban workshops). Anti-union discrimination is
prohibited. There have not been reports of anti-union
discrimination, and as a consequence there have been no known
prosecutions or convictions under this law. Unions were free to join
international bodies, and the General Workers Union of Cote d'Ivoire
(UGTCI) was affiliated with the International Confederation of Free
Trade Unions. The Constitution additionally provides for collective
bargaining, and the Labor Code grants all citizens, except members
of the police and military services, the right to bargain
collectively. Collective bargaining agreements were in effect in
many major business enterprises and sectors of the civil service. In
most cases in which wages were not established in direct
negotiations between unions and employers, the Ministry of
Employment and Civil Service established salaries by job categories.
The Constitution and statutes provide for the right to strike, and
the Government generally protects this right. However, the Labor
Code requires a protracted series of negotiations and a six-day
notification period before a strike may take place, making legal
strikes difficult to organize.
On February 19, 2004, the Minister of Employment and Labor and the
Minister of Economy and Finance signed a decree aimed at promoting
national employment. This decree favors the employment of Ivorians
in private enterprises. The decree states that any position to be
filled must be advertised for two months. If after two months no
qualified Ivorian is found, the employer is allowed to recruit a
foreigner, provided that he informs the Administration of his plan
for recruiting an Ivorian to fill the position in the next two
years. The foreign employee must be given a labor contract and must
have a visa "carte de sejour" that costs USD 300 (CFAF 150,000) for
non-ECOWAS and USD 30 (CFAF 15,000) for ECOWAS citizens each year
(the new rates of USD 600 for non ECOWAS and USD 70 For ECOWAS
citizens adopted in June 2002 were never applied). Representatives
of the West African Economic and Monetary Union harshly criticized
the decree and claimed that it violated Article 91 of the West
African Economic and Monetary Union Treaty, which permits the free
movement of persons for employment within the union. In response to
the criticism, the Minister released a statement to the press
indicating that the decree was a guideline, not an obligation, and
that it was not meant to discriminate against West Africans seeking
employment in Cote d'Ivoire. On November 8, 2007, Ivorian President
Gbagbo signed a decree permanently suspending the "carte de sejour"
requirement for ECOWAS citizens.
15. FOREIGN-TRADE ZONES/FREE PORTS
There are no free trade zones in Cote d'Ivoire. In August 2004, the
Ivorian government adopted a plan to create free trade zones for
information technology and for biotechnology. This project is
dormant. Another free trade zone project, which was planned for the
port of San Pedro, also remains dormant. Bonded warehouses do exist,
and bonded zones within factories are allowed. High port costs and
maritime freight rates have inhibited the development of in-bond
manufacturing or processing, and there are consequently no general
foreign trade zones.

16. FOREIGN DIRECT INVESTMENT STATISTICS:
Foreign Direct Investment inflow by Sector, 2007(USD)

Sectors Investment Percentage

Food 67,191,977 9.67%
Mechanic, Iron &
Steel Industry 45,350 0.01%
Health 1,974,624 0.28%
Tourism & Hotel 306,385 0.04%

ABIDJAN 00000036 008 OF 008


Communications 341,386 0.05%
Fishing 2,686,820 0.39%
Telecommunications 461,796,648 66.47%
Trade 1,287,970 0.19%
Service 73,131,050 10.53%
Training 143,756 0.02%
Plastics 253,483 0.04%
Chemical 236,556 0.03%
Wood 432,531 0.06%
Transport 14,804,602 2.13%
Mining 7,140,847 1.03%
Oil & Gas 11,040,375 1.59%
Other Energies 48,998,138 7.05%
Cosmetics 1,389,803 0.20%
Breeding 39,748 0.01%
Paper Industry 1,464,538 0.21%
Other Industries 15,962 0.00%
Total 694,722,549 100.00%

Source: Ivoirian Investment Promotion Authority (CEPICI). Average
exchange rate CFAF 478 per one USD.

Foreign Direct Investment inflow by Country of Origin, 2007(USD)

Countries Investment Percentage

Norway 1,445,533 16%
Lebanon 4,973,737 54%
Israel 101,118 1%
China 2,686,820 29%
TOTAL 9,207,208 100.00%

Source: CEPICI. Table does not represent all the flow investments by
origin.

Average exchange rate CFAF 478 per one USD.
*CEPICI does not include investment from resident Lebanese in FDI
figures

AKUETTEH

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