Cablegate: Cote D'ivoire 2010 Investment Climate Statement


DE RUEHAB #0098/01 0221743
R 221742Z JAN 10



E.O. 12958: N/A
SUBJECT: Cote d'Ivoire 2010 Investment Climate Statement

REF: 09 STATE 124006

1. In response to reftel request, Embassy Abidjan's Investment
Climate Statement 2010 follows in paragraph 2.

2. Begin Text.

Openness To Foreign Investment. In September 2002, an attempted
coup in Cote d'Ivoire began a crisis that divided the country
politically, militarily, and economically. In subsequent months,
many foreign investors left the country. Cote d'Ivoire has
regained a great deal of stability and has seen modest economic
growth in recent years. However, national elections have not been
held since the crisis began, a coalition of government and rebel
leaders still governs the country, and to a large extent the
northern and southern portions of the country still operate as
separate economies. Despite the ongoing political/economic
crisis, the Ivorian government actively encourages foreign
investment through mergers, acquisitions, joint ventures,
takeovers, or startups. It is not unusual for high-ranking Ivorian
officials, including the President, to meet with potential foreign
investors. 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. Cote d'Ivoire also has a
Petroleum Investment Code and a Mining Investment Code, which were
revised to encourage foreign investment in these sectors by
exempting them from income and other taxes. The exemption also
extends to 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. The government has privatized some parastatal
enterprises, but additional privatizations are not likely until
after national elections take place.

The tax schedule, as revised in 2006, includes fiscal measures to
reduce the corporate tax burden and stimulate economic activity.
These measures include:

--A corporate income tax of 27 percent (down from 35 percent prior
to the 2006 revisions).

--The awarding of a three-year corporate income tax exemption and
free tax registration for the return of companies that left the
country as a result of the crisis.

Cote d'Ivoire has an investment promotion center called CEPICI,
(Centre de Promotion des Investissements en Cote d'Ivoire, ), 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.

The World Bank's 2010 "Doing Business" report ranks Cote d'Ivoire
168 of 183 countries evaluated.

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.

There are no laws specifically authorizing private firms to adopt
articles of incorporation or association that limit or prohibit

foreign investment, participation, or control. Furthermore, no such
practices have been reported.

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-who frequently influence the awarding of tenders.
Additionally, larger firms (which in many cases are foreign
companies) face particular government requests and barriers (e.g.,
caps on market share or pressure with regard to pre-payment of
taxes) that smaller businesses (which in many cases are Ivorian
companies) do not face. 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. Most
businesses, including agribusinesses and forestry companies, opt
for long-term leases. Many foreign investors see corruption,
especially in the judicial system, as a major impediment to
investment in Cote d'Ivoire. Some foreign investors have described
extraordinary difficulty and lengthy delays in establishing
investment in Cote d'Ivoire.

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. There is a need for oil-servicing companies
and oil exploration equipment and for experienced engineers and rig

Oil has become Cote d'Ivoire's leading export product, outpacing
traditional leader cocoa. Development of new gold mines in recent
years in the central and northern areas of the country also
contributes to national economic growth and exports. Another area
of commercial success is cellular phone service, which saw the
entry of a fifth mobile operator in December 2008 and the
announcement of a sixth operator; all of the cellular phone service
operators are largely financed by foreign capital. U.S. investment
is noticeably absent from the Ivorian telecommunications sector,
which accounted for approximately $161 million (approximately 43
percent) of new FDI inflows in 2009.

The cocoa sector remains quite 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 an unwritten
policy that prevents foreign companies from dominating 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
on 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. In October 2007, in response to
several public accusations of widespread malfeasance in the cocoa
sector, the Ivorian President ordered the public prosecutor to
investigate the allegations, particularly those concerning
embezzlement. Several top officials in the sector are now in
prison awaiting trial on charges of corruption. In September 2008,
the President dissolved the cocoa-coffee regulating bodies,
replacing them with a transitional Cocoa-Coffee Management
Committee, which continues to regulate the sector. The World Bank
and IMF have continued their focus on the cocoa sector as a key
economic bellwether and are pressing the Ivorian government to
reform this sector. On October 14, 2009, the Cocoa Reform Committee
set up by presidential decree on February 27, 2009, and charged
with restructuring the cocoa sector submitted its draft proposal to
the president. The proposal has not been made public.

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. In March
2009, the IMF and the World Bank approved new programs for Cote
d'Ivoire and approved the country's decision point for the Enhanced
Heavily Indebted Poor Countries (HIPC) Initiative.

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 transfer funds freely within the WAEMU zone,
when Ivoirians 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,
Ivoirians and expatriate residents are prohibited from carrying an
amount of currency greater than the equivalent of two million CFA
francs (approximately $4,395). Larger amounts require the approval
of the Ministry of Finance, and must be in travelers or bank

The Government must grant prior permission for investments coming
from outside the WAEMU zone, 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 as cocoa is purchased and exported. Companies continue to
complain that the Government is slow in approving currency

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 continues to be a problem. 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 of Cote d'Ivoire.

Dispute Settlement. The judicial system is dysfunctional.
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 rule against foreign investors in favor of entrenched
interests. In addition, cases are often 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. To counteract this,
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 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 the Government established an arbitration
tribunal in 1999 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 tribunal's ability to enforce awards more quickly. However, use
of the tribunal in lieu of the court system has been limited; in
the past ten years it has heard only 105 cases (18 in 2009). In
addition to its local arbitration board, Cote d'Ivoire is a member
of the International Center for Settlement of Investment Disputes.
The Abidjan-based, regional Joint Court of Justice and Arbitration

provides an alternative means of solving contractual disputes.

There is political consensus on the need to reform the judicial
system. However, the Ivorian government remains preoccupied with
the ongoing political crisis; judicial reform, like many other
legislative initiatives, remains on the back burner. Reform efforts
are likely to continue to languish until after the next
presidential elections, which did not take place as scheduled in
November 2009, and have not yet been rescheduled. 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 would become a separate and independent Court of
Auditors (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
rules governing business transactions. The OHADA permits three
different types of bankruptcy liquidation: an ordered suspension of
payment to permit a negotiated settlement, an ordered suspension of
payment to permit restructuring of the company, similar to Chapter
11, and the complete liquidation of assets, similar to Chapter 7.
Creditors' rights, irrespective of nationality, are protected
equally by the Act. Monetary judgments devolving from a bankruptcy
are usually paid out in local currency.

At present, there are no investment disputes involving U.S. firms
in Cote d'Ivoire.

Performance Requirements And Incentives. Cote 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).

Right To Private Ownership And Establishment. Foreign investors
generally have access to all forms of remunerative activity on
terms equal to those enjoyed by Ivoirians. 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
cotton company, and a 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. The legislation remains
blocked, 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 and
require appropriate licenses and association with an Ivorian
partner. Foreign companies operate successfully in all these
service sectors.

Protection Of Property Rights. Ivoirian civil code provides for
enforcement of private property rights. The concept of mortgages
exists, but mortgage lending is not well developed. There is no
secondary market for mortgages. Property and title registration
systems exist in Cote d'Ivoire. The legal system protects and
facilitates the acquisition and disposition of all property rights
including land, buildings and mortgages.

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
individually, it can still be difficult to obtain a free-hold deed
to property even years after a closing. For that reason, most
individuals and businesses tend to sign long-term leases. Although
the legal system recognizes the right to contract for leaseholds in
both urban and rural areas, in most cases traditional tribal
land-owners do not have a clear understanding 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 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 provide proof of ownership through an
assignment deed or purchase contract.

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
permit trade of counterfeit textiles, pharmaceutical products, and
vehicle parts. 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
copyrights 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. Cote d'Ivoire has not signed the WIPO internet treaties.

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, a lack of 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 shipment of goods suspected of infringement,
to investigate 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 Copyright Office (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, in
March 2006 the Minister of Culture established a temporary
administration, as well as a commission to reform BURIDA. 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. In November 2008, the President signed a
decree reforming BURIDA and changing its legal status from an
association to a civil corporation. This change was intended to
give BURIDA more autonomy and a more business-like focus. On July,
25, 2009 a new BURIDA board was elected.

Transparency Of Regulatory System. The Government has taken some
steps toward encouraging a more transparent and competitive
economic environment. Additionally, the IMF, World Bank, European
Union, and other large donors have pushed the Government to make
reforms. 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.

From 1999-2008, several private and public institutions with
producer, industry, and government representation were tasked with
controlling and regulating Cote d'Ivoire's cocoa and coffee sector.
These groups were neither efficient nor transparent and became the
subject of controversy regarding their fiduciary mismanagement. In
September 2008, after several leaders of these regulatory boards
were jailed on corruption charges, the President dissolved the
cocoa regulating bodies to establish a management committee to
regulate the cocoa and coffee sector. The World Bank and IMF are
pushing the government to institute further reforms to bring
greater transparency to the sector.

On August 6, 2009, the Ivoirian government adopted a community
framework for public procurement by incorporating WAEMU Directives
4 and 5 on bidding process and auditing as well as regulation of
public procurement within the Union. The new public procurement
code aims to harmonize public procurement policy and comply with
WAEMU integration objectives

The changes include the separation of auditing and regulating
functions, the passage from the national to the community
preference, the taking into account of procurement for intellectual
services and the increase from 25 to 30 percent of advance payment
for the startup of procurement of goods, works and services.

Another change is the creation of the National Regulatory Authority
for Public Procurement, which has financial autonomy and is charged
with monitoring the application of good governance principles; it
may sanction those who do not comply with public procurement

The Finance Ministry has at times changed 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.

In December 2008 the Ministry of Commerce unilaterally established
a new fee on imports, in the amount of CFA 30,000 to 40,000 (USD 66
to 88), depending on the type of import. Many businesses reported
that they received no receipts for paying the fee. With strong
resistance from the business community, which argued that the
Ministry had no legal basis for imposing the fee, the Government
suspended the fee.

Proposed laws and regulations are not published in draft form for
public comments. The National Assembly debates most legislation.
The Government often holds public seminars and workshops to discuss
proposed plans with trade and industry associations.

Efficient Capital Markets And Portfolio Investment. Cote
d'Ivoire's commercial banking sector is generally sound. The 50
bank branches that were closed in the former rebel zones at the
height of the military/political crisis are reopening while new
banks are expanding their networks. The IMF reported in March 2009
that two of the five banks in Cote d'Ivoire that had negative net
worth at the end of June 2008 had formulated recapitalization plans
approved by the Banking Commission. One bank was under interim
administration. The remaining two were being taken over by the
government through conversion of illiquid deposits into share
capital. The IMF also reported that high credit growth had reduced
the nonperforming loans ratio to 17.7 percent of the total, down
from 21.5 percent at the end of 2007.

According to the Central Bank of West African States, as of
December 31, 2006, the following Ivorian banks had USD 20 million
or more in total assets (figures have been converted from FCFA to
USD at an exchange rate of 500 FCFA to 1 USD):

Banque Nationale d'Investissement (BNI): USD 41.0 million

Banque Internationale pour le Commerce et l'Industrie de la Cote
d'Ivoire: USD 33.3 million

Societe Generale de Banques en Cote d'Ivoire: USD 31.1 million

Standard Chartered Bank - Cote d'Ivoire: USD 20.6 million

Banque Internationale pour l'Afrique Occidentale: USD 20.0 million

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 bonds are available for purchase by individuals or
companies. The Regional Council for Savings Investments 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 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 2008, total assets of the 18 banks and three credit
institutions were FCFA 2.3 trillion (about USD 5 billion), an
increase of 6.6 percent from 2007 figures.

Ivorian accounting systems are well developed and approach
international norms. A WAEMU-wide accounting system-SYSCOA, 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.

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 2010. No protests have been
directed against American or foreign businesses.

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 provides for
punishment of state employees who benefit directly or indirectly
from private or parastatal companies related to contracts, markets
or financial payment under their purview. Company managers who are
complicit in the corrupting act are treated as accomplices.

Racketeering by security and defense forces is often denounced in
the media and receives wide attention from the authorities and the
population. 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 pay a total of $100 to $400 at the various checkpoints they
must pass through, depending on the cargo. In July 2008, the army
chief of staff launched an anti- racketeering campaign. The
campaign led to a substantial reduction in police check points on
the main country international roads; however, it has not yielded
expected results concerning racketeering by security forces. There
are several governmental entities in charge of fighting corruption:
the General Secretariat in Charge of Good Governance, the Board of
State General Inspectors, and the Finance Ministry's Inspector
General's Office. None has been effective in stamping out this
growing problem. Neither Transparency International, nor any
regional or local non-governmental "watchdog" organization
specifically related to business 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 2009 "Corruption
Perception Index" has ranked Cote d'Ivoire 154th of 180 countries.
Businesses have reported corruption at every level of the civil
service. Obtaining an official stamp or copy or birth or death
certificate, or an automobile title, requires payment of 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.

The country's financial intelligence unit, Cellule Nationale de
Traitement des Informations Financieres (CENTIF), established in
December 2007, is responsible for investigating money laundering
and terrorist financing. CENTIF has broad authority to investigate
suspicious financial transactions, including those of government

A local company may not deduct a bribe to a foreign official from
taxes. Under the Ivoirian Penal Code, a bribe by a local company to
a foreign official is a criminal act.

Bilateral Investment Agreements. There are no bilateral investment
or taxation treaties between Cote d'Ivoire and the U.S.

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).

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. 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 consequently, no known prosecutions or

convictions under this law. Unions are 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 are in effect in
many major business enterprises and sectors of the civil service.
In most cases in which wages were not established by direct
negotiations between unions and employers, the Ministry of
Employment and Civil Service establishes 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.

In February 2004, the Minister of Employment and Civil Service and
the Minister of Economy and Finance signed a decree aimed at
promoting national employment. This decree favors the employment of
Ivoirians 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 plans to recruit an
Ivorian to fill the position in the next two years. The foreign
employee must be given a labor contract. Until recently, in order
to reside in Cote d'Ivoire for more than three months, foreigners
were required to have a "carte de sejour" that cost the equivalent
of a month's salary each year. Representatives of UEMOA harshly
criticized the requirement and claimed that it violated Article 91
of the UEMOA Treaty, which permits the free movement of persons for
employment within the union. In November 2007, President Gbagbo
signed a decree suspending the carte de sejour requirement for
ECOWAS citizens. It does not appear that elimination of the carte
de sejour requirement has had a significant effect on employment
opportunities in Cote d'Ivoire.

Foreign-Trade Zones/Free Ports. There are no free trade zones in
Cote d'Ivoire. In June 2008 the Export-Import Bank of India opened
a USD 21 million line of credit for the Ivorian government to build
a free trade zone for information technology and biotechnology in
Grand Bassam, which is about 33 kilometers from Abidjan. The
Ivorian government secured additional project funding from the West
African Development Bank and the Ecowas Bank for Investment and
Development and has begun negotiations to purchase a site for the
zone. Another free trade zone project, which was planned for the
port of San Pedro, 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.

Major Foreign Investors. According to the United Nations
Conference on Trade and Development's World Investment Report, the
stock of foreign direct investment in Cote d'Ivoire as of 2008 was
an estimated USD 6 billion, the equivalent of 28.5 percent of that
year's GDP. In terms of FDI stock, France is Cote d'Ivoire leading
investor, followed by other European countries and Lebanon.
Chinese, Indian, Libyan, Singaporean, and Moroccan businesses have
begun making significant investments in Cote d'Ivoire.

U.S. firms have made major investments in oil and gas, banking,
cocoa, and international courier services.

Foreign Direct Investment Statistics: CEPICI has published the
following figures on FDI flows to Cote d'Ivoire per sector for
2009. However, these figures do not include all FDI flows in 2009.
The total figure presented by CEPICI is the equivalent of 0.3 of
2009 GDP.

Foreign Direct Investment inflow by Sector, 2009 (USD)







Mechanic, Iron & Steel



Mining Industry






Tourism & Hotel






Construction Material















Printing Industry












Drug Pharmaceutical



Oil & Gas















Glass Industry



Others (energy)






Source: Ivoirian Investment Promotion Authority (CEPICI). Average
exchange rate CFAF 455 per one USD.

CEPICI has published the following figures on FDI flows to Cote
d'Ivoire by country of origin for 2009. However, these figures
include only a small fraction of FDI flows in 2009.

Foreign Direct Investment inflow by Country of Origin, 2009 (USD)













Great Britain
























Source: CEPICI. Table does not represent all the flow investments
by origin. Average exchange rate CFAF 455 per one USD. CEPICI does
not include investment from resident Lebanese in FDI figures.

End text.

© Scoop Media

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