Title
PROTOCOL RELATING TO COMMUNITY ENTERPRISES
Preamble
THE HIGH CONTRACTING PARTIES
Recalling the provisions of Articles 2 and 32 of the Treaty of the Economic Community of West African States relating to the integration and development of the economies of Member States of the Community;
Recalling the provision of the Protocol relating to the definition of the concept of products originating from Member States of ECOWAS;
Recalling Resolution ECW/CM/VI/RES.26 of November 1979 of the Council of Ministers relating to the formulation of ECOWAS Regional Industrial Policy and Programme;
Recalling Decision A/DEC.1/5/85 dated 30 th May, 1983 of the Authority relating to the adoption and the implementation of a single Trade Liberalisation Scheme for industrial Products originating from Member States and the classification of the Member States contained in Article 4 thereof;
Mindful of the fact that the responsibility for the economic development of the West African region rests with the Member States themselves;
Considering that in furtherance of the objectives of the Treaty, Community enterprises can be vital agents for the promotion of more rapid integration of the economies of the Member States through the provision of additional avenues for joint endeavours under a Community framework;
HAVE AGREED AS FOLLOWS;
Body
Article 1. Definitions
"Treaty" means the Treaty of the Economic Community of West African States signed in Lagos on the 28 th May, 1975;
"Community" means the Economic Community of West African States established by Article 1 of the T reaty;
"Member State" means a Member State of the Community;
"Third Country" means a country other than a Member State of the Community;
"Authority" means the Authority of Heads of State and Government of the Community established by Article 5 of the Treaty;
"Council" means the Council of Ministers of the Community established by Article 6 of the Treaty;
"Executive Secretariat" and "Executive Secretary" means the Executive Secretariat and Executive Secretary of the Community as provided for under Article 8 of the Treaty;
"The Fund" means the Fund for Co-operation, Compensation and Development established by Article 50 of the Treaty;
"Selection Panel" means the Panel established by Article 11 of this Protocol;
"Community Enterprise" means an enterprise admitted to the status of a Community Enterprise under this Protocol and enjoying the benefits and guarantees granted thereunder;
"National Enterprises" means an enterprise that is registered in a Member State and operating under the national laws of the Member States;
"Inter-governmental enterprise" means an enterprise whose equity capital is owned entirely by two or more Member States;
"Citizen of the Community" means a citizen of the Community as defined in the Protocol relating to the definition of Community Citizen;
"National of a Member State" means a national of a Member State who is otherwise not qualified as a citizen of the Community;
"Unit of Account" means the unit of account specified in paragraph 3 of Article 6 of the Protocol relating to the Fund;
"Value Added" means value added as defined by Article 1 of the Protocol relating to the definition of the concept of products originating from Member States;
"Legal Persons of Member States" means institutions or companies in which Member States or their nationals own not less than 51% of the equity capital;
"Processing" shall have the same meaning ascribed to it in the Protocol relating to the definition of the concept of products originating from Member States.
Article 2. Ownership and Form of Community Enterprises
1. Subject to the provisions of this Protocol, an enterprise may be admitted to the status of Community Enterprise under this Protocol if its equity capital is owned by:
a. two or more Member States, or
b. two or more Member States and citizens or institutions of the Community or nationals or legal persons of a Member State or nationals or legal persons of third countries.
2. Any enterprise in respect of which an application is made of admission to the status of a Community Enterprise, shall first have been incorporated as a public limited liability company or established as an inter-governmental enterprise in a Member State.
Article 3. Conditions for the Approval of a Community Enterprise
1. No enterprise shall be admitted to the status of a Community Enterprise unless it complies with the provisions of Article 2 of this Protocol and in addition it satisfies the following conditions:
a. i. In respect of an enterprise referred to in sub-paragraph (a) of paragraph 1 of Article 2 of this Protocol, its entire equity capital is vested in two or more Member States, or
ii. In respect of an enterprise referred to in sub-paragraph (b) of paragraph 1 of Article 2 of this Protocol, not less than 51% of its equity capital is vested in two or more Member States and
Citizens or institutions of the Community or nationals or legal persons of a Member State or nationals or legal persons of third countries; and
b. in accordance with Article 4 of Decision A/DEC.1/5/83 of the Authority.
i. in respect of Cape Verde, the Gambia, Guinea Bissau, Burkina Faso, Mali, Mauritania or Niger its equity capital is not less than 1.5 million units of accounts with an intended investment of not less than 6 million units of accounts, or
ii. in respect of Benin, Guinea, Liberia, Sierra Leone or Togo, its equity capital is not less than 2 million units of account with an intended investment of not less than 8 million units of account,
iii. in respect of Ivory Coast, Ghana, Nigeria or Senegal, its equity capital is not less than 2.5 million units of account with an intended investment of not less than 8 million units of account,
c. its Chairman and the majority of the members of its Board of Directors are citizens of the Community; and
d. its activities extend to two or more Member States with the objective of promoting through complementarity the economic integration of the Community; and
e. its Headquarters is in a Member State; and
f. its objectives are in accordance with the development policies and programmes of the Community as may be determined from time to time by the Council; and
g. it operations will not harm the interest of National Enterprises of Member States; and
h. all its shares are registered and confer the same rights; and
i. with respect to a manufacturing enterprise, its products originate within the Member States in accordance with the provisions of the Protocol relating to the definition of the concept of products origination from Member States of the Economic Community of West African States other than those relating to indigenous ownership and participation.
2. Notwithstanding the provisions of this Protocol, an enterprise may be admitted to the status of a Community Enterprise if it is or will be engaged solely in the purchase or sale of goods without undergoing any processing.
Article 4.
ADDITIONAL CRITERIA FOR APPROVAL OF COMMUNITY ENTERPRISES
In addition to the conditions stipulated in Article 3 of this Protocol, the Selection Panel shall before recommending the admission of an enterprise to the status of a Community Enterprise and depending on the nature of the activities of the enterprise have regard to its ability to contribute to the following objectives:
a. the development of the Community in general and in particular, the industrially less-developed Member States;
b. the promotion of diversification in the economic activities of the Community;
c. the rational use of the resources of the Member States and their economic potential;
d. the creation and the expansion of employment within the Community for nationals of the Member States;
e. improved access of the Member States to international capital markets;
f. the provision of satisfactory arrangements for the training of nationals of the Member States in administrative, technical, managerial and other skills with a view to securing the benefit of their knowledge and experience in the conduct of the enterprises;
g. the promotion and development of indigenous technology and the transfer adaptation of imported one;
h. the improvement of the balance of payments of Member States through significant savings on import from third countries and increase of trade within the Community and exports to third countries;
i. the provision of sufficient and adequate environmental pollution controls and the restoration of the environment to its original state.
Article 5. Application for Approval
1. All applications for the admission of an enterprise to the status of a Community Enterprise shall be in writing and shall first be submitted to the Member State in which the enterprise is located or will be located for its sponsorship with a copy to the Executive Secretariat for information.
1. On receipt of an application, the Member State shall acknowledge receipt and make its decision known to the applicant and the Executive Secretariat within three months of the receipt of such application.
2. An Enterprise sponsored by a Member State shall submit through such Member State thirty copies in French and twenty in English of its application to the Executive Secretariat which shall acknowledge receipt both to the member States and the Enterprises concerned.
Article 6. Information Required for Approval of Application
1. All applications for the admission of an enterprise to the status of a Community Enterprise shall be accompanied by a detailed description of the nature of the enterprise and a copy of its Memorandum and Articles of Association or equivalent documents.
1. The particulars required under paragraph 1 of this Article shall where applicable include the following:
a. the name and address of the enterprise to be approved;
b. a copy of its instrument of incorporation and a certificate showing the number of shares held by each shareholder;
c. list and nationalities of shareholders;
d. the names and nationalities of members of the Board of Directors;
e. the goods produced or to be produced or services offered or to be offered;
f. the actual or projected amount on investment and financing plan showing the amount to be invested in local and external currencies;
g. date of commencement of construction;
h. the day on which the enterprise is expected to commence operation or production in marketable quantities of the products specified;
i. the locality or localities in which it is proposed to establish the enterprise;
j. a detailed feasibility study on the enterprise which shall where applicable include
i. a detailed estimate and description and analysis of the projected markets, capital and production factors, required and size of the labour force, especially the size of personnel required from third countries;
ii. a production scheme indicating the annual volume and value of production and possibilities of expansions;
iii. a detailed inventory of the volume, value and origin of plant machinery, spare parts and all other equipment necessary for the establishment and operation of the enterprise after its admission and their expected sources of supply and the price structure for products to be manufactured and the estimated trading account figures for a ten-year period and cash flow;
Iv. the projected scale of export to third countries;
v. the projected effect on trade within the Community;
Vi. a detailed inventory in volume and value and origin of annual imports of raw materials and semi-processed goods essential to the operations of the enterprise after its admission.
Vii. a programme of recruitment and training for workers who are citizens of the Community that would enable them to acquire the requisite skills. Such programme shall provide for a period at the end of which citizens of the Community shall replace personnel from third countries.
1. Upon the receipt of the application referred to in paragraph 3 of Article 5 of this Protocol, the Executive Secretariat shall:
a. acknowledge receipt and state the period required for an evaluation of the application which shall not exceed six months. The Executive Secretariat may during the evaluation of such application request the applicant for supplementary information and may determine a time limit in any case not exceeding six months, for the communication of such information;
b. forward a copy thereof to all Member States;
c. publish an extract of the application in the Official Journal of the Community and cause it to be published in the Official Gazettes of the Member States.
2. The Member States shall acknowledge receipt and within four months from the date of the publication of an application in the Official Journal of the Community submit their observations thereon to the Executive Secretariat.
3. Three months after the publication of an application in the Official Journal of the Community, the Executive Secretariat shall transmit the application together with all the relevant documents and observations received from the Member States to the Selection Panel for its consideration and recommendations.
4. The Executive Secretariat shall forward the recommendations of the Selection Panel to the next meeting of the Council for its decision.
5. The decision of the Council shall be published in the Official Journal of the Community and transmitted forthwith to the Member States which shall cause it to be published in their Official Gazettes.
Article 8. Objection Procedure
1. Any Member State wishing to object to the admission of an enterprise to the status of a Community Enterprise shall within a period of three months from the date the application is published in the Official Journal of the Community forward to the Executive Secretariat in writing the reasons and justification for its objection.
2. Any legal or natural person established or domiciled in a Member State wishing to object to the admission of an enterprise to the status of a Community Enterprise shall within the period specified in paragraph 1 of this Article submit in writing the reasons and justification for his objection to that Member State for transmission to the Executive Secretariat.
3. Upon the receipt of an objection the Executive Secretariat shall investigate the matter and submit its findings to the Selection Panel for its recommendations and transmit them to the Council for its decision.
Article 9. Approval Agreement
1. As soon as enterprise has been approved for admission to the status of a Community Enterprise by the Council the Executive Secretary shall on behalf of the Community enter into an agreement (hereinafter referred to as "the Approval Agreement") with the enterprise in the form annexed to this Protocol.
2. The duration of the Approval Agreement shall be fixed by the Council on the recommendation of the Selection Panel bearing in mind the size and nature of the enterprise.
3. The Approval Agreement shall be governed by the provisions of this Protocol.
Article 10.
ROLE OF THE EXECUTIVE SECRETARIAT
The Executive Secretariat shall:
a. receive and evaluate all applications for the admission of enterprises to the status of Community Enterprises, submit them to the Selection Panel for its recommendations and to the Council for its decision;
b. keep a register of Community Enterprises and levy and collect from Community Enterprises such registration fees as may be determined by the Council;
c. Monitor in co-operation with the Member States the implementation of training schemes instituted in pursuance with item (vii) of sub-paragraph (j) of paragraph 2 of Article 6 of this Protocol;
d. monitor in co-operation with the Member States the results of benefits granted to Community Enterprise under this Protocol and advise the Council on the performance of such Community Enterprises;
e. inform the Council of any change in the composition of the Board of Directors or in the control of a Community Enterprise;
f. examine as early as possible any complaints or objections received affecting an Approval Agreement or the performance and conduct of a Community Enterprise after commencement of operations and submit them to the Selection Panel;
g. supervise the execution of the Approval Agreement and the implementation of this Protocol generally;
h. help Community Enterprise in their negotiations with Member States with a view to obtaining the most favourable fiscal regime, incentives and privileges in force in the Member States concerned.
Article 11. Selection Panel
1. There is hereby established a Selection Panel which shall consist of one representative from each Member State who may be assisted by advisers.
2. It shall be the responsibility of the Selection Panel:
a. to examine al applications for the admission of enterprises to the status of Community Enterprises submitted to it by the Executive Secretariat and make recommendations thereon to the Council;
b. to deal with any complaints or objections affecting an Approval Agreement or the performance and conduct of a Community Enterprise.
Article 12.
ROLE OF THE COUNCIL
The Council shall:
a. admit enterprises to the status of Community Enterprises in accordance with the provisions of this Protocol;
b. determine the basis and the rate for calculating the Community Levy as provided for in paragraph 1 of Article 14 of this Protocol;
c. approve the use of the proceeds of the Community Levy as provided for in paragraph 3 of Article 14 of this Protocol;
d. cause the suspension or cancellation of an Approval Agreement where a Community Enterprise has been fraudulent or acts contrary to the provisions of this Protocol;
e. determine registration fees to be paid by Community Enterprises as provided for in paragraph (b) of Article 10 of this Protocol;
Article 13. Duties of a Community Enterprise
1. All enterprises which have been admitted to the status of Community Enterprises in accordance with the provisions of this Protocol shall:
a. submit progress reports, annual balance sheets and audited accounts to the relevant authorities of the Member States involved in the project with copies to the Executive Secretariat;
b. furnish the Member States and the Executive Secretariat with information relating to the fulfilment of the conditions of any permit and the extent to which benefits and permits have been utilised;
c. offer services or manufacture products within the Community of acceptable quality at competitive prices and in sufficient quantities;
d. inform the Executive Secretariat of nay intended deviations form or difficulties in the implementation of the terms of an Approval Agreement, so as to enable any necessary reassessment to be made between the parties to the Approval Agreement;
e. comply with such audit as may be requested by the Executive Secretariat in collaboration with the relevant authorities of the Member State where they are located in order to ascertain compliance with the terms of the Approval Agreement;
f. comply with such other conditions as may be imposed by the Council;
g. for all other necessary purposes, co-operate fully with the representative of the Executive Secretariat and the Member States;
h. not fix or alter the prices of its product or services without prior consultation with the Executive Secretariat and the competent authorities of the Member States where they are located.
2. All shareholders of a Community Enterprise shall be entitled to a vote and to be informed about the activities of the enterprise.
3. No dealings in the shares of a Community Enterprise shall take place without the approval of its Board of Directors and in no case shall such dealings head to a reduction of the equity capital of nationals, legal persons or governments of the Member States below the level prescribed in items (i) and (ii) of sub-paragraph (a) of paragraph 1 of Article 3 of this Protocol. All valid dealings in its shares shall be notified to the Executive Secretariat.
4. Any decision relating to the alteration of the instrument of incorporation, increase and reduction in the capital and dissolution of a Community Enterprise, appointment and removal of members of the Board of Directors and change of location of the headquarters of a Community Enterprise shall previously be notified to the Executive Secretariat.
5. All changes in the structure of a Community Enterprise that may reduce the effective control of citizens of the Community or nationals of the Member States in the day to day administration of that enterprise shall not be permitted.
Article 14. Community Levy
1. In addition to such national taxes as a Community Enterprise may be subject to in a Member State where its headquarters is or where it has autonomous branches, subsidiaries or affiliates a Community enterprise shall pay directly to the Community an annual Community Levy the basis and rate of which shall be determined by the Council, taking into consideration
The level of development of the different Member States in accordance with the provisions of Article 4 of Decision A/DEC.1/5/83 of the Authority.
2. Notwithstanding the provisions of paragraph 1 of this Article, the Council may exempt a Community Enterprise from the payment of Community Levy for such period and in respect of such activities as it may determine.
3. The Community Levy paid in pursuance of the provisions of paragraph 1 of this Article shall be kept in a Special Facility of the Fund and the use of such Special Facility shall be determined by Council.
4. Regulations relating to the application of the provisions of this Article including the computation of Community Levy, exemption from or deferment of payment of Community Levy and other allowances shall be made by the Council.