Title
COMMUNITY INVESTMENT CODE OF THE ECONOMIC COMMUNITY OF THE GREAT LAKES COUNTRIES (CEPGL)
Preamble
The Government of the Republic of Burundi,
The Government of the Rwandese Republic,
The National Executive Council of the Republic of Zaire,
Having regard to the Convention of 20 September 1976 establishing the Economic Community of the Great Lakes Countries (CEPGL), and in particular articles 2 and 3 of that Convention;
In view of the Agreement of 31 January 1982 establishing the Community Investment Code of the Economic Community of the Great Lakes Countries (CEPGL);
HAVE AGREED AS FOLLOWS:
Body
Part I. General Provisions
Chapter I. Objectives
Article 1.
Within the framework of the Economic Community of the Great Lakes Countries (CEPGL), hereinafter referred to as the Community, the Community Investment Code aims to define the guarantees, rights, obligations and advantages of joint enterprises and Community enterprises and the obligations of the member States of the Community vis-a-vis such enterprises.
Chapter II. Definitions
Article 2.
For the purposes of this Code:
a) A joint enterprise means a business entity which is a joint proprietorship of all the member States of the Community or in which they hold at least a 51-per-cent majority of the shares, and which is under joint management and financing and has joint decision-making bodies;
b) A Community enterprise means a business entity which meets the following criteria:
i) The criterion of substantial available resources
The enterprise must turn to account either available resources belonging to at least
Two member States or a sufficiently large amount of resources from a single member State the use of which, however, involves another member State of the Community.
ii) The criterion of market size
This criterion is met when the viability of the enterprise requires access to a market broader than that of the host country.
iii) The criterion of volume of investments
The enterprise must show a minimum amount of investment as stipulated in the Community Investment Code.
Iv) The criterion of the nature of the investments
The nature of the investments makes it possible to assess the technological aspects of the enterprise in terms of the objectives being pursued by the Community in its development plan.
v) The criterion of the cost-effectiveness threshold.
This criterion is met when the total estimated returns of the enterprise are higher than the total of its start-up costs and the costs of its sound operation.
Article 3.
For purposes of the application of this Code:
a) The term "national" means any natural or juridical person having the nationality of the CEPGL member country in which the Community enterprise or joint enterprise has been established;
b) The term "Community national" means any natural or juridical person having the nationality of one of the CEPGL member countries;
c) The term "foreign national" means any natural or juridical person not a national of one of the member countries of the Community;
d) The term "worker" refers to any person deemed to be an employed person or in the same category as an employed person under the legislation of the host country;
e) The term "legislation" refers to the laws and regulations of any of the CEPGL member countries;
f) The term "host country" refers to the country in which the Community enterprise or joint enterprise has been established;
g) The term "authorization document" refers to a legal act issued by a competent authority of the Community in the form of an enforceable decision, which notifies the requesting enterprise of the terms of the authorization;
h) The term "founding agreement" refers to a contract concluded between a competent authority of CEPGL and an enterprise authorized under basic regime II, in accordance with the conditions set forth in this Code.
Article 4.
Under this Code, the Community enterprise or joint enterprise may be:
a) An enterprise with national capital, if the invested capital consists of resources mobilized in a member State of the Community and belonging to either nationals or foreign nationals;
b) An enterprise with intra-Community capital, if the majority of the invested capital consists either of a contribution by at least two member States or of a mobilization of financial resources more than half of which belong to natural or juridical persons from more than one member country of the Community;
c) An enterprise with foreign capital, if the majority of the capital invested within the Community consists of resources originating outside the Community and belonging to natural or juridical persons who are foreign nationals;
d) An enterprise with mixed capital, if the invested capital consists of a pooling of national or intra-Community capital and foreign capital.
Article 5.
Under the terms of this Code, Community enterprises or joint enterprises fall into the following categories:
a) Enterprises specializing in the area of economic infrastructure, in particular: water-resource development, bridge construction, road links, ports, communications networks, power-distribution systems and irrigation projects;
b) Enterprises engaged primarily in the development and processing of local resources;
c) Import-substitution enterprises;
d) Service enterprises, in particular: ground, air, river and maritime transport services,
Maintenance and inspection services, tourism activities, financing, insurance and reinsurance
Operations;
e) Any other enterprise deemed to have priority by the competent bodies of the Community.
Chapter III. Guarantees
Section I. General Guarantees
Article 6.
As provided by this Code, the freedom to form and invest capital shall be guaranteed to any natural or juridical person wishing to establish an enterprise in the territory of one of the member States.
Article 7.
Acquired rights of all kinds to individual or collective property shall be guaranteed to all natural or juridical persons, without discrimination either among foreign nationalities or among foreign nationals and nationals. Such rights may not be prejudiced except in the public interest and in accordance with the principles of international law, and subject to the payment of fair and equitable compensation to the injured holder of such rights.
Article 8.
Subject to compliance with existing legislation governing exchange regulations, the CEPGL member States shall guarantee the freedom to transfer capital accumulated in regulated markets, duly earned profits and funds arising from share transfers or from the cessation of business by an enterprise.
Article 9.
Enterprises with intra-Community capital, foreign capital or mixed capital shall be entitled to acquire rights of all kinds as needed for the conduct of their operations - property rights, industrial rights, and administrative licences, authorizations and permits - under the same conditions as enterprises of the host country.
Article 10.
Community enterprises with foreign or mixed capital shall enjoy the same rights and receive the same protection as enterprises with intra-Community capital. These rights extend to patents and trade marks, trade descriptions and labels, and any other industrial property. Such enterprises shall not be subject to any discrimination under the law.
Article 11.
In the performance of their work and in accordance with the legislation of each State,
a) Workers who are Community nationals shall be governed by labour legislation and social laws under the same conditions as nationals. They may participate in trade union activities and belong to bodies defending employee rights. They shall be further governed by the general agreement on social security between the member countries of the Community;
b) Enterprises with foreign capital and the directors thereof shall be represented in organizations representing professional and business interests under the same conditions as enterprises or nationals of member countries of the Community.
Article 12.
Within the framework of this Code, workers who are Community nationals or foreign nationals shall not be liable as individuals to duties, charges and assessments, regardless of their denomination, which are other or greater than those levied on nationals.
Section II. Special Guarantees for Foreign Capital
Article 13.
Within the scope and under the terms of the exchange regulations and subject to the fiscal legislation of the host country, all enterprises with foreign capital or mixed capital authorized as Community enterprises or joint enterprises shall be accorded by the host country:
a) A guarantee regarding the transfer of:
i) The return, in the form of dividends or profits, on foreign capital invested in cash or in kind or in the form of know-how;
ii) The reimbursement of the principal and interest on loans contracted abroad and invested in the undertaking;
iii) The cost of indispensable technical assistance from abroad furnished to the undertaking and directly related with the undertaking's operations in the Community;
Iv) The business income of expatriate officials employed by the undertaking in the Community, directors' percentage of profit and foreign auditors' fees;
b) A guarantee that they will obtain, from the Central Bank, at least the foreign currency required to import the raw materials and spare parts which will ensure the production intended for the Community; the same shall apply to production aids, that is, products which are indispensable for manufacture and which are destroyed or lose their specific characteristics in the course of direct manufacturing operations.
Chapter IV. Authorization
Article 14.
In order to be included under basic regime I or basic regime II, any enterprise as defined in articles 2 and 5 of this Code must receive authorization from the competent authority of CEPGL.
Section I. Conditions for Authorization
Article 15.
Any joint enterprise or Community enterprise conducting or wishing to conduct operations in the territory of a CEPGL member State either in order to rationalize its production methods or for purposes of modernization or extension may qualify for a decision authorizing inclusion under a preferential regime if it meets the criteria provided for article 2.
The minimum volume of investments is set at one million United States dollars or the equivalent.
Section II. Authorization Procedure
Article 16.
Community enterprises or joint enterprises as defined in article 2 (a) and (b) must direct any request for inclusion under an advantageous regime to the Permanent Executive Secretariat of CEPGL, which shall, pursuant to article 19 of the Convention establishing CEPGL, be responsible for transmitting the dossier to the competent bodies of the Community.
The Conference of Heads of State has the competence to issue an authorization. The authorization decision shall be notified to the enterprise by the Permanent Executive Secretariat of CEPGL.
Article 17.
The authorization request shall be accompanied by a supporting dossier in twelve copies, which shall include at least the following information:
a) The legal status of the enterprise;
b) A technical dossier specifying planned activities, the origin, extent and nature of the raw materials, the product quality and price, the production planning, the plan, the facilities, and the patenting, licensing and all other aspects of know-how;
c) An economic and financial dossier specifying the volume of investments, the sources of funding, the capital of the enterprise, the available credit, its market, the number of posts, and a forward study of economic and financial earning power;
d) The start-up date for the project.
If the dossier is complete, the Permanent Executive Secretariat shall transmit two copies to each CEPGL member State.
Section III. Authorization Document
Article 18.
The authorization document shall:
a) Specify the preferential regime under which the authorized enterprise is included;
b) List the activities for which authorization is granted;
c) Indicate the advantages granted, the period during which they will be in force and the
Procedures for their application;
d) Specify the obligations incumbent upon the enterprise, especially with regard to the
Programme for meeting its goals;
e) Determine specific arbitration procedures.
Article 19.
The authorized enterprise shall agree to:
a) Carry out the investment programme for which it was established;
b) Maintain product quality;
c) Keep regular accounts of the kind provided for under the legislation of the host country;
d) Agree to any inspection and monitoring by the host country and by the competent body of CEPGL;
e) Reply within the period specified to all questionnaires and requests for statistics;
f) Respect and ensure staff rights;
g) Establish and keep to a programme for training local manpower and promoting the advancement of managerial staff who are nationals of the member countries of the Community;
h) See to the protection of the environment;
i) Develop local resources;
j) Give priority to furnishing supplies to the CEPGL member States in times of scarcity in the same proportions as in normal times;
k) Give priority to earmarking for member States of the Community the export of the goods produced.
Article 20.
All operations of an authorized enterprise which are not explicitly included in the activities listed in the authorization document shall continue to be governed by the tax-related and other provisions of ordinary law in force in the host country.
Article 21.
Authorization for inclusion under an advantageous regime does not exempt the authorized enterprise from compliance with the political, financial, fiscal and social legislation of the host country.
Part II. ADVANTAGES OFFERED BY THE DIFFERENT AUTHORIZATION REGIMES
Article 22.
There are two authorization regimes which may be granted by the CEPGL authority:
- Basic regime I
- Basic regime II
Chapter I. Authorization Under Basic Regime
Article 23.
Any enterprise as defined under article 2 which meets the conditions for authorization under this Code may benefit from the economic, financial and tax advantages provided for under basic regime I as hereinafter established.
Section I. Economic Advantages
Article 24.
An authorized enterprise may receive financing for the conduct of pre-investment and investment studies from public credit institutions and more specifically from the Development Bank of the Great Lakes States.
It may also take advantage of the technical assistance and consultancy services of the CEPGL member countries, international agencies or foreign countries.
Article 25.
Where necessary, special customs protection measures may be instituted for the benefit of Community enterprises and joint enterprises.
Article 26.
All other things being equal, priority in the award of public services contracts shall be given to the extent possible to authorized enterprises as against enterprises which are outside the Community.
Article 27.
Subject to the regulations of the central banks of the CEPGL member countries concerning foreign exchange, authorized enterprises shall be given priority in the allocation of foreign currency in order to purchase capital goods, raw materials, products and packaging required for their operations.
Section III. Tax Advantages
Article 28.
Basic regime I shall include, for a maximum period of five years for an enterprise, the benefit of the following measures:
a) The application of a single overall import duty and tax rate of between 0 and 5 per cent on equipment and materials, machines and tools which are specifically required for product production and processing;
b) Partial or complete exemption from import duties and taxes and indirect taxes levied inside the Community on: