WT/TPR/S/27
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III. ANALYSIS OFTRADE POLICY INSTRUMENTS
(1) Introduction
1. Thetraderegime isaliberal one.Average import duties areunder 14percent,andquantitative
restrictions wereabolished in1988onalmost allimports andexports. Theauthorities havenever applied
anti-dumping orcountervailing measures, orsafeguard measures. However, inspiteofthecountry 's
essentially commercial vocation, administrative andcommercial formalities attheborder arecomplex
andslow, andprone toirregularities, making Benin anditsportlessattractive, incomparison toother
ports intheregion, asacentre forthetransit ofgoods towards theland-locked countries ortowards
theimportantmarketofNigeria.Theproblemsmostoftenmentionedarelackoftransparencyincustoms
procedures andlackofefficiency ofportservices (Chapter IV).1
2. Trade policy intervention isconsiderably limited bytheexistence ofnumerous possibilities
forparallel trade, sinceanyrestrictive measure could simply shiftthenewly regulated activities towards
theinformal sector. Thus, although there isnolegislation withrespect tocompetition, theeconomic
climate iscompetitive andtheenterprises, often inadominant position, donotgenerally seem tobe
inaposition toengage inabusive pricing, sincethiswould simply shiftdemand towards parallel imports.
3. Adisturbing aspect ofthelackoftrade regulation characterizing theinformal sector consists
intheproliferation ofpirated andcounterfeit goods, orgoods which violate intellectual property rights
insome other way, inparticular medicaments. Theauthorities, aware ofthedanger topublic health
andsafety ofcounterfeit andother uncontrolled goods haveembarked onarevision oftheirintellectual
property legislation andthemeans ofenforcing thatlegislation.
(2) Measures directly affecting imports
(i) Customs formalities
(a) Registration anddocuments
4. Persons wishing toimport goods forcommercial purposes must obtain animporter 'scard,
which serves asaprofessional trader 'scard, from theMinistry ofTrade, Handicrafts andTourism
andmust joinandpayitscontributions totheChamber ofTrade andIndustry. Animporter 'scard
costs CFAF 30,000. Theannual contribution tobepaidtotheChamber ofTrade andIndustry for
thefirstyearisCFAF 50,000 fornationals andCFAF 150,000 forforeigners. Forthefollowing year,
contributions aredetermined according toturnover.2However, in1996, 23percentofimports were
carried outby"occasional" importers whodidnothaveanimporter 'scardanddidnotfulfil anyof
these requirements.
5. Goods areimported either directly bythebuyer, orthrough approved customs agents (or
forwarding agents) whoprovide customs withadetailed goods declaration. Thedocuments required
forcustoms transactions aretheimporter 'scard; thepurchase invoice; thefreight invoice; theinvoice
1AccordingtotheMinisterofFinance,long-termGovernmentactionaimsat"curbingtaxevasionbycontrolling
andmonitoring imports" (Jeune Afrique No.1893, 16-22 April 1997).
2Contributions arehighest atthelower endoftheturnover range (forexample, 2percentforaturnover
ofCFAF 1,000,001) andlowest atthehigher endoftheturnover range (forexample, 0.03percentforaturnover
ofCFAF 4billion).Republic ofBenin WT/TPR/S/27
Page 27
showing theinsurance premium; thecertificate oforigin; thecustoms valuation certificate (see
section (c)below: Customs clearance) and,where applicable, thephytosanitary certificate.
(b) Inspection andcustoms valuation
6. Asystem ofmandatory preshipment inspection wasintroduced in1991.3Since October 1994,
thecompany BIVAC hasbeenresponsible forinspecting allimports, withtheexception ofthose under
customs transit ortemporary admission regimes andthose carried outbythe"occasional" importers
whose f.o.b. value exceeds CFAF 3million (2million inthecaseofimports byland), apart from a
listofproducts specified bydecree.4Worn clothing andother worn articles areinspected whatever
theirdeclared value. Theinspection, which takes place intheexporting country, concerns theprice
andquantity ofthegoods andtheircompliance withthestandards andregulations inforce, where
suchstandards andregulations exist(seesection (v)below: Standards andecological andothertechnical
requirements).5BIVAC determines thetariff heading onthebasis ofwhich thecustoms duties are
calculated aswellasthecustoms value.6Itreceives fromtheStateafeeamounting to0.85percent
ofthef.o.b. value ofimports, withaminimum ofCFAF 100,000 perinspection report issued.
7. Iftheresults oftheverification areconsidered satisfactory, BIVAC provides theimporter with
acustoms valuation certificate. Theimport duties arecalculated bycustoms, inprinciple onthebasis
ofthetaxable customs value ascertified byBIVAC.7According toBIVAC, inthevastmajority of
cases thatvalue isthetransaction value indicated ontheinvoice, andlessthan10percentofimports
invalue terms havetobecorrected bytheBIVAC. These corrections essentially concern worn clothing
andother worn articles, aswellasother goods cleared through customs inBenin andre-exported,
apparently informally, chiefly toNigeria.
8. Theauthorities indicated thatBenin didnotmaintain fixed reference prices forimports as
provided forintheCustoms Valuation Agreement. Benin hasnothadrecourse tothedelayed application
3BeninnotifiedtheWTOofitslawsandregulationsinconnectionwithpreshipmentinspection(WTOdocument
G/PSI/N/1/Add.5 of3February 1997).
4These products include, inter alia,precious stones andmetals, explosives andpyrotechnic products, arms
andammunition, secondary metals, works ofart,developed cinematographic films, current newspapers and
periodicals, personal effects andusedarticles, including usedvehicles, grants from international institutions,
commercial samples, medicaments andpharmaceuticals, usedtyres, liveanimals, fresh orartificial plants and
cutflowers, fresh orchilled foodstuffs andgoods exempted from duties andtaxes.
5Under theAgreement onPreshipment Inspection, WTO Members must ensure thatpreshipment inspection
entities conduct price verification according totheobligations setforth intheCustoms Valuation Agreement.
6Benin continues toapply thenomenclature oftheCustoms Cooperation Council forcommodity description
andcoding.
7Under theAgreement onImplementation ofArticle VIIoftheGeneral Agreement onTariffs andTrade
1994 (Customs Valuation Agreement), thatvalue istheprice actually paidorpayable forthegoods imported.
Thecustoms authorities canonlymodify thetaxable value incaseofpresumed under- orover-invoicing under
theconditions andaccording tothearrangements setforth intheAgreement (however, seesection (c)below:
Customs clearance).WT/TPR/S/27
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oftheprovisions oftheAgreement available todeveloping country members (Article 20).8However,
ithasnotadopted thedefinition ofcustoms valuation provided intheAgreement. Asithasnotreceived
thedraftnewCustoms Code, theSecretariat isnotinaposition toassume thatBenin willbeadopting
thatdefinition.
(c) Customs clearance
9. Customs clearance procedures arecomputerized onthebasis oftheSYDONIA System.9
According totheauthorities, customs formalities takenomore than48hours. Incaseofdisagreement
astotheamount ofthecustoms duty, theimporter may, inprinciple, appeal toanyofthecompetent
courts against thedecisions ofthecustoms authorities, including thecourt ofappeals. Arecent study
recommended thecreation ofacourt ofarbitration, particularly forcases where thecustoms authorities
havemodified thevalue ortheduties tobelevied inrelation totheamounts established bytheinspection
company.10According tothisstudy, computerization hasnoteliminated fraudulent practices inthe
areaofcustoms clearance, since officials mayintroduce falsefigures andratesorinexistent bonds
enabling thegoods tobecleared without payment ofduty. Thisproblem isaggravated bythefact
thatitisdifficult toconsult orobtain acopyofthetariff atcustoms, andthepossibility ofchecking
thelegalbasis fortheduties applied bythecustoms officials istherefore limited.11
(ii) Import duties
10. TheMFNimportdutyconsistsofafiscaldutyandtheCommunitysolidaritylevy(PCS),customs
duties having beensuspended in1978. Internal taxesarealsolevied onimports atcustoms. Asignificant
liberalization oftheimport regime in1991 andagain 1994 made itpossible tonarrow therange and
reduce theleveloftaxes, duties andother levies onimports. Thenumber ofdifferent ratesoffiscal
duty, which isthemainimport duty, dropped from15to5.Thedecrease incustoms receipts caused
bythelowering ofrateswaslargely compensated byimproved collection ofduties andtaxes dueand
toabroadening ofthetaxbase.
11. Thecollection rateofcustoms revenues (i.e.theratioofcustoms revenues totheimport value)
varies from25to30percent,andincludes notonlyimport duties assuch, butalsoVAT (18percent),
theflatratecorporate tax(atleast3percent,seebelow) andtheportexitduties. Payment ofthefiscal
dutyandother import duties would seem tobesubject toaconsiderable number ofexemptions and
8However, imported usedcarsarevalued atCFAF 600,000 minimum. Benin hasalarge usedcarmarket
based ontheimport ofvehicles subsequently re-exported toNigeria andother neighbouring countries. The
conditions fortrading inusedvehicles arelaiddown bydecree. However, anewdecree regulating theimport
andmarketing ofusedequipment andcapital goods isinthefinal stages ofpreparation. Theaimofthisnew
legislation andtheconcrete changes expected have notbeen communicated totheSecretariat.
9TheSYDONIA automated customs system wasintroduced inBenin withthehelpoftheCommission of
theEuropean Communities intheframework ofitsstatistical cooperation activities inthefieldofforeign trade.
ThePROLOGUE software wassupplied tothecustoms authorities byUNCTAD. Inprinciple, itenables customs
tomanage customs tariffs, customs regulations anddatabases. With respect tocustoms clearance, SYDONIA
helps tohandle thecompilation andcontrol ofdatacontained indeclarations, toverify theassessment ofduties
andtaxes andtomanage customs accounting.
10Société françaisedeconseil endéveloppement (1994) .
11According totheDirection générale desdouanes etdroits indirect s(General Directorate ofCustoms and
Indirect Duties -DGDDI), copies ofthetariff maybeconsulted intheiroffices orattheChamber ofTrade and
Industry, orobtained from anauthorized customs agent.Republic ofBenin WT/TPR/S/27
Page 29
immunities: in1996, ofatotalofCFAF 79billion collected bycustoms (i.e.47percentofthetotal
revenue entered intheState'sflow-of-fund table), import duties represented CFAF 21billion, i.e.
approximately 8percentoftotalimports ofgoods.12Theduties collected bycustoms playmore of
afiscal rolethanatrade protection role.
(a) Nature andlevelofMFN duties
12. Benin grants atleastMFN status toallcountries. Itapplies onlyadvalorem import duties.
Benin doesnotapply seasonal customs duties, tariff quotas orvariable levies.
13. TheMFN import dutyiscurrently composed ofafiscal dutyof0,5,10,15or20percent
andthePCSof1percentintended tocover thelossofrevenue duetopreferential agreements (see
Chapter II).
14. Thestructure ofimport duties isshown inChart III.1. Theunweighted average import duty
is13.1percent. Dispersion isnarrow, withastandard deviation of6.4percentandlittledifference
between categories ofproduct. Themaximum import dutyis21percent(fiscal dutyplusPCS). About
4percentofthetariffitems correspond toimports freeoffiscal duty(i.e.subject toPCSonly). Rice
andtextile products, interalia,areexempted from fiscal duty.
15. Tariff escalation isreversed, withanimport dutyonfinished products (12.8 percent)onaverage
lower thantheaverage dutyonintermediate products (15.2 percent). Although thiscould, inprinciple,
haveanegative impact ontheproduction offinished products, theeffective protection ratesarelikely
tobepositive because oftheexemptions granted tofirms fromduties payable ontheirinputs (seebelow).
16. Several other taxes arelevied bythe"customs cordon" (Table III.1). Aswehaveseen, the
different levies increase theoverall costofimports, withpotential effects onproduction andre-exporting
costs.
17. Thecollection ofVAT andother internal taxes onimported goods istheresponsibility ofthe
customs administration. VAT wasintroduced in1991 atasingle rateof18percent. Itislevied on
thesalesofmost goods andservices, including those thatareimported. However, many consumer
goods areexempted.13VAT onimports iscalculated onthebasis ofthec.i.f. price plustheimport
duty(fiscal dutyandPCS).
12Theshare ofexempted imports intheoverall value ofimports, however, went from 24percentin1994
to26percentin1995, and16.4 percentin1996.
13Thefollowing areexempted: resale intheexisting state, medical consultations, cement, construction of
firstresidence, printing andpublication ofperiodicals, salesofnon-profit institutions, passenger transport firms,
financialservices,transactionssubjecttoregistration(forexample,transferofpropertyorlifetenancy),construction
oflow-cost housing, medicaments andother pharmaceuticals, school books, stamps andstamped paper, water
consumption uptoacertain amount, bread, maize, seedpotatoes andvegetables, millet andother cereals, cocoa,
fishandfood industry waste, breeding animals, tobacco, milk, andtelephone calls uptoCFAF 10,000.Republic ofBenin WT/TPR/S/27
Page 31
Table III.1
Summary ofcharges made onimports clearing customs intheautonomous portofCotonou, 1997
Description Amount of
chargeEstimated
advalorem
equivalentCumulative
value
1. C.i.f. value before portexitduties andtaxes: n.a. n.a. 100
Lighterage -maintenance CFAF 1,000/t 0.4a100.4
Portcharges CFAF 1,300/t 0.52a100.9
National Dockers Council ofBenin CFAF 300/t 0.12a101.0
SONAR insurance 1% 1.0a102.0
2. C.i.f. value before import duties charged bycustoms: 102.0
Taxduty(brought forward toheading 2) 0-20% 0-20.0 102.0-122.9
Community solidarity levy(brought forward toheading 2) 1% 1.0 103.4-123.9
3. C.i.f. value aftercustoms clearance before internal taxes charged by
customs:103.4-123.9
VAT (brought forward toheading 3) 18% 18.0 122.0-146.2
Standard advance payment (brought forward toheading 3) 3-5% 3.0-5.0 125.1-153.5
4. C.i.f. value aftercustoms clearance andaddition ofinternal taxes n.a. n.a. 125.1-153.5
n.a. Notapplicable.
a WTO Secretariat estimate.
Source: Beninese Government.
18. Thecustoms authorities alsolevyastandard advance payment onindustrial andcommercial
profits atarateof3percentofthec.i.f. value plusimport duties forcompanies registered withthe
INSAE14,which candeduct thislevyfrom theirtaxes attheendofthefiscal year. Fortheother
importers (chiefly from theinformal sector), theadvance payment amounts to5percent, is
non-refundable, andtherefore constitutes animport duty. In1996, duties thuscollected totalled
CFAF 5.7billion, or2.3percentofthetotalvalue ofimports.
19. Inaddition toVAT, specific internal taxes arelevied onanumber ofproducts:
- Taxonhydrocarbons: 20percentoftheretail price ofpetrol (diesel: 0.5percent,
lubricants: 2percent);
- domestic taxonlocally produced beverages: 13percentofsalesprice;
- taxoncement: 1.1percent;
- taxonlocally milled wheat flour: 1.2percent;
- taxontextiles manufactured andconsumed inBenin: 6percent; and
- taxonlocally produced soap: 5.5percent.
These taxes raiseanumber ofquestions concerning fiscal policy, which seems toputlocalproduction
atadisadvantage withrespect toimports (with theexception ofcement imports, which areprohibited),
inthattheinternal taxincreases therelative price.
14Institut national delastatistique etdel'analyse économique (National Institute forStatics andEconomic
Analysis).WT/TPR/S/27
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(b) Binding ofduties intheframework ofGATT/WTO
20. During anassessment ofitstechnical assistance needs, theGovernment noted theneedto
renegotiate itstariff concessions made prior totheUruguay Round.15Indeed, Benin 'sschedule of
tariff concessions, annexed totheGeneral Agreement in1964 (inSchedule XLVIII), were never
renegotiated inspiteofsignificant tariff changes. Forcertain products, theratesapplied in1997 are
higher thantheratesbound in1964 (Table III.2). According totheauthorities, however, theduties
forwhich therateswerebound in1964 arethecustoms duties, whose application wassuspended in
1978. Butthefiscal duty, which, according totheauthorities, isnotcovered bythese bindings,
nevertheless constitutes adutylevied exclusively onimports atdifferent ratesaccording totheproduct,
anditwasbound within framework oftheUruguay Round.
21. Intheframework oftheUruguay Round, allimport duties (fiscal duty, customs duty, PCS)
applicable toagricultural goods (Annex IoftheAgreement onAgriculture) were bound ataceiling
of79percentasof1995, withtheexception ofduties already bound inSchedule XXVIII of1964
mentioned above andcertain tariff linesbound ataceiling of119percent.16
22. Import duties onmostindustrial products werenotbound within theframework oftheUruguay
Round, withtheexception ofcertain mineral substances.17Aswithagricultural products (Table III.2),
bindingsresultingfrompreviousroundsofnegotiationshavetheforceoflaw.However,theGovernment
hasnotnotified theWTO ofitsintention torenegotiate itsoldbindings.
(c) Tariff preferences andrules oforigin
23. Benin participates intwoprojects fortheliberalization ofregional trade: onewithin the
framework ofECOWAS andtheother within theframework oftheWAEMU.
24. TheWAEMU Customs Union, scheduled toenter intoforce on1January 1998, involves a
common external tariffwithcountries whose tariffandnon-tariff protection (forexample, quantitative
import restrictions), in1995, considerably exceeded thatofBenin. Acomparison between thenominal,
andaboveall,theeffectiveprotectionofnationalproduction(ChartIII.2)revealsaparticularlysignificant
gap.18Thus, acustoms union could result inageneral increase inBenin 'simport duties. Theauthorities
areaware ofthedanger ofatariff increase forBenin 'seconomy, since import andre-export under
thetransit procedure constitute asignificant share ofthecountry 'seconomic activity.
15Joint ITC/UNCTAD/WTO assessment mission, 14October 1996. According toArticle XXVIII ofthe
GATT 1994, aMember thatmodifies orwithdraws itstariff concessions must enter intonegotiations withany
other Member recognized asaprincipal supplier which sorequests, withaview toconcluding anagreement
providing forreciprocal andmutually advantageous concessions.
16Customs duties onvegetable oils,wheat starch andcornstarch were bound atarateof119percentwithin
theframework oftheUruguay Round.
17Customs andother duties were bound at50percentand19percentrespectively formostmineral substances
(Chapter 25oftheHS).
18World Bank (1996). Theeffective protection ratetakes account oftheeffect oftariff andnon-tariff trade
measures oninputs usedtoproduce thevalue-added ofagiven branch. Thenominal protection ratetakes account
ofthetariff protection applied tothefinished product only.Republic ofBenin WT/TPR/S/27
Page 33
Table III.2
Schedule ofGeneva tariff concessions (1964) andimport dutiesaimposed in1997
(Bound MFN duties shown asapercentage)
Product MFN duty
Tariff
concessions
1964Import
dutiesa
1997
Cod, salted dried cod,herring 12 10
Other fishsimply salted, dried orsmoked 0 10
Milk andcream 7 5
Wheat, speltandmeslin flour 5 15
Prepared orpreserved fish 7 5
Biscuits 5 20
Rawtobacco 25 20
Cigars, cigarettes 75 5
Foreign petroleum spirit, white spirit andkerosene 10 5
Foreign fluiddiesel andfueloil 4 5
Foreign heavy fueloil 7 5
Petroleum oilandsimilar petroleum-based lubricants 7 5
Foreign petroleum jellyandparaffin 7 5
Soap 20 20
Matches 15 20
Tyres forvehicles 25 15
Cotton fabrics 20 5
Synthetic fabrics 20 5
Woven pilefabrics andchenille fabrics ofcotton 20 10
Printed cotton fabrics 20 20
Clothing, ties 15 15
Footwear 10 15
Hats, caps, skull capsandsimilar headgear 5 15
Glassware andarticles thereof, vitrified articles 16 20
Costume jewellery 10 20
Piston, spark ignition orfuel-injected motors forautomobiles; andspare parts 25 10
Agricultural machinery andequipment 0 5
Electric generators, motors, transformers andconverters; batteries, accumulators, instruments 7 5
Torches andcases fortorches 6 10
Other electric lighting equipment 7 10
Electric equipment, lamps 7 5-10
Vehicles forthetransport ofpersons andgoods 30 5-15
Agricultural andother tractors 30 5
Vehicles forspecial uses, industrial trucks; coachwork andparts thereof 30 5-15
Bicycles, spare parts andparts ofbicycles 5 10
Petroleum spirit, white spirit, kerosene andother 7 5
Fluid diesel andfueloilfrom licensed factories intheFrench Union 3 0
Heavy fueloilfrom licensed factories intheFrench Union 5 5
White, spindle andgreasing oilandother oilsfrom licensed factories intheFrench Union 5 5
aFiscal dutyplusPCS.
Source: GATT (1964), Second certification relating totherectification andmodification ofschedules totheGeneral Agreement onTariffs
andTrade; andBeninese customs tariff.WT/TPR/S/27
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25. TheECOWAS tradeliberalization scheme consists oftwomaincomponents: theelimination,
asof1994, ofallnon-tariff barriers, i.e.licences, quotas, prohibitions andotheradministrative barriers
onanyproducts originating intheECOWAS countries; andtheprogressive reduction ofimport tariffs
(phasing outofintra-Community tariffbarriers intheirtotality). Inpractice, many tariffandnon-tariff
barriers stillstand inthewayofintra-Community trade.
26. TheECOWAStradeliberalizationschemedrawsadistinctionbetweenlocalproducts,handicrafts
andmanufactured products. Since 1January 1990, local products andtraditional handicrafts must
bepermitted tocirculate freeofallimport duties, provided theyappear onthelistoflocalproducts
andtraditional handicrafts recognized bytheCommunity andsubject tothepresentation ofacertificate
oforigin issued bythecompetent body appointed bytheexporting member country. Finished
manufactured goods originating intheCommunity areentitled totariff reductions based onanumber
ofdifferent criteria, including thelevel ofindustrial development ofeachoneofthecountries and
transport problems fortheisland andland-locked countries. ForBenin, thecomplete tariff reduction
period hasbeensetateight years starting on1January 1990; inother words, therateofreduction
is12.5percentperyear.
27. Therulesoforigin aresimilar tothose inforce within theWAEMU (seebelow). Inaddition,
national orCommunity shareholders inthecapital ofanenterprise mustrepresent atleast25percent.
Approval isobtained through theMinistry ofFinance ofBenin.
28. Imports fromWAEMU member countries areexempted fromimport duty, butsubject tothe
preferential Community tax(TPC) asfollows: localproducts andtraditional handicrafts (including
agriculture, mining products, fishandcattle) areexempted fromimport duties (i.e.theTPCiszero);
certified manufactured products (i.e.those accompanied byacertificate oforigin) benefit froma30per
centreduction onfiscal dutyunder theMFN regime (theTPCisestablished at70percentoftheMFNRepublic ofBenin WT/TPR/S/27
Page 35
fiscal duty); non-certified manufactured goods enjoy areduction of5percent(theTPCisestablished
at95percentoftheMFN fiscal dutyrate).
29. Community origin (andhence thecertificate) isattributed toproducts whose manufacture
involves Community inputs representing atleast60percentoftheoverall f.o.b. value. Forproducts
withlessthan60percentoflocalinputs toenjoy preferential treatment, domestic value-added must
account foratleast40percentofthef.o.b. price ofthefinalproduct. Nocertificate isrequired for
products other thanmanufactured goods.
30. Fewer than10Beninese firms inthecountry qualify forthese provisions. Certain products
andactivities, inparticular slaughtering, meat production andlocal assembly ofimported parts are
excluded from theAgreement.
(d) Tariff andtaxexemption
31. Under theInvestment Code, equipment, materials andsparepartsintended forapproved projects
areentirely orpartially exempted fromthefiscal duty(seeChapter II).TheLawonFinances of1995
alsoprovides forcertain exemptions: itstipulates thatrawmaterials, agricultural equipment andhand
tools, anddisposable packaging, imported fordomestic industrial needs, mayenterfreeoffiscal duty,
while imports ofother inputs bydomestic firms areforthemostpartsubject toafiscal dutyof5per
cent.
32. Inpractise, firms operating inBenin negotiate tariff andtaxexemptions withtheauthorities
onabasis of(what theyperceive tobe)theirspecific needs. Exemptions maycover import duties,
ordirect orindirect taxes, andmayinvolve significant advantages forthebeneficiary firms. The
authorities taketheviewthatunder thissystem, thefirms inquestion willatleastgenerate employment
eveniftheydonotcontribute tothebudget. However, theadhocnature ofthissystem anditslack
oftransparency canleadtoeconomic distortions andlends itself toabuse.
(iii) Anti-dumping, countervailing andsafeguard measures
33. Inprinciple, imported goods maybesubjected toanti-dumping orcountervailing duties where
theimports cause orthreaten tocause material injury toanexisting domestic industry oranenvisaged
orplanned domestic industry (Article 12oftheCustoms Code). However, while theDecree laying
down theprovisions fortheapplication ofthese duties hasnotbeenissued andBenin hasnotyet
envisaged anyparticular legislation inrespect ofsafeguards, anti-dumping duties orcountervailing
duties, theWTO Agreements onsafeguards, onanti-dumping duties andonsubsidies andcountervailing
measures became anintegral partofthecountry 'sdomestic legalsystem uponratification. Thus, they
havetheforce oflawandaredirectly applicable.
34. Inarecent communication, Benin notified theWTO thatitsGovernment didnotapply any
countervailing measures relevant totheAgreement onSubsidies andCountervailing Measures.19In
1992, because subsidized meatimports fromtheEuropean Community weredepressing thecountry 's
animal production, theauthorities drafted adecree ontheintroduction ofcountervailing duties onthe
imports concerned. However, theGeneral Directorate ofCustoms issued anegative opinion inview
oftheriskofadropinrevenue earned inconnection withtheimport andtransit ofmeatproducts.
19WTO document G/SCM/N/1/BEN/1 of13January 1997.WT/TPR/S/27
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(iv) Prohibitions, quantitative import restrictions andimport licensing
35. Quantitative import restrictions andprohibitions wereabolished byaDecree of21July1988
repealing measures prohibiting orimposing quotas onimports, withtheexception ofthecement sector,
which continues tobeprotected "owing toitsstrategic nature fortheState".20Thus, cement imports
areprohibited.
36. Imports ofcertain products, specified bydecree, mayberestricted forreasons ofpublic safety
andhealth ormorality, orbecause oftheirstrategic nature. Forexample, theimport andmarketing
ofrumps ofturkey havebeenprohibited sinceDecember 1990forhealth reasons; andthesaleofcertain
mosquito repellent spirals containing dichlorodiphenyltrichloroethane (DDT) wasprohibited in1996.21
Since 27March 1996, theimport ofbovine meatandoffals fromGreat Britain hasalsobeenprohibited.
37. Certain goods mayonlybeimported through approved importers, asforexample inthecase
ofpharmaceuticals andproprietary medicaments andoffertilizers. Theimport offertilizers, forwhich
SONAPRA hadamonopoly until1992, isnowshared between SONAPRA andprivate importers.
Telecommunicationequipmentandelectricitycaninprincipleonlybeimportedbycertainstateenterprises
(see(4)(i)-(iv) below). Imports ofpetroleum products andtheirderivatives werethemonopoly ofa
stateenterprise untilMay1995. Suchexclusive import rights created vested interests anddistortions
totheeconomy.
(v) Standards andecological andother technical requirements
38. Benin became asignatory totheAgreement onTechnical Barriers toTrade uponratifying the
Uruguay Round Agreements. Theenquiry point fortechnical regulations, standards andconformity
assessmentprocedures(Articles10.1and10.3oftheAgreement)istheMinistryofTradeandTourism.22
Noting aneedtostrengthen theirinstitutional capacities inthatarea,theauthorities requested technical
assistance intheframework oftheIntegrated Technical Assistance Programme developed bytheITC,
UNCTAD andtheWTO, withviewtosetting upalaboratory andaninformation service onquality
standards ofimported andexported products.
(a) Standards, testing andcertification
39. InBenin, thereisnostructure ordomestic procedure fordeveloping technical standards. The
authorities havenotestablished anycompulsory official standards except inrespect offoodproducts.
Adraftdecree hasbeendrawn upwhich provides foranational standardization andquality management
system, withanational centre toactastheexecutive body. Forthemoment, Beninese firms apply
foreign standards, chiefly those established bytheInternational Organization forStandardization (ISO),
theCodex Alimentarius, orother internationally recognized organizations.
40. Official foodstandards areinlinewiththeCodex Alimentarius. They areestablished through
aprocedure involving thepublic services andrepresentatives ofindustry, withthepossibility ofcalling
20WTO document G/LIC/N/1/BEN/1 of10February 1997.
21Imports ofproducts belonging tothefollowing groups aresubject toauthorization: narcotic drugs;
psychotropic substances; laboratory reagents; explosives, toxic andcorrosive substances; products subject to
spontaneous combustion; flammable substances andfuels; fertilizers ofanimal origin; radioactive substances;
liquids withaflashpoint.
22WTO document G/TBT/ENQ/5 of29April 1996.Republic ofBenin WT/TPR/S/27
Page 37
inanyperson whose expertise might benecessary. When there arenostandards intheCodex fora
given imported product, theregulations inforce intheexporting country apply. Tests arecarried out
bytheLaboratoire central d'analyse desaliments (Central FoodAnalysis Laboratory). Thetestscarried
outintheexporting countries areonlyrecognized bytheBeninese authorities iftheywereconducted
byinstitutions thathavebeenapproved bytheexporting country andappear ontheofficial listofentities
declared totheDirection del'alimentation etdelanutrition appliquée (Directorate ofFood andApplied
Nutrition -DANA) oriftheyappear onthelistdrawn upbytheITC.
(b) Sanitary andphytosanitary regulations
41. Byratifying theUruguay Round Agreement, Benin became asignatory totheAgreement on
theApplication ofSanitary andPhytosanitary Measures. ThisAgreement provides foraperiod of
fiveyears (i.e.until1January 2000) fortheleastdeveloped country Members tobring anysanitary
orphytosanitary measure thatisinconsistent andthataffects importation orimported products into
linewiththeAgreement. Benin hasnotified theWTO ofitslegislation inrespect ofphytosanitary
andphytopharmaceutical control.23
42. Health protection ischiefly theresponsibility oftheMinistry ofRural Development andthe
Ministry ofHealth. Allimports ofanimals, andanimal andplant foodstuffs areinprinciple subject
toquality control. Inspection ofanimal products iscarried outbytheState veterinary services in
accordance withtheISO9000 Reference System. Seven customs posts currently conduct plant and
plant product controls. Theinspection iscarried outbysworn inspectors from thePlant Protection
andPhytosanitary Control Service. Withrespect tolabelling andpresentation offoods, Benin applies
theCODEX STAN 1-1985 Standard. Beninese regulations require thatallinformation should be
displayed inFrench inavisible andlegible manner.
43. Phytosanitary protection istheresponsibility oftheMinistry ofAgriculture. Theimport of
plants andplantproducts may, forphytosanitary reasons, betotally prohibited orsubject toanimport
permit. Apermit fromtheMinistry ofAgriculture (Plant Protection Service) isrequired forallimports
offresh orchilled fruitandvegetables, except those from thecountries ofWestern Africa andthe
temperate countries ofEurope (asdefined byOrder No.9-128), which mayenterwithaphytosanitary
certificate from thecountry oforigin oratransshipment certificate based onthemodel provided by
theInternational Plant Protection Convention ofRome. According totheauthorities, differential
treatment ofproducts according totheirorigin isattributable totheincreased riskassociated withthe
import from distant tropical countries ofpests anddiseases hitherto unknown inBenin.
44. Theimport, manufacture anduseofpesticides (phytopharmaceutical products) aresubject
toauthorization. Applications forauthorization forsale,experimentation orofficial approval24must
beaddressed totheCommité national d'agrément etdecontrôle desproduits phytopharmaceutiques
(National Committee fortheApproval andControl ofPhytopharmaceutical Products -CNAC).
Authorizations forsaleorofficial approval areissued byorder from theMinistry ofAgriculture.
45. Benin alsoapplies optional phytosanitary control ofexports asaguarantee ofthehealth of
exported plants andplantproducts. Phytosanitary certificates areissued inaccordance withinternational
rulesandwiththeregulations inforce inthecountry ofdestination. Costs arecharged totheexporter.
23WTO documents G/SPS/N/BEN/1 and2of7April 1997.
24Mechanismbywhichtheauthoritiesapprovethemarketingofapesticidefollowingascientificexamination.WT/TPR/S/27
Page 38Trade Policy Review
(c) Environmental protection measures
46. Benin hasaFramework LawontheEnvironment andregulations governing control activities
inthefieldoftheenvironment. Most oftheenvironmental protection measures concern water and
forests.StandardizationactivitiesforenvironmentalpurposesaretheresponsibilityoftheEnvironmental
Quality, Regulations andStandards Control Service attheMinistry oftheEnvironment, Housing and
Urban Development. ThisService iscurrently working ondeveloping standards withrespect towater.
Theauthorities(DirectoratefortheEnvironment)stressedthatenvironmentalprotectionwasaprerequisite
totrulysustainable development.
47. Thecurrent lackofmeasures tolimitlandandwater degradation astheresult ofagricultural
practices could influence production conditions and,inthelongterm, foreign trade. Benin isamajor
cottonproducer,anditsobjectiveistodoublecottonexportsbetween1995and1998.Currentproduction
methods depend heavily ontheuseofchemicals (Chapter IV.2). Theauthorities arenotaware ofthe
measures taken byinternational environmental protection bodies (forexample, labelling infavour of
"bio" cotton) which could affect Beninese cotton exports.
(vi) Government procurement
48. Benin isnotasignatory totheplurilateral Agreement onGovernment Procurement negotiated
during theUruguay Round.25TheGovernment adopted arevised version oftherelevant legislation
inJanuary 1994, andadraftLawContaining theGovernment Procurement Code wassubmitted to
theNational Assembly. Ithadnotyetbeenapproved byApril 1997. InJanuary 1996, theGovernment
promulgated anOrdinance Containing theGovernment Procurement Code. However, because there
wasnoimplementation decree, thenewlawhasnotbeenbrought intoforce andtheordinance isnot
fullyapplicable. According totheauthorities, theprovisions oftheCode thatdonotrequire any
implementation textsareapplied.
49. TheCode ofJanuary 1996 will,inprinciple, apply toallpublic works, supplies andservices
contracts concluded byanypublic lawcorporation, i.e.public institutions, companies orgovernmental
bodies, andlocalcommunities. Theprovisions oftheCode willapply tocontracts exceeding athreshold
amount, which willbesetandcanberevised byanimplementation decree. Companies wishing to
compete mustberegistered inthecommercial registry, and,inthecaseofpublic works companies,
approved bytheState. Small andmedium national enterprises may, subject totheprovisions ofthe
agreements onexternal financing, beconsulted exclusively forcertain contracts concerning aspecified
category ofworks, supplies andservices laiddown intheimplementation decree.
50. TheOrdinance stipulates thatcontracts maybeconcluded asaresult either ofopenorrestricted
tendering, withorwithout acompetition, orofopenorrestricted auctioning, orbyprivate agreement.26
Theaward ofcontracts byprivate agreement canonlytakeplace incases specified intheOrdinance
subject totheopinion ofanational, departmental orspecial commission ongovernment procurement,
which willberesponsible forcontrol andregulation oftheprocedure. Thiscommission willhaveits
seatintheMinistry ofFinances, andwillcomprise, interalia,representatives oftheMinistry ofJustice
andtheMinistry ofPublic Works andPlanning. Theparticipation ofrepresentatives oftheMinistry
25TheaimoftheAgreement istoensure thatgovernment procurement ineach Member country isas
non-discriminatory andtransparent aspossible withrespect totheenterprises ofother Member countries inview
oftheeconomic importance ofsuch purchases formost ofthecountries.
26Auctioning isthetendering procedure inwhich thebidder offering thelowest bidinapublic session is
selected.Republic ofBenin WT/TPR/S/27
Page 39
ofTrade, Handicrafts andTourism isnotspecifically provided for.Control ofgovernment procurement
legislation iscurrently inthehands oftheGeneral Directorate ofBudget andEquipment.
51. Foreign ornational donors areallowed toattend thesessions inwhich thebidsfortheprojects
financed bythem areevaluated iftheirguidelines soprovide. Once theCommission hasapproved
theevaluation ofthebids, ittransmits itsopinion totheprime contractor whoawards thecontract to
thecandidate selected. Incases ofexternal financing, theopinion ofthedonor isrequested afterthe
Commission hasgiven itsopinion.27
52. Since 1992, allgoods andservices forming partofanexternally financed government
procurement contract areexempted from indirect domestic taxes andduties (e.g.VAT, cement tax),
aswellasfromthefiscal duty. Theaimofthisexemption istoallow donors tofinance projects "duty
free". Since September 1996, theseexemptions havealsoapplied todomestically financed government
procurement aswellascontracts concluded intheframework ofapreferential regime under theCode
ofInvestments.28
53. Theauthorities wereunable toproduce anystatistics oncontracts concluded bythepublic sector.
Alargeshare ofgovernment contracts gotoforeign enterprises. Certain bilateral financing agreements
contain tiedaidclauses under which contracts arereserved forenterprises fromthecountry financing
theprocurement.
(vii) Local content requirements
54. According totheauthorities, there arenospecific incentives fortheprocessing oflocalraw
materials. However, attheWAEMU andECOWAS level, therules oforigin impose anumber of
Community content requirements onmember country producers inorder toobtain trade preferences
(see(ii)(c) above: Tariff preferences andrules oforigin).
(viii) Counter-trade
55. According totheauthorities, theBeninese Government andthestateenterprises donotengage
inanycounter-trade related activities.
(ix) Balance-of-payments measures
56. Benin doesnotapply anyrestrictive trade measures forbalance-of-payments reasons.
(3) Measures directly affecting exports
57. Export regulations draw adistinction between localproduct exports andtransit trade, which
isthemostimportant source ofexport revenue aftercotton. About 20percentofcustoms revenue
issaidtocome from transit trade (Chart I.4). Animportant share oftransit trade concerns goods
informally exported toNigeria (Chapter I).
27However, given thatanydisagreement inthisrespect could onlybetheresult ofafailure torespect the
donor'sprocurementguidelinesontheonehand,andthatthoseguidelinestakeprecedenceoverdomesticlegislation
since theyderive from international agreements, ontheother hand, theGovernment Procurement Commission
would beobliged toreconsider itsopinion.
28Ministerial Order No.236of17September 1996.WT/TPR/S/27
Page 40Trade Policy Review
58. Theindustries currently engaged intheprocessing ofimported products forre-export are
relatively insignificant. Measures toencourage thecreation ofvalue-added insubsequently exported
products (e.g.drawback, temporary admission) areinpreparation (Chapter II).
(i) Regulations
59. Operators engaged inexport activities musthaveanauthorization foreachexport transaction
from theDirectorate ofForeign Trade (Ministry ofTrade, Handicrafts andTourism). Under Law
No.90-005 of15May1990, thisauthorization isissued automatically atthesametimeasthecertificate
oforigin. According totheauthorities, thetimerequired toobtain theauthorization, which isissued
forstatistical purposes, doesnotexceed 24hours. Theoperators mustalsohaveaprofessional trader 's
cardissued bythesameservice, andtheymustberegistered withandpaycontributions totheChamber
ofTrade andIndustry ofBenin. Inpractice, theforwarding agent submits anapplication forexport
tothecustoms authorities foreachconsignment. These measures, which donotapply totransit trade,
canbetime-consuming fortheenterprises concerned.
60. Thedocuments relating toeachshipment ofgoods, interaliatheexport customs declaration,
mustundergo theirprocedure ofdomiciliation withanapproved intermediary bank. Export receipts
mustberepatriated intheirtotality andconverted intoCFAfrancs within aperiod ofonemonth. An
enterprise maynotusetheforeign exchange29obtained through exports tofinance theimportation of
inputs. Imports forre-export cannot befinanced byofficial foreign exchange. These restrictions to
thefreeflowofcapital within thefranczone, intended, inprinciple, tocontrol theregularity offinancial
transactions, mayalsoincrease costs forexporting firms.
61. Theregulations governing transit trade aresimple. Importers donotpayimport duties and
taxes, butinprinciple, payanequivalent guarantee repayable oncethegoods havelefttheterritory
ofBenin. Theauthorities donotallow theentry intransit ofgoods whose import isprohibited inthe
country offinaldestination. Operators bypass thisprohibition either bydeclaring thegoods tobein
transit toanother country, orbypaying theentryduties torelease themforconsumption inBenin (see(ii)
below: Export duties andtaxes).
(ii) Export duties andtaxes
62. Exportdutiesweresuspendedin1993formostproducts.However,theyhavenotbeenrepealed.
Thefiscal dutyonexports iscurrently levied onlyondiamonds, precious stones andmetals, cocoa
beans andcrude oil,atarateof1.04percentofthef.o.b. export value.
63. However, several taxesarelevied onexported goods (Table III.3). Unlike export duties, they
alsoapply todomestic trade andtransit trade:
- Acompulsory contribution tothe"Guarantee Fund" (0.25 percentofthec.i.f.export
value) ispaidtotheChamber ofTrade andIndustry ofBenin. Itisnotlevied onexports
oflocal products, butonlyontransit trade. Inprinciple, thisfundisintended to
guarantee thepayment ofthedutyonentry forconsumption ifthegoods intransit do
notofficially leave theterritory (informal re-export).30
29Other thanFrench francs orCFA francs.
30Itwould seem thatinpractice, thecontributions tothisfundarenotusedforthatpurpose bytheChamber
ofTrade andIndustry ofBenin.Republic ofBenin WT/TPR/S/27
Page 41
- Astatistical taxof3percentonre-exports intransit; thistaxisnotlevied ondomestic
trade andexports oflocalproducts.
- Aroadtaxof0.85percentonexports andre-exports.
Table III.3
Summary ofexport taxes, 1997
(Percentage ofc.i.f. value)
Destination
ofexportsGuarantee fund Road tax Statistical tax Total
Exports oflocal products
Burkina Faso n.a. 0.85 n.a. 0.9
Niger n.a. 0 n.a. 0
Nigeria n.a. 0.85 n.a. 0.9
Other n.a. 0.85 n.a. 0.9
Official transita
Burkina Faso 0.25 0.85 0 1.1
Niger 0.25 0 0 0.3
Nigeria 0.25 0.85 3.0 4.1
Other 0.25 0.85 3.0 4.1
n.a. Notapplicable.
aInformal re-exports aresubject toimport duties (fiscal tax(0-20 percent)), PCS(1percent), VAT (18percent), andthestandard
advance payment (5percent).
Source: Beninese Government.
64. Asshown inTable III.3, thetaxsystem provides astrong incentive foroperators tore-export
under theofficial transit regime, even inthecaseofproducts whose import isprohibited inthe
neighbouring countries. Thisre-exportation consists indeviating thegoods intransit (e.g.destined
forNiger) from theirofficial destination (forexample, Nigeria). Indeed, informal re-export would
involve thepayment ofimport dutyandVAT, thereby considerably increasing thecostoftheproducts.
(iii) Export licensing, prohibitions andother measures restricting exports
65. Theexport ofprecious metals issubject toapproval bytheMinistry ofFinance, except inthe
caseofitems containing alowquantity ofmetal, ofitems weighing lessthan500grams, orofupto
10goldcoins.
66. Exports ofteakintherough andcharcoal areprohibited withaview topreserving natural
resources andinthewake ofashortage onthedomestic market. However, exports ofsawn teakin
theform offriezes, parquet flooring andplates areauthorized (Chapter IV.2).
67. Exports ofsubsistence crops arealsoprohibited bya"temporary ministerial decision" with
aview, according totheauthorities, ofmaintaining self-sufficiency infood. Exports ofrawcotton
areprohibited aswell.
68. Inaccordance withtherelevant United Nations resolutions, Benin participates inthefollowing
trade embargoes: Iraq(allproducts except foodsupplies); Former Yugoslavia, Liberia, Angola and
Somalia (arms andrelated equipment) andLibya (airembargo, economic andtrade restrictions).WT/TPR/S/27
Page 42Trade Policy Review
(iv) Export subsidies
69. Benin doesnotmaintain anysystem ofexport subsidies. Inparticular, theGovernment does
notgrant direct subsidies toagricultural exports.31
(v) Export promotion
70. Theentities responsible forexport promotion aretheCentre béninois ducommerce extérieur
(Beninese Foreign Trade Centre -CBCE), theConseil national pourl'exportation (National Export
Council-CNEX)andtheChamberofTradeandIndustryofBenin,whichincludesanexportassociation.
Although thepromotion ofexports hasbeendeclared aGovernment priority, thepromotion projects
implemented withaviewtofacilitating andfostering exports havebeenmodest.
71. Efforts tomake thecurrent official transit regime more attractive bycreating afree-trade zone
within theautonomous portofCotonou datebackto1994. Thisproject, which could serve tostimulate
trade, wasnotyetareality inApril 1997. Theestablishment ofafree-trade zone would favour
importation withaviewtore-exportation, interaliabygiving theimporter more timetochoose the
finaldestination. Thezonewould allow theduty-free import ofproducts subsequently exported without
substantial processing. Ontheother hand, theproject would increase thecostandadministrative
formalities relating tocustoms services, which would havetobereinforced.
72. Fewmeasures havebeenintroduced tocompensate forthetaxes levied onimported inputs.
TheCustoms Code provides foratemporary admission regime withtotalorpartial suspension ofimport
duties andtaxes forproducts tobemanufactured orprocessed before being re-exported, butthedecree
setting outtheconditions ofapplication ofthese provisions hasnotbeenadopted. Adrawback regime
providing fortherecovery ofimport duties oninputs oncetheexport hastaken place isreportedly
alsoincluded inthenewdraftInvestment Code.
(vi) Measures implemented inimporting countries
73. Benin enjoys certain preferential benefits intheframework ofagreements suchastheLomé
Convention andtheGeneralized System ofPreferences which hasbeenintroduced inmost ofthe
industrialized countries. Under theLomé Convention, theEuropean Union 'simports from the
71African, Caribbean andPacific (ACP) countries arenotsubject toanyquantitative restrictions and
areadmitted dutyfree,withtheexception ofproducts coming under theCommon Agricultural Policy.
74. Benin hasbenefitted from theStabilization ofExport Earnings Scheme (STABEX), applied
bytheEuropean Union totheACPcountries withaviewtoreducing theimpact ofprice orquantity
fluctuations onexport earnings generated by49agricultural products. InthecaseofBenin, theSTABEX
transfers chiefly concerned cotton, palm-kernel oil,palm-oil andoilcakes. They havenotexceeded
CFAF 425million peryear, however, since 1989.
(4) Other measures affecting production andtrade
(i) State trading, stateenterprises andprivatization
75. TheMarxist policy followed byBenin asof1972ledtomassive public investment inproduction
andtrade activities, including international trade. Thenumber ofenterprises withpublic ormixed
private andpublic capital rosefrom 12to120between 1972 and1981, inwhich yearthe120state
31WTO document G/AG/AGST/BEN.Republic ofBenin WT/TPR/S/27
Page 43
enterprises accounted between them foraforeign debtofCFAF 136billion, while theirlosses and
transfers received fromtheGovernment totalled CFAF 40billion andCFAF 17billion respectively.
Although thefirstadjustment measures wereintroduced asof1982, therealrestructuring began only
in1990withthechange inpolicy orientation. In1994, thebudgetary andfinancial burden ofthestate
enterprises hadbeeneliminated together with20,000 jobs.
76. A1992lawonprivatization stipulates thattheStatemaysellsuchenterprises asitowns, with
theexceptionofenterprisesconsideredtobestrategic32,belongingtothemining,energy,water,forestry,
weapons, transport andcommunications sectors. However, oneofthechief liberalization measures
currently being planned bytheauthorities intheoilsector istheprivatization oftheSociété nationale
decommercialisation desproduits pétroliers (National Company fortheMarketing ofPetroleum
Products). Indeed, thisisoneofthemainmeasures provided forinthestructural adjustment agreement
signed withtheWorld Bank andbrought intoforce asaninternational convention byanordinance
dated January 1996. Under theConstitution, thisordinance takes precedence overLaw92-023 and
consequently, according totheauthorities, thereisnoinconsistency between thesespecific restructuring
measures andtheapplicable legalprovisions.
77. In1997, some 30enterprises werestillowned bytheState, including trading enterprises and
publicservices(TableIII.4).Accordingtotheauthorities,sharesinthecompanieswhichhaveundergone
privatization haveessentially beenacquired byforeign interests, andmostoftheprivatized enterprises
arenowprofitable.
78. According totheauthorities, theGovernment nolonger grants tradeprivileges other thanthose
provided forintheInvestment Code (seeChapter II).However, certain enterprises thatemerged under
theregime inforce until1990 continued toenjoy exclusive marketing rights orother suchprivileges.
Thisisthecase,forexample, ofSONAPRA, which controls allproduction andmarketing ofrawcotton
(andwhich exports ginned cotton); ofSONACOP which, in1997, maintained adefacto monopoly
onoilimports; ofSBEE withrespect totheelectricity business; ofcement-manufacturing enterprises
(private andpublic), protected byacomplete prohibition onimports; oftelecommunication equipment
andservices, distributed exclusively bytheOPT; andofpharmaceuticals, imported anddistributed
exclusively byapproved enterprises.
79. Under theWTO Agreement, Benin undertook tonotify theCouncil forTrade inGoods ofits
statetrading enterprises whose purchases orsalestooktheformofimports orexports.33Nonotification
hadbeenreceived fromBenin asofApril 1997. However, certain stateenterprises arepresent inthe
export markets. Forexample, SONAPRA exports more thanhalfoftheginned cotton produced in
Benin (Chapter IV.2).
32LawNo.92-023onthedeterminationofthebasicprinciplesofdenationalizationandtransferoftheproperty
ofpublic sector enterprises totheprivate sector. Under thisLaw, foreign investors maynotholdmore than
65percentoftheshare capital orassets ofprivatized enterprises. However, inpractice, thislimitmayberaised
iftheauthorities sodecide.
33TheUnderstandingontheInterpretationofArticleXVIIoftheGeneralAgreemen tonTariffsandTrade1994
stipulates thatinorder to"ensure thetransparency oftheactivities ofstatetrading enterprises, Members shall
notify (...)totheCouncil forTrade inGoods, forreview bytheworking party (...)governmental and
non-governmental enterprises including marketing boards, which havebeen granted exclusive orspecial rights
orprivileges, including statutory orconstitutional powers, intheexercise ofwhich theyinfluence through their
purchases orsales thelevel ordirection ofimports orexports".WT/TPR/S/27
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Table III.4
Reorganization ofthemajor state andsemi-state enterprises, February 1997
Company StateaComments
Société nationale pourlapromotion agricole SONAPRA 100 Monopoly onthesaleofrawcotton
Maïserie Bohicon (maize processing) 0 Wound up
Société sucrière deSavé 49 Currently closed
Usine Parakou (cashew nuts) 100 Currently closed; privatization under way
Usine Natitingou (tomato concentrate andmangoes) 0 Wound up
Société nationale pourl'industrie descorps gras(SONICOG) 100 Privatization under way
Usine Zè-Allahé (fruit juices) 0 Wound up
Société nationale desboissons SOBEBRA 8 20%ofshares reserved fornationals;
5%foremployees
Office national desécurité alimentaire 100 Reorganization
Société béninoise detabac (SOBETA) 0 Privatized (MANUCIA)
Complexe textile duBénin COTEB (spinning, weaving, finishing) 100 Tobepartly privatized
Société desindustries textiles (SITEX) 100 Tobepartly privatized
Société béninoise destextiles (SOBETEX) 36 20%ofshares reserved fornationals
Industrie béninoise detextiles (IBETEX) 0 20%ofshares reserved fornationals
Société desengrais duBénin 0 Currently closed
Société desciments d'Onigbolo (SCO-ciment) 51 20-25% ofshares allocated tonationals, 5%to
employees. Import prohibition. Domestic
oligopolySociété nationale desciments (SONACI) CIM-BENIN 0
Société desciments duBénin (SCB) 0
Centre national d'essais etderecherches destravaux publics 100 Reorganization without privatization
Société béninoise d'électricité etd'eau(SBEE) 100 Reorganization without privatization, monopoly
Hôtel delaPlage 100 Privatization under way
Hôtel Croix duSud 100 Privatization under way
Office despostes ettélécommunications 100 Reorganization without privatization, monopoly
Office national dubois(Onab) 100 Tobepartly privatized
Autonomous portofCotonou 100 Reorganization without privatization
Organisation commune Bénin-Niger 40 Reorganization without privatization
Compagnie béninoise denavigation maritime (COBENAM) 100 Reorganization without privatization.
Guaranteed market share
Société béninoise desmanutentions portuaires (SOBEMAP) 100 Reorganization without privatization,
monopoly
Conseil national deschargeurs duBénin (CNCB) 100 Reorganization without privatization
Sémé oilplatform 100 Tobepartly privatized
Société nationale decommercialisation desproduits pétroliers 45 Reorganization; tobepartly privatized
Caisse autonome d'amortissement 100 Reorganization without privatization
Société degestion desmarchés (SOGEMA) 100 Reorganization without privatization
SONAR (assurance) 0/100 Newprivate lifeinsurance company/Life
insurance monopoly
Loterie nationale duBénin 100 Reorganization without privatization
Office deradio-télévision duBénin 100 Reorganization without privatization, monopoly
Office national d'édition depresse etd'imprimerie (Onepi) 100 Reorganization without privatization, monopoly
Centre national d'expérimentation etderecherche destravaux
publics100 Reorganization without privatization
aCapital holding oftheState (%).
Source: Beninese Government.Republic ofBenin WT/TPR/S/27
Page 45
(ii) Subsidies andother forms ofproduction assistance
80. Inarecent communication, Benin notified theWTO thatitdidnotgrant anysubsidies relevant
totheAgreement onSubsidies andCountervailing Measures.34Generally speaking, inview ofthe
scarce budgetary resources available, aidtoproduction would bedifficult tocontemplate.
(iii) Price regulation andcompetition policy
81. Breaking withalongtradition ofprice control, theGovernment began in1996, withthefirst
structural adjustment programme, toderegulate prices.35InFebruary 1997, onlytheprices (ex-factory,
wholesale andretail) ofbread, water, electricity andpetroleum products (ordinary petrol anddiesel,
oil)weresetbytheGovernment. Theprice ofschool books andsupplies weremade subject toprior
approval, aswere theprice ofcement andpharmaceuticals.
82. TheDirectorate ofCompetition andPrices attheMinistry ofTrade, Handicrafts andTourism
works together withtherelevant institutions36onmatters concerning theimportation, distribution and
priceofmedicaments andpharmaceuticals (with theexception ofgeneric drugs). Onlycertain entities
(public andprivate) approved bytheStateareentitled toimport andsellpharmaceuticals. Theretail
price (andinparticular, theprofit margin) ofpharmaceuticals andveterinary medicaments issetby
decree fortheentire territory, applying acoefficient of1.61tothedutyfreeprice oftheproducts
ex-factory. These products areexempt from VAT andfiscal duty.37
83. Generic drugs aresupplied topublic health centres bytheCentral d'achat desmédicaments
essentiels (Centre forthePurchase ofEssential Medicaments -CAME) atprices subsidized through
external financing. TheCAME isgoverned byprivate lawandissubject tocompulsory Statecontrol.
Ithassigned anagreement withtheGovernment defining thewayinwhich itistocarry outthemission
ofsupplying thehealth centres.
84. Benin doesnotcurrently haveanylegislation inthefieldofcompetition. Adraftlawregulating
competition, which covers allaspects oftrade involving competition, iscurrently under review atthe
National Assembly (Box III.1). According totheauthorities, thisdraftlawshould bevoted before
theendof1997. Inspiteofthelackoflegislation withrespect tocompetition, theexistence ofaparallel
market hasinfactcreated acompetitive climate: indeed, anyattempt tosetprices excessively higher
thanworld prices would, inthecaseofmost products, come upagainst formal orinformal imports
available onthelocalmarkets.
34Document G/SCM/BEN/1, 13January 1997.
35Pursuant toOrdinance No.20of5July1967, allprices could befixed bydecree.
36Directorate ofPharmacies andLaboratories, National Association ofPharmacists andUnion of
Community Pharmacists.
37Wholesalers/importers arerequired togrant aminimum rebate of27percenttomanufacturing pharmacies
and13percenttoState health entities. Themanufacturing pharmacies arerequired togrant arebate of10per
centtosubsidiary pharmacies.WT/TPR/S/27
Page 46Trade Policy Review
BoxIII.1: Main provisions ofthedraft Law ontheRegulation ofCompetition
Thedraft applies toalltrade activities andstipulates thattheprice ofgoods andservices shall be
determined freely through theforces ofcompetition. Itestablishes aNational Competition Committee
made upofrepresentatives ofthechief Ministries; thedirectors responsible forcompetition, foreign and
domestic trade andcontrol ofquality andofmeasuring instruments andtheir representatives; and
representatives oftheChamber ofTrade andIndustry ofBenin, oftheChamber ofAgriculture, of
national consumer associations andoftheconsumer cooperatives.
Price regulation ispossible "forgoods, products andservices whose utility could have arecognized social
impact orforwhich price competition islimited owing tomonopoly situations orchronic supply
problems". Insuch cases, theMinister ofTrade mayissue anorder upon theadvice oftheNational
Competition Committee. TheGovernment may also adopt temporary measures bydecree against
excessive price increases "pursuant toacrisis situation, exceptional circumstances, apublic disaster ora
clearly abnormal market situation inagiven sector".
Concerted practices anddominance arespecifically prohibited, asareanti-competitive practices. Any
enterprise which isinaposition toplayaleading roleonthemarket foragiven product isconsidered to
bedominant. TheLaw requires publicity andtransparency with respect toprices andprohibits
discriminatory practices. Anexception ismade forconcerted practices anddominance resulting from the
application ofalegal regulatory text, provided the"authors ofthetextareabletodemonstrate thatthe
result of(themeasures) istoensure economic development, inter aliabyincreasing productivity or
lowering production ordistribution costs".
Unfair competition isexpressly prohibited, inparticular anypublicity containing allegations, indications
orrepresentations which arefalse orliable tobedeceptive, where theyconcern theexistence, thenature,
thecomposition, thesubstantial characteristics, theactive principle content, thetype, origin, and
quantity, themanufacturing process anddate, theproperties, theprice andtheconditions ofsaleand
utilization ofthegoods orservices inquestion. Theprohibition alsoconcerns anysaleofproducts,
performance ofservices, oranyoffer, proposed sale ofproducts orperformance ofservices by
producers, wholesalers orretailers involving thedistribution oftrading coupons orstamps, vouchers,
labels orother certificates entitling theholder toabonus tobeprovided atadatesubsequent tothedate
ofsaleorperformance ofservice, orentitling theholder toabonus intheform ofproducts orservices
different from theproducts soldortheservice performed. However, awaiver may beobtained for
after-sale service through ajoint order oftheMinistries ofTrade, Finance andIndustry, foralimited
period oftime. Itisgranted, inter alia, according tothenovelty oftheproduct orservice, exclusivity
deriving from apatent, anoperating licence orthedeposit ofadesign, orapublicity drive.
TheLaw alsoprohibits anypractice whereby thesupplier ofaproduct requires thecustomer, asa
precondition forsupplying theproduct, tocarry outthetrade intheproducts supplied orindicated bythe
supplier ortheperson appointed bythesupplier, ortorefrain from conducting thetransaction ofa
specified category ortypeofproducts other thanthose provided bythesupplier oraperson appointed by
thesupplier.
Thepractice whereby thesupplier ofaproduct requires, asaprecondition forsupplying theproduct, that
thecustomer either purchase from thesupplier ortheperson designated bythesupplier some other
product, orthatthecustomer refrain from utilizing ordistributing, withthesaidproduct, another product
thatisnotofabrand name ormanufacture indicated bythesupplier ortheperson designated bythe
supplier, isalsoprohibited.
Theofficials from theDirectorate responsible forthecontrol ofcompetition willbeassigned thespecial
mission ofcarrying outsuch controls, research andinvestigations asareconsidered necessary to
discourage anypractice which aims tohamper freecompetition. They willbeable toinspect all
professional premises andproducts being transported. They willalsobeabletovisit private housing
accompanied byacriminal investigation police officer, provided thevisitbegins during thedaytime.Republic ofBenin WT/TPR/S/27
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(iv) Regional promotion measures
85. Benin doesnotapply anyregional promotion measures apart from those provided forinthe
Investment Code. TheCode provides foraperiod oftaxexemption which increases inproportion
tothedistance oftheplace ofinvestment from Cotonou (Chapter II).Inaddition, certain measures
specific togiven sectors oftheeconomy (e.g.cotton) haveconsiderable regional effects (Chapter IV).
(v) Measures fortheprotection ofintellectual property rights
(a) Treaties andlawsinforce
86. Benin isaparty totheConvention Establishing theWorld Intellectual Property Organization
(WIPO), signed in1967, andhasacceded toanumber ofinternational agreements inthatarea,interalia:
theBerne Convention of1886 fortheProtection ofLiterary andArtistic Works, asrevised in1971;
theHague Agreement of1925 Concerning theInternational Deposit ofIndustrial Designs, asrevised
in1960 andcompleted in1967; theParis Convention fortheProtection ofIndustrial Property, as
revised in1967 andamended in1979; thePatent Cooperation Treaty done atWashington in1970
andamended in1979 and1984; andtheNiceAgreement Concerning theInternational Classification
ofGoods andServices forthePurposes oftheRegistration ofMarks.
87. UponratifyingtheUruguayRoundAgreement,BeninipsofactobecameapartytotheAgreement
onTrade-Related Aspects ofIntellectual Property rights (TRIPS). Disciplines oftheTRIPS Agreement
concerning national treatment andthemost-favoured-nation clause (Articles 3,4and5)entered into
force forMembers on1January 1996.38
88. Benin isalsoaparty totheAgreement ontheCreation ofanAfrican Intellectual Property
Organization (AIPO), signed in1977andknown astheBangui Agreement. Theother signatories are
Burkina Faso, Cameroon, Congo, Côted'Ivoire, Chad, Djibouti, Gabon, Guinea, Mali, Mauritania,
Niger, Central African Republic, Senegal andTogo. ThisAgreement establishes auniform system
fortheprotection ofintellectual property, andinparticular, asystem forthesingle deposit ofapplications
forpatents, registration ofutility models, trademarks, servicemarks andother intellectual property
rights recognized byallofthecountries signatory totheAgreement (BoxIII.2). There isnospecific
national intellectual property legislation prior totheBangui Agreement, whose provisions havethe
fullforce oflawfollowing itsratification byBenin.
89. CopyrightprotectioniscoveredbytheLawonCopyrightof1984(No.84-008)whichiscurrently
being revised tobring itintoconformity withtheprovisions oftheTRIPS Agreement. TheBureau
béninois dudroit d'auteur (Beninese Copyright Office -BUBEDRA) isresponsible, interalia,for
combatting thepirating andcounterfeiting ofintellectual works. Itsauthorization isrequired forthe
import ofallrecordings, including discs, cassettes andvideos. Import documents must bestamped
bytheOffice, which hastheauthority toinspect thegoods upon entry through customs. Noting that
theCustomsCodedoesnotcurrentlycontainanyspecificprovisionsconcerningtheimportofintellectual
works andtheirmedia, theBUBEDRA hasrecommended theinsertion, intheCustoms Code ofthe
region, ofregulations concerning thecirculation ofthemedia forthetransmission ofintellectual works.39
38However, Articles 70:8and70:9 areforimmediate application (i.e.asof1January 1995). Benin has
notyetnotified theWTO ofitsentry intoforce.
39TheTRIPS Agreement provides forspecial procedures related toborder measures. Inparticular, aright
holder, whohasvalid grounds forsuspecting thattheimportation ofcounterfeit trademark orpirated copyright
goodsmaytakeplace,maylodgeanapplicationinwritingwiththecompetentauthorities,administrativeorjudicial,
forthesuspension bythecustoms authorities oftherelease intofreecirculation ofsuchgoods (Articles 51-60).WT/TPR/S/27
Page 48Trade Policy Review
BoxIII.2: TheBangui Agreement onIntellectual Property
Patent legislation -Patents mayrelate toanynewinvention involving aninventive stepandindustrially
applicable; plant varieties, animal species andessentially biological processes forthebreeding ofplants
oranimals, other thanmicro-biological processes, cannot bepatented. Theprotection ofplant varieties is
laiddown intheTRIPS Agreement (Article 27.3(b)).
Layout designs ofintegrated circuits arenotcurrently protected. Patents areprotected foraperiod of
10years which mayberenewed twice forperiods offiveyears. Asrenewal isnotautomatic, theperiod
must bebrought intoconformity with theprovisions oftheTRIPS Agreement, which provides fora
20-year period fortheprotection ofpatents counted from thefiling date. There arealsodivergences with
respect tothegranting ofcompulsory licences, which maybeissued where theworking ofthepatented
invention isprevented byimportation oftheprotected product. According toArticle 27.1oftheTRIPS
Agreement, patent rights may beenjoyed without discrimination astotheplace ofinvention ofthe
product. Similarly, Article 58.2 ofAnnex IoftheBangui Agreement concerning counterfeiting when
there isnolocal working isnotconsistent withtheprovisions ofArticle 27.1. Theprovisions regulating
thegranting ofcompulsory licences onpublic interest grounds must alsobebrought intoconformity with
Article 31oftheAgreement. Moreover, theAgreement stipulates thatthejudicial authorities shall have
theauthority toorder thedefendant toprove thattheprocess toobtain anidentical product isdifferent
from thepatented process (Article 34). Failing such proof, theprocess isassumed tobecounterfeited.
Thisprovision does notappear intheBangui Agreement.
Legislation with respect totrademarks -Trademarks andservicemarks areprotected foraperiod of
10years from thedateofapplication forregistration, renewable indefinitely. TheTRIPS Agreement
(Article 16.1) provides forprotection against identical orsimilar signs forgoods orservices which are
identical orsimilar tothose inrespect ofwhich thetrademark isregistered where such usewould result
inalikelihood ofconfusion. Inthecase oftheuseofanidentical sign, alikelihood ofconfusion is
presumed. The Agreement also provides forincreased protection ofwell-known trademarks
(Article 16.2) aswellasprotection against theuseofidentical orsimilar signs forproducts thatarenot
similar. These protections arenotexplicitly provided forbytheBangui Agreement. According to
Article 19.1 oftheTRIPS Agreement, theregistration ofatrademark may becancelled only after an
uninterrupted period ofatleast three years ofnon-use. This period isfiveyears under theBangui
Agreement (Article 22).
Copyright -Anyoriginal intellectual, artistic orscientific work andatitlethereof enjoy anexclusive
incorporeal property right enforceable against allpersons. Theprotection applies inparticular tobooks
andother writings, lectures, addresses andother works ofsuch nature, works created forthestage,
musical works, pictorial works, architectural works, maps andgraphic reproductions, cinematographic,
broadcasting andaudiovisual works, photographic works andtranslations andarrangements ofthe
above-mentioned works aswellasfolklore products.
TheTRIPS Agreement alsoprovides protection forcomputer programs andcompilations ofdatawhich
byreason oftheselection orarrangement oftheir contents constitute intellectual creations (Article 10).
TheBangui Agreement contains nocorresponding provision. Therelated rights stipulated inArticle 14
oftheTRIPS Agreement, such astheprotection ofperformers, producers ofphonogra ms(sound
recordings) andbroadcasting organizations, donotappear intheBangui Agreement either.
Industrial designs andother forms ofintellectual property -thecreator ofanyindustrial design hasthe
exclusive right toitsexploitation andsaleunder theBangui Agreement. Theduration oftheprotection
conferred byacertificate ofregistration foranindustrial design expires fiveyears after thedeposit ofthe
application forregistration, buttheregistration may berenewed twice. The TRIPS Agreement
(Article 26.1) grants broader rights, inparticular with respect toimports. TheBangui Agreement
provides fortheregistration oftrade names forarenewable period of10years from thedateoffiling.
Only registered names aresubject tocriminal sanctions. Appellations oforigin areprotected assuch if
theyhave been registered bytheAIPO oraretobetreated ashaving been registered byvirtue ofan
international convention towhich Benin isaparty.Republic ofBenin WT/TPR/S/27
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90. Thecounterfeiting ofatrademark ortheuseofacounterfeit trademark arepunishable bya
fineofuptoCFAF 300,000 andamaximum prison sentence ofthree years. Thepenalties maybe
doubled intheevent ofsubsequent convictions. Thecourt mayalsoorder theconfiscation ofthegoods
carrying acounterfeit trademark, independently ofsuchdamages asmaybe payable.
(b) Enforcement ofintellectual property rights
91. Theauthorities stressed thatgreater respect fortheintellectual property regime wasneeded
inorder toencourage localartistic creative activity. TheBUBEDRA istrying todraw theattention
ofthepopulation tothefactthatbuying acounterfeit orpirated product istantamount to"undermining
thefoundations ofcultural andeconomic development inourcountry".40Inmore general terms, the
entry intoforce oftheTRIPS Agreement alsoimplies thedevelopment ofjudicial procedures andthe
substantial strengthening ofadministrative andtraining capacity inorder toensure thattheintellectual
property lawscanbeimplemented effectively.
92. TheBUBEDRA expressed thewish thattheWorld Customs Organization (WCO) should
introduce anddevelop activities aimed attraining andinforming customs officials. Particular emphasis
should beplaced onthepassage ofgoods atcustoms posts.41However, thesignificant informal trade
which, bydefinition, avoids thecustoms posts, isunlikely tofacilitate theimplementation ofintellectual
propertylawsattheborder.TheBUBEDRArecommendsatrainingprogrammeinvolvingallparticipants
inthesystem, including customs officials, judges andthepolice. TheBUBEDRA alsofeelsthatthe
public should bebetter informed sothattheycanrecognize pirated orcounterfeited products.
93. TheGovernment isalsoaware ofthepublic health riskofcounterfeit medicaments. Following
thedevaluation oftheCFA franc, theincrease intheprice ofimported medicaments hasreportedly
caused consumers toturntowards the"miracle products" onthelocalmarkets.42Theillegal saleof
pharmaceuticals wasthesubject ofarecommendation attheNational Economic Conference in
December 1996. That Conference recommended, inter alia,therepression ofillegal sales of
pharmaceuticals andincreased efforts toinform thepublic security forces andhealth controllers in
thatrespect.
40Statement bytheDirector oftheBeninese Copyright Office attheMeeting ofCopyright Contact Persons
Involved intheCombat against Piracy, Cotonou, 13February 1997.
41According totheauthorities, there isnolarge-scale local production ofcounterfeit orpirated products,
andthebulkofcounterfeit products isimported.
42SoirInfo, 12February 1997.