Lex Africa Guide 2012 Full - Afrer.org

obtain a business license (within seven days).Exchange ControlsForeign exchange transactions are controlled by the Ministry ofFinance which may in some cases delegate its powers pertainingto overseas operations to certified intermediaries (i.e.commercial banks).The Communauté Economique et Monétaire de l’AfriqueCentrale (CEMAC) provides that overseas fund transfers aresubject to the payment of a 0.50 % commission to a certifiedintermediary (i.e. a bank). The opening of foreign accounts inFCFA for the benefit of non-residents is free in the CEMAC.Almost all foreign exchange transactions need to be performedbefore certified intermediaries which have to verify thecompliance of documents with applicable laws.TaxationThe following mandatory taxes are payable by companies:corporate income tax based on turnover is paid at 40%(statutory tax rate);taxes on financial transactions are 2.5% per cheque;social security contributions are 15.8% of gross salaries;apprenticeship tax for more than 60 employees is 2% ofgross salaries;stamp duty (fixed fee);Value Added Tax (VAT) with a 19% rate;property taxes (15%).Imports/ExportsMost imported products are food, textiles, petroleum products,machinery and electrical equipment. Exported goods includediamonds, timber, tobacco, coffee, cotton and bananas. Adeclaration needs to be submitted on imports and exports to theMinistry of Commerce and/or the Ministry of Finance.Exemptions are awarded for specific products such as thosecoming from member countries of the Central African Economicand Monetary Union (CEMAC).Monetary PolicyThe Banque des Etats de l’Afrique Centrale (BEAC) seeks toensure monetary stability. To that end, instruments have beenput in place to manage interest rates and require creditinstitutions to reserve funds to manage the money supply.Legal SystemThe legal system is based on the French civil law system. Thereare several criminal and civil courts as well as a court of appealsin Bangui. The highest court is the Supreme Court in Bangui,whose members are appointed by the President. There are alsoprovisions for a High Court of Justice, a body of nine judgescreated to try political cases against the President, members ofCongress and Government ministers, which has however neverbeen convened.A constitutional court consists of nine judges appointed for nineyearterms (three by the President, three by the NationalAssembly and three by fellow judges) and assists the SupremeCourt and the High Court of Justice. There are also courts ofappeal, criminal courts, several lower tribunals and a militarytribunal. The legal system is loosely based onthat of France, with some traditional courtsstill operating on the local (subprefecture)level.Intellectual PropertyCAR is a member of the African Intellectual PropertyOrganization, which protects several intellectual property rightswithin its member countries such as patents, utility models,trademarks, industrial designs, trade names, geographicalindications, copyright, unfair competition, circuit layouts andplant variety rights.Key Strategic Growth Initiatives by Government/Private SectorThe Government has initiated a programme of economicreform, including the privatization of some sectors associatedwith the International Monetary Fund called the “ExtendedStructure Adjustment Facility”.Treaties and Bilateral AgreementsCAR is party to the treaty establishing the Economic Communityof Central African States (ECCAS) and the New York Conventionon the recognition and enforcement of Foreign Arbitral Awards.It has acceded to the Kyoto Protocol on climate change.Membership of International & Regional OrganisationsThe CAR is a member of the African Union (AU) and accordinglypart of its New Partnership for Africa’s Development (NEPAD)program. The World Bank has assisted CAR with its foreign debts.CAR is also a member of the Communauté Economique des Etatsde l’Afrique Centrale (CEEAC) and CFA Franc Zone.Road and TransportThe CAR has no railroads and only 600 kilometres of the25 000 kilometres of roads are paved. Dirt roads are poorlymaintained and deteriorate in the rainy season. No organisedpublic transport is available because the country’s poorinfrastructure drives up the cost, thereby discouragingcommerce and investment. The country relies on waterways(the Ubangi and other rivers) for communication and commerce.About five-sevenths of foreign trade is shipped by river. Thereare about 4 400 miles (7 000 km) of inland waterways, thoughonly some two-fifths of these are navigable. The Ubangi–middleCongo route is the main international transportation link withthe outside world. This course is navigable most of the year fromBangui to Brazzaville, Congo, and from there goods are shippedby rail to Congo’s Atlantic port of Pointe-Noire.EnergyThe country’s waterfalls are sources of hydroelectric power, anddams located on the Mbali Lim River northwest of Banguiproduce about four-fifths of the country’s electricity.TelecommunicationsLegislation liberalising the telecommunications sector in theCAR was passed in January 1996 and has, to date, resulted incompetition in mobile communications and the entry of severalvalue-added service providers.The proposed regulatory body, Agence de Régulation desTélécommunications (ART), formed by the TelecommunicationsAct, is not operational and regulatory duties are presentlyhandled by the Ministry of Posts, Telecommunications and NewTechnologies.The company, Société Centrafricaine de Télécommunications(Socatel), was established after the integration of the SociétéCentrafricaine des Télécommunications Internationales (Socati)and the Direction Générale des Télécommunications (DGT) in1990. In 1995, the Government sold 40% of Socatel to FranceCable and Radio (FCR).20