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Viewing cable 06ABIDJAN1206, PREPARATION OF 2007 NATIONAL TRADE ESTIMATE REPORT

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Reference ID Created Released Classification Origin
06ABIDJAN1206 2006-10-30 12:50 2011-08-24 16:30 UNCLASSIFIED Embassy Abidjan
VZCZCXRO3953
RR RUEHMA RUEHPA
DE RUEHAB #1206/01 3031250
ZNR UUUUU ZZH
R 301250Z OCT 06
FM AMEMBASSY ABIDJAN
TO RUEHC/SECSTATE WASHDC 2089
INFO RUEHZK/ECOWAS COLLECTIVE
UNCLAS SECTION 01 OF 04 ABIDJAN 001206 
 
SIPDIS 
 
SIPDIS 
 
E.O. 12958: N/A 
TAGS: ETRD ECON EFIN IV
SUBJECT: PREPARATION OF 2007 NATIONAL TRADE ESTIMATE REPORT 
 
REF: SECSTATE 136302 
 
1.  TRADE SUMMARY:  The U.S. trade deficit with Cote 
d,Ivoire was $1.1 billion in 2005, an increase of $477 
million from $597 million in 2004. U.S. goods exports in 2005 
were $124 million, up 4.9 percent from the previous year. 
Corresponding U.S. imports from Cote d,Ivoire were $1.2 
billion, up 67.6 percent.  Cote d,Ivoire is currently the 
119th largest export market for U.S. goods.  The stock of 
U.S. foreign direct investment (FDI) in Cote d,Ivoire in 
2004 was $247 million, up from $215 million in 2003.  Cote 
d,Ivoire,s international trade patterns ) especially those 
involving trade in the West African region ) have been 
significantly affected by the political instability and civil 
unrest that have gripped the country in the last few years. 
 
2.  IMPORT POLICIES:  Cote d,Ivoire is a member of the WTO, 
the West African Economic and Monetary Union (known by its 
French acronym, UEMOA), and the Economic Community of West 
African States (ECOWAS).  In January 2000, Cote d,Ivoire 
eliminated tariffs on imports from the eight member countries 
of UEMOA when UEMOA,s Common External Tariff (CET) entered 
into effect. Imports from all other countries are subject to 
tariffs based on the CET schedule of five percent for raw 
materials and inputs for local manufacture, 10 percent for 
semi-finished goods, and 20 percent for finished products. 
In 2004, UEMOA suspended its practice of temporary duty-free 
status for imported goods destined for another country in the 
zone.  This change means that goods entering UEMOA from 
non-member countries may no longer transit a UEMOA country 
duty-free en route to their final destination.  Duties are 
now assessed at the first port of entry. 
 
A one percent statistical fee is levied on the CIF (cost, 
insurance, and freight) value of imports except those 
destined for re-export, transit, or donations for 
humanitarian purposes under international agreements. 
Another tax on imports into Cote d,Ivoire is a one percent 
community levy (solidarity tax) on the CIF value, which goes 
to a compensation fund to assist WAEMU members, such as 
landlocked Niger, Burkina Faso and Mali, which suffered from 
revenues losses due to the implementation of the CET.  There 
are special taxes on fish (between 5 and 20 percent), rice 
(between 5 percent and 10 percent based on category), alcohol 
(45 percent), tobacco (between 5 and 20 percent), cigarettes 
(between 30 and 35 percent), certain textile products (20 
percent), and petroleum products (between 5 and 20 percent). 
These special taxes are designed to protect national 
industries.  The Customs office collects a value added tax 
(VAT) of 18 percent on all imports, reduced from 20 percent 
in 2003.  This tax computation is calculated on the CIF value 
added to the duty and the statistical fee. Cote d,Ivoire 
continues to apply minimum import prices (MIPs) to imports of 
certain products  such as cooking oil, cigarettes, sugar, 
used clothes, concentrated tomato, broken rice, matches, 
copybook, tissues, polypropylene sacks, alcohol and milk, 
though the WTO waiver it once had allowing it to apply MIPs 
on some products has long since expired. 
 
There are no quotas on merchandise imports, although the 
following items are subject to import prohibitions, 
restrictions, or prior authorization:  petroleum products, 
animal products, live plants, seeds, arms and munitions, 
plastic bags, distilling equipment, pornography, saccharin, 
narcotics, explosives, illicit drugs, and toxic waste. 
Textile imports are subject to some authorization 
requirements by the Department of External Trade. 
 
Rules governing the handling of imported toxic waste were 
apparently ignored in the September 2006 incident involving 
the illegal dumping of several hundred tons of toxic waste 
unloaded by an Ivorian company from a foreign vessel in the 
environs of the capital city Abidjan, which according to 
official figures left ten dead and thousands ill. 
 
3.  STANDARDS, TESTING, LABELING AND CERTIFICATION:  All 
items imported into Cote d'Ivoire must have a certificate of 
compliance to clear customs.  Two European companies, BIVAC, 
affiliated to the French group Bureau Veritas and the Swiss 
firm Cotecna are contracted to carry out all qualitative and 
quantitative verifications of goods imported into Cote 
d'Ivoire with a value exceeding CFA 1.5 million (USD 3,000). 
All merchandise packaging must be clearly labeled as to its 
origin.  Manufactured food products must be labeled in French 
and have an expiration date.  Standards generally follow 
French or European norms. 
 
4.  GOVERNMENT PROCUREMENT:  The government of Cote d,Ivoire 
regularly and periodically issues notices of procurement 
tenders in the local press, in the form of documentation sent 
to the U.S. Embassy, or sometimes published in international 
magazines and newspapers.  On occasion, there is a charge for 
the bidding documents.  The implementing agency is usually 
 
ABIDJAN 00001206  002 OF 004 
 
 
the ministry making the request or the ministry under whose 
tutelage the office functions.  The Bureau National d,Etudes 
Techniques et de Developpement (BNETD), the government,s 
technical and investment planning agency and think tank, 
sometimes serves as an executing agency representing 
ministries for major projects to be financed by international 
institutions. 
 
In 2005, the Ministry of Finance introduced institutional 
changes in the new public procurement code such as: 
decentralizing operations, building greater transparency in 
the system, creating of commissions in charge of examining 
out-of-the-norm procurements, imposing stricter internal 
management controls and establishing an appeals process. 
 
The government has created the &Direction des Marches 
Publics8 (DMP), a centralized office of public bids in the 
Ministry of Finance to help ensure compliance with 
international bidding practices. While theoretically the 
office is functioning and the procurement process is open, 
some well-entrenched foreign companies, through their 
relations with government officials, may retain a preferred 
position in securing bid awards.  Many firms continue to see 
corruption as an obstacle that affects procurement decisions. 
 Cote d,Ivoire is not a signatory to the WTO Agreement on 
Government Procurement. 
 
5:  SERVICES BARRIERS:  Banks and insurance companies are 
subject to licensing requirements, but there are no 
restrictions on foreign ownership or establishment of 
subsidiaries.  Foreign participation is widespread in 
computer services, education, and training.  Prior approval 
is required for foreign investment in the health sector, 
travel agencies, and law and accounting firms; majority 
foreign ownership of companies in these sectors is not 
permitted, though foreign companies currently operate in all 
these sectors in partnership with local firms and with 
government permission.  While one U.S. bank, Citibank, is 
currently operating in Cote d,Ivoire, American insurance and 
reinsurance companies are not present in the Ivorian market. 
 
Cote d,Ivoire does not formally require majority Ivorian 
ownership in most sectors other than those noted above. 
There are professional associations such as legal and 
accountancy associations that serve to regulate professional 
services which require Ivorian nationality.  For example, 
there are restrictions on the registration of foreign 
nationals by the accountants, association, unless they have 
already been practicing in Cote d,Ivoire for several years 
under the license of an Ivorian practitioner.  In the case of 
legal  services, Cote d,Ivoire distinguishes between 
providing legal advice and practicing law in court. The 
former is liberalized, but to be admitted to the Ivorian bar 
and practice in a courtroom, lawyers must be accredited by 
the Ivorian lawyers, association which requires Ivorian 
nationality. 
 
6.  INVESTMENT BARRIERS:  The government encourages foreign 
investment, but in recent years political instability has 
substantially undermined investor confidence. The negative 
effects of the 1999 coup d,etat, the ensuing 10-month 
military rule, and the upheavals surrounding the elections in 
October 2000 had not dissipated when an attempted coup 
d,etat that turned into a civil war occurred in September 
2002.  In November 2004, many (particularly foreign-owned) 
businesses were destroyed and looted, further dampening 
near-term investment prospects.  Ongoing efforts at national 
reconciliation have had limited progress, but there has been 
no resolution of the crisis.  There has been no progress on 
privatization since 2002. 
 
The Ivorian investment code provides tax incentives for 
investments higher than $1 million, as well as land 
concessions for projects. Concessionary agreements, which 
would exempt investors from tax regulations, require the 
additional approval of the Ministry of Finance and Economy 
and the Ministry of Industry, making the clearance procedure 
for planned investments, if tax breaks are sought, 
time-consuming and confusing.  The Center for the Promotion 
of Investment in Cote d'Ivoire (CEPICI) was established to 
act as a one-stop shop for investment to help alleviate this 
problem. Even when companies have complied fully with the 
requirements, tax exemptions are sometimes denied with little 
explanation, giving rise to accusations of favoritism and 
corruption. 
 
In August 2006, the government instituted new rules governing 
the rebate of VAT for companies that export more than 70% of 
their production, such as multinational cocoa 
purchasing-and-export companies.  Qualifying companies will 
now be subject to initial VAT collections on all their 
purchases, both local and imported, vs. simply imported goods 
as previously.  VAT rebates will be delayed 12 ) 36 months. 
 
ABIDJAN 00001206  003 OF 004 
 
 
The result is that qualifying companies will see a three or 
four fold increase in their VAT payments and a significant 
slowdown in already-slow reimbursements. 
 
 
7.  INTELLECTUAL PROPERTY RIGHTS (IPR) PROTECTION:  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 
in part to lack of customs checks in rebel-held Western and 
Northern border areas, which does not allow law enforcement 
action on trade of counterfeit textiles, pharmaceuticals and 
vehicle parts.  Cote d'Ivoire is a party to the Paris 
Convention for the Protection of Industrial Property, its 
1958 revision, and the 1977 Bangui Agreement covering 16 
Francophone African countries in the African Intellectual 
Property Organization (OAPI).  Effective February 2002, 
changes were made to the Bangui Agreement in an effort to 
bring it into conformity with TRIPS.  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 authors, rights with regard to rented films and videos. 
However, the National Assembly has not yet approved this 
legislation and will likely not take action until political 
ambiguities concerning the Assembly,s term of office are 
clarified.  The Assembly,s mandate expired at the end of 
2005 and new legislative elections are effectively on hold 
until the political reconciliation process moves forward. 
 
The government,s Office of Industrial Property is charged 
with ensuring the protection of patents, trademarks, 
industrial designs, and commercial names.  The office faces 
an array of challenges, including inadequate resources, 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.  Government efforts to combat piracy are 
modest.  The Ivorian Office of Authors, Rights (BURIDA), 
established in 1998, has established a new sticker system, 
effective January 2004, to protect audio, video, literary and 
artistic property rights in music and computer programs. 
BURIDA,s operations were hampered by a long-running dispute 
between management and board members over policy and 
leadership issues, specifically with regard to who should 
direct the agency.  To resolve the crisis at BURIDA, in March 
of 2006 the Minister of Culture invoked a ministerial bylaw 
to establish a temporary administration and a commission to 
study and propose a global reform of this organization. 
Despite the ongoing management issue, the agency does help to 
promote IPR enforcement with lawyers and magistrates. 
 
8.  ELECTRONIC COMMERCE:  Electronic commerce is in its very 
early stages in Cote d,Ivoire but is expected to grow over 
time.  There are a number of cultural barriers to growth, 
including the custom of paying with cash and the absence of 
widespread issuance and use of credit cards. Despite these 
barriers, individuals and businesses have begun experimenting 
with electronic commerce, and interest in the medium 
continues to gain ground.  Hotels, restaurants, retail 
outlets and travel agencies are developing the use of credit 
cards. Banks also have started implementation of telephone, 
Internet and SMS banking in addition to ATMs services. 
Citibank, for example, offers an international e-banking 
platform to all clients world-wide, a feature that has helped 
them to retain clientele in Abidjan and attract new 
customers.  Effective August 3, 2006, theWest African 
Central Bank, &Banque Centrale des tats de l,Afrique de 
l,Ouest,8 (BCEAO) establishd the inter-bank automated 
payment system to redue delays in bank settlement 
operations.  Small ad medium-sized businesses continue to 
explore elctronic commerce, and interest in the medium 
coninues to gain ground. 
 
9.  OTHER BARRIERS:  ManyU.S. companies view corruption as 
an obstacle to nvestment in Cote d,Ivoire.  Corruption has 
the reatest impact on judicial proceedings, contract aards, 
customs, and tax issues. It is common for udges who are open 
to financial influence to disort the merits of a case. 
Corruption and the recent political crisis have affected the 
Ivorian govrnment,s ability to attract and retain foreign 
ivestment.  Some U.S. investors have raised specifi 
concerns about the rule of law and the governmet,s ability 
to provide equal protection under the law.  In 1997, the 
government of Cote d,Ivoire athorized the creation of an 
arbitration court, te Joint Court of Justice and 
 
ABIDJAN 00001206  004 OF 004 
 
 
Arbitration, which is a member of the regional arbitration 
board known as the Organization for the Harmonization of 
Business Law in Africa (OHADA).  Since then, however, the 
court has examined 45 cases (only five in 2005).  In July 
2004, the governing body was strengthened with the added 
participation of local Chambers of Commerce, and the rules 
governing enforcement of arbitral awards were modified to 
allow for a quicker enforcement of awards.  The business 
community has welcomed the 2004 revisions and the Arbitration 
Board has acted effectively as an alternative vehicle for 
timely business dispute resolution.  In addition to its local 
arbitration board, Cote d,Ivoire is a member of the 
International Center for the Settlement of Investment 
Disputes. 
 
10.  ESTIMATED COST OF TRADE BARRIERS.  Post conferred with 
relevant U.S. businesses engaged in business in Cote 
d,Ivoire in an attempt to estimate the value of existing 
trade barriers, and they were unable to provide meaningful 
approximations.  The nature of trade barriers in Cote 
d,Ivoire also makes it difficult for Post to provide a 
global estimate for the overall costs of trade barriers. 
Hooks