WT/TPR/S/113 Trade Policy Review
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III. TRADE POLICIES AND PRACTICES BY MEASURE
(1) I NTRODUCTION
1. Under its trade policy reform launched in 1986, Burundi had inter alia  eliminated most
quantitative restrictions and taken some steps to rationalize its tariff structure, making customs duties
the country's main trade policy instrument.  The reform process had been suspended when the social
crisis broke out in 1993 and the tariff structure largely unchanged until January 2003.  The tariffapplied during that period comprised 10 rates in the zero to 100 per cent range.  The modal rate (10
per cent) was applied on around 38 per cent of tariff lines and the maximum rate (100 per cent) on
about 12 per cent of tariff lines.  The simple average rate stood at 30.8 per cent, indicating very strong
protection.  Under a tariff reform implemented since 1 January 2003, rates exceeding 40 per cent have
been eliminated, and the tariff for all products previously subject to such rates is now 40 per cent.The MFN tariff for 2003 comprises eight rates;  the simple average rate has dropped to 23.5 per cent
(Table III.1).  All customs duties are ad valorem .
Table III.1
MFN tariff structure in Burundi, 2002-2003(Percentage)
2002 2003Uruguay
Round
Bound tariff lines (percentage of all tariff lines) 21.6 21.6 21.6
Duty-free tariff lines (percentage of all tariff lines) 0.1 0.1 0.7
Non- ad valorem  tariffs (percentage of all tariff lines) 0.0 0.0 0.0
Tariff quotas (percentage of all tariff lines) 0.0 0.0 0.0
Non- ad valorem  tariffs with no ad valorem  equivalent (percentage of all tariff lines) 0.0 0.0 0.0
Simple average bound rate 68.3 68.3 68.3
  Agricultural products (HS01-24) 94.0 94.0 94.0
  Non-agricultural products (HS25-97) 37.5 37.5 37.5
  WTO agricultural productsa95.1 95.1 95.1
  WTO non-agricultural productsb27.9 27.9 27.9
Overall standard deviation of bound rates 41.5 41.5 41.5
Simple average applied rate 30.8 23.5 n.a.
  Agricultural products (HS01-24) 63.9 35.4 n.a.
  Non-agricultural products (HS25-97) 25.6 21.6 n.a.
  WTO agricultural products 54.6 32.6 n.a.
  WTO non-agricultural products 27.3 22.1 n.a.
Domestic tariff "peaks" (percentage of all tariff lines)c12.1 0.0 0.0
International tariff "peaks" (percentage of all tariff lines)d42.9 42.9 18.4
Overall standard deviation of applied rates 28.9 14.4 n.a.
Applied "nuisance" rates (percentage of all tariff lines)e0,0 0,0 n.a.
n.a. Not applicable.
a WTO Agreement on Agriculture.
b Excluding petroleum products.
c Domestic tariff "peaks" are tariffs exceeding three times the simple average rate applied (Indicator 8).
d International tariff "peaks" are tariffs exceeding 15 per cent.e "Nuisance" rates are those greater than zero, but not exceeding to 2 per cent.
Source: WTO Secretariat calculations, based on data supplied by the Burundian authorities.
2. The tariff structure's transparency is undermined  by the various exemptions granted under the
customs legislation, the Tax Code, the Investment Code, the Law on Export Promotion, the Free ZoneLaw, and the Mining and Petroleum Code.  The global value of the exemptions granted is substantial,Burundi WT/TPR/S/113
Page 27
i.e. an average of 15 per cent of the total value of imports, and they can lead to significant distortions
inasmuch as the competent authorities have a wide margin of discretion for granting them and there is
considerable overlapping of products covered by the various regimes.  Burundi still applies the
Brussels Definition of Value for customs valuation.  Preshipment inspection is mandatory for all
imports worth more than US$5,000 or US$3,000 in the case of food, chemical or pharmaceutical
products, but petroleum products are exempt from this  requirement.  Importers bear the relatively high
inspection fees, fixed at 1.5 per cent of the declared value.
3. Several internal taxes are applied on imports, including a service tax, various consumption
taxes, and a transaction tax which has discriminatory effects in the case of agricultural, fisheries and
stockbreeding products, since local products are taxed at a lower rate than imports.  Excise duties
apply on a limited number of products such as beer, tobacco, carbonated beverages and sugar.  Aspecial surcharge is levied on certain textile products.   In 2001, trade duties and taxes provided
23.8 per cent of global revenue in 2001 (customs duties accounting for 11.5 per cent and other taxes
for 12.3 per cent).  The restrictive licensing system was abolished in August 2002, and import licences
are now used for statistical purposes.  Burundi still prohibits imports of cotton duck, however.  It has
no anti-dumping, countervailing or safeguard legislation.
4. A 5 per cent export tax is collected on most products, although the tax on green coffee is
31 per cent.  Sugar exports are subject to a quota fixed according to domestic demand.  Exports of
manufactures in particular are eligible for incentives, mainly under the Law on Export Promotion and
the Free Zone Law.  The key incentives are tax allowances and exemptions, inter alia  from the profits
tax, and exemption from customs duties on inputs and capital goods.  Subsidies are granted under an
export promotion fund offering short- or medium-term loans on preferential terms.
5. The State intervenes extensively in economic activity, through 50 partly government-owned
enterprises operating in 10 different sectors.  Most of these firms perform poorly, and their deficit
runs close to 20 per cent of GDP.  Partly because of the social and political climate reigning in the
country, little progress has been made in the privatization programme designed to address the
problem.
6. Legislation on the protection of intellectual property essentially consists of a 1964 industrial
property law and a copyright law dating back to 1978, which has never been implemented because of
its lacunae as well as a lack of resources.  A draft copyright law has been prepared.
(2) M
EASURES DIRECTLY AFFECTING IMPORTS
(i) Registration and documentation
7. Any duly registered natural or legal person may import goods and have access to the foreign
needed for such transactions.  According to the au thorities, the registration procedure for importers is
completed within an average of 24 hours if all the required documents are up to date.  Importers filing
for registration must meet the criteria applicable to traders under the Commercial Code.1  The Trade
Directorate issues every registered importer with an identification number that must appear on all
customs declaration documents.  Imports are financed by letter of credit.  Goods must be clearedthrough Customs by approved forwarding agents, whose duties are regulated by a law of
                                                     
1 Under the Code, traders are persons with legal status to engage in commercial activities as a regular
profession exercised in their own name and on their own account.  Trade in goods includes the purchase ofcommodities or merchandise for resale, either in kind or after processing and placement on the market, or forrental;  the rental of movable property for sub-rental;  any manufacturing, public works or private construction,contracting, or transport enterprise;  and any building enterprise.WT/TPR/S/113 Trade Policy Review
Page 28
January 2001 on customs agencies.  Forwarding agents are required to post a bond covering all
payable taxes and duties.  The forwarding agent's commission is freely negotiated with the importer.
Two copies of the pro forma invoice are normally required in order to file for an import licence.
8. The mandatory import documentation is specified in the law of November 1971 amending the
customs legislation.  There are seven different forms for declaring the operations involved (delivery
for consumption;  deposit in a warehouse or free-zone facility;  temporary import;  export;  temporaryexport;  re-export;  or transit).  Each import declaration is divided into three sections:  the first lists the
details common to the various items declared, such as the particulars of the declarant and operators,
and the goods' country of provenance;  the second specifies the characteristics of the items to be
declared, the country of origin (according to the origin criteria laid down by the legislation in force)
and the customs regime applicable to the goods;  and the third contains the declarant's undertakingand specifies the full settlement of duties and taxes payable in respect of the declaration as a whole.
9. Import documents also include the clean report of findings issued by the preshipment
inspection agency.   In Burundi, preshipment inspectio n is mandatory for all imports of a c.i.f. value
exceeding US$5,000 or US$3,000 for food, chemical and pharmaceutical products.  Petroleum
products are not subject to preshipment inspection.  Exemptions may be granted, for which theimporter is required to apply to the BRB in writing.  Preshipment inspection of imports for Burundi
has been entrusted to the Société générale de surveillance  (SGS) and the firm Baltic Control (BC).
The mandate of these two firms is to ascertain the quality, quantity and value of the goods for customs
purposes.  The inspection is conducted at the production, storage or loading site.  The importer is
required to present the declaration of import and pa yment (DIP) issued by the inspection agency to the
Burundi customs authorities.  Post-landing inspection is not permitted.  Goods that have not been
inspected prior to shipment are subject to a penalty of Fbu 1,000,000, payable by the importer at thetime of the customs declaration.
10. The importer is free to choose between either inspection agency.  Preshipment inspection
fees, borne by the importer, are fairly high and amount to 1.5 per cent of the customs value of the
goods (as recorded on the DIP).  The SGS charges a minimum fee (flat rate) per inspection of
CHF275;  Baltic Control charges US$105.
(ii) Customs procedures
11. The Ministry of Finance is responsible for customs administration.  Key customs units were
computerized in 1992 and 1993, using the computerized customs management system (ASYCUDA)
introduced in 1992.
12. On the arrival of the goods in Burundi, the carrier is required to present the manifest, the bill
of lading or any equivalent document to the cu stoms authorities.  Once the documents have been
submitted, the merchandise may be unloaded for clearance.  To obtain clearance, the goods must be
declared on a form using the model established by the Ministry of Finance in 1993.
2  Although the
value of the goods will have been checked during preshipment inspection, Burundi's customs
legislation provides for two additional verification stages:  immediate verification while themerchandise is still under customs control;  and post-clearance verification.  Where the value
established by customs officials pursuant to the customs legislation exceeds the declared value, the
declarant is required to sign an additional declaration.  The declarant may submit any disagreement to
the Director of Customs within a period of five days .   An appeal against the Director's decision may
be lodged, also within a period of five days, with the Minister for Finance.  According to the
authorities, customs procedures generally take two days if the necessary documents are up to date and
                                                     
2 Ministry of Finance (1993), Note concerning the establishment of customs declarations.Burundi WT/TPR/S/113
Page 29
depending on the customs regime applying to the shipment;  they may take 72 hours or more where a
request for exemption is made.
13. Customs duties are paid on the c.i.f. value of imports.  Burundi still applies the Brussels
Definition of Value.  The country's customs legisla tion has not yet been brought into conformity with
the WTO Agreement on Customs Valuation.  Under Burundi law, the customs value is the price
reputably paid for goods in the course of sales th at occur under fully competitive conditions between
independent buyers and sellers.  Sales- and delivery-related expenses are included in the definition of
value.  Notwithstanding this definition, the authorit ies report that the customs administration uses the
price indicated on the invoice when determining customs value.  Comparative and deductive methods
may be used where customs officials are in doubt as to the accuracy of an invoice.  Invoices for goods
of the same origin or from the same supplier are compared in order to determine whether the value
stated on the invoice is admissible.   The SGS or BC evaluation is used as a reference for comparison
with the customs administration's data on sim ilar imports and/or the administered values.
14. There is a pressing need to build the capacity of the customs administration (Chapter II(6)(i)).
In the absence of clear rules, there is a risk of arbitrary evaluation.  This could lead to distortions,
undermine the transparency of the tariff system and entail additional charges for local enterprises andeconomic operators.
15. Burundi is a member of th e World Customs Organization.
(iii) Tariffs, other duties and charges
16. Burundi's tariff policy is mainly the responsibility of the Ministry of Finance, which is
empowered to modify tariffs for any given financial year.  The Ministry has authority to turn ad
valorem  rates into equivalent specific duties.  The national tariff is established in cooperation with the
other ministries concerned, including the Ministries  of Trade and Industry, Agriculture and Livestock,
and Planning and Reconstruction.  Burundi grants at least MFN treatment to all of its trading partners.
It adopted the Harmonized System (HS) in 1992 and currently uses the 1992 eight-digit version.
Burundi has 5,509 tariff lines and all rates are ad valorem . There are no seasonal tariffs.
17. Imports into Burundi may be subject to five main types of duties and taxes:  customs duties;
a service tax;  a transaction tax;  excise duties;  and various consumption taxes, the proceeds of whichare paid into a national solidarity fund.  A surcharge is applied on textile imports. A 4 per cent flat
rate levy is due on the customs value of imports by taxpayers in arrears as an advance payment on
income tax.  Excise duties and the consumption tax are applied on a limited number of domestic and
imported products (tobacco, sugar, beer and soft drinks in particular).  In 2001, customs duties
accounted for 11.5 per cent of total government revenue.  Close to 30 per cent of global State revenuewas derived from trade taxes (Table III.2).
Table III.2
Taxes on trade:   Share of Burundi's total tax revenue, 1995-2001
1995 1996 1997 1998 1999 2000 2001
MFN duties 13.2 9.9 9.4 12.8 11.9 12.1 11.2
PTAa duties 0.5 0.3 0.5 0.2 0.2 0.6 0.3
Transaction tax (imports) 11.3 7.6 8.8 10.7 8.6 13.5 12.3
Overall share of trade-derived revenueb30.6 25.1 23.4 33.9 28.1 31.8 29.6
a I.e. the Common Market for Southern and Eastern Africa (COMESA).
b Including excise duties on imports and export taxes.
Source: Customs Administration, Ministry of Finance.WT/TPR/S/113 Trade Policy Review
Page 30
(a) Structure of MFN duties
18. Burundi's tariff remained unchanged between 1993 (suspension of the first stage in the reform
process following the outbreak of civil war) and 2003.  It comprised 10 rates.  The highest (100 per
cent) was applied on close to 12 per cent of the eight-digit tariff lines;  it was abolished on
1 January 2003, and a 40 per cent rate now applies to all products formerly subject to the maximum
rate and to all products previously taxed at more than 40 per cent.  For products – most of themmanufactures – subject to the 40 per cent rate prior to 1 January 2003, the tariff remains the same.
Raw materials and inputs are taxed at 15 per cent;  capital goods at 12 per cent;  and primary
commodities at 10 per cent.  Eight tariff lines have a zero rate of duty;  the products concerned
include wheat, meslin and submersible warships.
19. The January 2003 tariff reform has lowered the simple average tariff rate from 30.8 per cent
(with a standard deviation of 28.9 per cent) in 2000-2001 to 23.5 per cent (with a standard deviation
of 14.4 per cent).  The elimination of tariffs exceeding 40 per cent has helped reduce tariff dispersion;
the 0.61 coefficient of variation (compared to the previous 0.94 per cent) indicates moderate
dispersion.   Prior to the reform,  37.7 per cent of tariff lines had a 10 per cent rate and 30.4 per cent
of tariff lines stood at 40 per cent.  Since January 2003, the 40 per cent rate has been applied on40.2 per cent of tariff lines and has thus become the modal rate (Chart III.1).
20. The 40 per cent rate is applied on dairy produce;  certain fresh, frozen or prepared vegetables
and fruits;  certain spices;  cereals and most products of the milling industry;  certain fats and oils;
certain flours;  preparations of vegetables, fruits, nuts or other parts of plants;  soap;  photographic and
cinematographic goods;  cotton-based products;  certain man-made filaments and fabrics;  articles of
apparel and footwear;  certain electric appliances;  clocks and watches and parts thereof;  and musical
instruments.  Since January 2003, this rate has also applied to all products formerly subject to rates ofover 40 per cent, including those previously subject to the 100 per cent rate, such as certain textile12.1%
0.3%30.4%
0.0% 0.1%7.3%11.9%37.7%
0.1% 0.0%42.8%
05001,0001,5002,0002,500
0 6 10 12 15 20 38 40 70 1002002
2003Chart III.1
Breakdown of a pplied MFN duties, 2002 and 2003a
a
Source:The maximum rate was lowered to 40 per cent in January 2003.  The 70 and 100 per cent rates therefore 
refer only to 2002.
WTO Secretariat calculations, based on data su pplied b y the Burundian authorities.Number of tariff lines
2002
2003Burundi WT/TPR/S/113
Page 31
products, footwear and articles of apparel;  articles of jewellery;  certain household appliances;  car
radios, private motor vehicles of a given horsepower and cylinder capacity;  toys;  live animals, meat
and preparations of meat;  fish and fisheries products;  certain vegetables (onions, cabbage and carrots
in particular);  most fresh fruits;  coffee, tea, maté, cocoa, and cocoa preparations;  alcoholic and non-
alcoholic beverages;  and tobacco.
21. The 10 per cent rate applies to starch;  miscellaneous grains;  vegetable saps and extracts;
plants or parts of plants used in perfumery or in pharmacy;  certain animal and fish fats;  mineral
products and ores;  most mineral fuels;  organic and inorganic chemicals;  fertilizers;  certain tanning
or dyeing extracts, pigments and other colouring matter;  certain albuminoidal substances and
modified starches;  most plastics and plastic products;  most rubber products;  certain types of wood
and wood products;  raw wool and animal hair;  raw cotton;  man-made filament yarn not put up forretail sale;  glass;  certain types of cast iron and iron or steel products;  and copper, zinc, lead and tin,
and most products derived therefrom.  The 12 per cent rate is applied on certain cements;  tools;
certain types of machinery and mechanical appliances;  most motors and transformers, and railway
locomotives and rolling stock.  The 15 per cent ra te applies mainly to machinery such as office
machinery, machine-tools, metalworking machinery and medical apparatus.
22. Agriculture (ISIC
3 Division 1, Rev. 2) is the most protected sector.  Before January 2003, the
simple average tariff rate was 67.5 per cent, with a standard deviation of 39 per cent.  Agriculture had
the largest proportion of tariff lines with rates of above 50 per cent (Chart III.2).  The tariff reform,
and in particular the elimination of rates exceeding 40 per cent, has helped to lower the average to
32.8 per cent.  Strong tariff protection of some agricultural items perpetuates the inefficiency and lack
of competitiveness of production units, which – all things being equal – confines them to local market
production.  The mining and quarrying sector is the least protected, with a 12.2 per cent average tariff(vs. 16.3 per cent before January 2003).  The current average tariff in manufacturing is 23.2 per cent
(vs. 29 per cent before January 2003).  The mean tariff on agricultural products is 32.6 per cent, when
the WTO definition is used, and 22.1 per cent on non-agricultural products (Table AIII.1).
23. The breakdown of tariff lines at the two-digit level shows that, overall, escalation is mixed;
this trend has not been reversed by the January 2003 tariff reform, because the latter has curbed butnot eliminated negative escalation from the first to the second stage of processing, inasmuch as the
average tariffs before January 2003 were 47.3 per cent and 20.4 per cent, respectively, compared with
25 and 18.4 per cent today.  There is positive escalation from the second to the third stage of
processing, with an average rate of 33.4 per cent before January 2003 and of 26.1 per cent today.
These figures generally reflect the tariff structure in the different industries.  Except for textiles,clothing and leather;   manufacture of paper and paper articles, printing and publishing;  the chemical
industry;  and the base metal industry, on which tariffs escalate through all three processing stages
(following the January 2003 reform, rates in the food, beverage and tobacco industries are also
showing positive escalation), in all the other industries tariff escalation is equally mixed (Chart III.3).
Hence, without taking into account tariff concessions and/or other incentives, such a structure ishardly conducive to investment, especially in industries displaying negative tariff escalation.
24. The Government intends to continue with the re form of its MFN tariff.  In the medium term,
the incentive for lowering MFN tariff rates will come from Burundi's partic ipation in the COMESA,
especially as Burundi will have to align its MFN tariffs with the COMESA common external tariff
(CET) (Chapter II(5)(ii)(a)).  Considerable adjustments will have to be made because of the
discrepancies between the present structure of Burundi's tariff and the planned structure of the CET.
                                                     
3 International Standard Industrial Classification (ISIC).WT/TPR/S/113 Trade Policy Review
Page 32
25. During the Uruguay Round, Burundi bound the rates for almost 20 per cent of its tariff lines.
All tariffs for agricultural products (WTO definition) were bound at a ceiling rate of 100 per cent,
with the exception of some 6 per cent of lines that had already been bound.4  For non-agricultural
products, rates for less than 10 per cent of the tariff lines were bound at 24.2 per cent for textiles and
clothing;  20.2 per cent for leather, rubber and footwear;  and 11.2 per cent for transport equipment.
a
Source:0102030405060708090100
All products
Industry
Mining sector
Agriculture
Exempt 0- 10 10- 20 20- 30 30- 40 40- 50 >500102030405060708090100
All products
Industry
Mining sector
Agriculture
Exempt 0- 10 10- 20 20- 30 30- 40 40- 50 >50
International Standard Industrial Classification (ISIC), Rev. 2, one-digit.
WTO Secretariat calculations, based on data supplied by the Burundian authorities.(b) 2003(a) 2002Chart III.2
Breakdown of MFN duties by sectora, 2002 and 2003
Percentage
                                                     
44 Burundi's previous Schedule of tariff bindings (Schedule LV), established in 1967, contains tariffs
bound in the zero to 20 per cent range.  The Schedule has still not been transposed into the Harmonized System.Burundi WT/TPR/S/113
Page 33
051015202530354045
020406080100120
Chart III.3
Tariff escalation, 2002 and 2003
Percentage
Note:  Product groups by ISIC 2-digit heading.
Source:  WTO Secretariat calculations, based on data supplied by the Burunidan authorities.(a) 2002
(b) 2003
(b) Other duties and taxes
26. A 6 per cent service tax is levied on imports regardless of origin.  It is applied on the customs
value prior to the payment of customs duties.
27. Imports of certain textile products (HS 63.09) are subject to a 20 per cent surcharge on the
customs value of the goods to provide additional protection for the Bujumbura Textile Complex
(COTEBU).
28. The transactions tax was introduced in 1968.  It was extensively overhauled in 1989, and from
then on was no longer levied at each stage in the process but only at the final point of destination, soas to eliminate the cascading of duties.  It can thus be likened to value-added tax.
5  The transaction tax
is applied on domestic and imported goods and services alike;  depending on the product, the rate may
                                                     
5 Value-added tax is scheduled to be introduced by late 2003.WT/TPR/S/113 Trade Policy Review
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vary for imported and domestic goods.  The taxable base for imports is the customs value of the
goods, plus customs duties.  The tax is levied on the ex-factory price of locally-produced goods and
represents a substantial share of government revenue (Table III.2).  Over 50 per cent of revenues from
the transaction tax are derived from imports.
29. All imports are taxed at a rate of 17 per cent.  Domestic products are subject to two different
rates, i.e. 17 per cent on manufacturers' sales;  local industrial beverages such as beer, carbonated andnon-carbonated beverages;  and sales of goodwill;  and 7 per cent on real estate sales;  meat from
animals for slaughter and prepared meat products;  agricultural, fisheries and stockbreeding products;
and banking operations.  In these production sectors, the transaction tax has a discriminatory effect
and is tantamount to additional protection – the more so as these sectors are subject to some of the
highest rates in the tariff.  The 17 per cent rate applies to all services-related transactions excepttelecommunications (20 per cent).
30. As part of its efforts to boost public revenue, in 2001 the Government introduced ad valorem
excise duties on products such as beer (the Primus brand being taxed at 86 per cent and the Amstel
brand at 31 per cent), carbonated beverages (18 per cent), and tobacco (58 per cent).  Sugar is subject
to a specific excise duty of FBu 50 per kg.  These duties are levied on imports and domestic productsalike, at the same rate as the transaction tax.   Products for export are exempt from such duties.
31. The Government has also introduced several consumption taxes on a variety of products,
which are paid into a solidarity fund.  These taxes are in addition to excise duties and are levied on
beer, carbonated beverages, cigarettes, sugar and alcoholic beverages.  Beer and carbonated beverages
are taxed on a per-bottle basis, i.e. 23 per cent for Primus beer;  17 per cent per 65-cl bottle and 19 per
cent per 33-cl bottle of Amstel beer;  22 per cent per 33-cl bottle of Amstel bock;  21 per cent for
carbonated beverages;  21 per cent for "Vitalo";  and 17 per cent for "Dynamalt".  Tobacco productsare taxed at a rate of 11 per cent per carton.  Othe r imported beverages are subject to a 10 per cent tax.
32. A 4 per cent flat rate levy is imposed on the customs value of goods imported by taxpayers in
arrears, as an advance payment on income tax.
33. During the Uruguay Round, Burundi bound its other import duties and charges at a rate of 30
per cent.
(c) Tariff preferences
34. The main tariff preferences are those granted to COMESA member countries;  they cover
2,381 tariff lines.  Preferences under the Economic Community of the Great Lakes Countries are not
applied (Chapter II(5)(ii)(c)).
35. Burundi plans to join the COMESA free-trade area in January 2004.  To that end, it has made
tariff cuts which allowed it in principle to accord a preferential margin (reduction) of around 60 per
cent on the rates applied under its MFN tari ff on imports from the COMESA in 2002
(Chapter II(5)(ii)(a)).  The reduction did not apply to all tariff lines that were not subject to the MFN
zero tariff rate.  The extremely high preferential rate (78 per cent) on tea, coffee and cocoa, for
example, obviously indicated a tariff cut of less than 60 per cent.  Other products such as frozen meat,cocoa paste and mineral water were not included in the preferential scheme.
6
                                                     
6 Close to 880 tariff lines had preferential rates exceeding 15 per cent, and some 3,230 tariff lines were
not covered by Burundi's preferential scheme.Burundi WT/TPR/S/113
Page 35
36. Under the reform process launched in January 2003, Burundi has introduced a new
preferential tariff for COMESA member countries,  providing for a standard reduction of 80 per cent
of all MFN rates in force since 1 January 2003.  As from January 2004, all products from COMESA
countries are due to be granted duty-free entry into Burundi.  The tax loss, of the order of 1.6 per cent
of total revenue, should be negligible. 7
(d) Rules of origin
37. Burundi has both non-preferential and preferential  rules of origin.  Under the non-preferential
rules, goods are considered to originate in the country in which they are wholly produced.  The
country of origin of manufactured goods is their last place of processing, provided that they contain
no less than a given content of local labour or materials.  The Minister for Finance fixes the minimum
value-added content, which currently stands at 35 per cent across the board.
38. Burundi applies preferential rules of orig in under the COMESA (C hapter II(5)(ii)(a)).
(e) Duty and tax concessions and exemptions
39. Customs duty and tax concessions and exemptions are specified, as the case may be, in the
customs legislation, the Tax Code, the Investment Code, the 1988 Export Promotion Law
(Section 3(iv)), the Mining Code, and the Law of August 2000 on Mining Companies.8  Th e  m a i n
concessions are designed to provide production incentives in certain sectors (agriculture in particular)
or to promote exports, job creation or the establishment of enterprises outside the Bujumbura area.
40. Entry into Burundi is duty-free for imports by the State;  foreign NGOs;  diplomatic
representations and international agencies;  enterprises eligible under the Investment Code;
medicines;  agricultural inputs;  humanitarian aid;  and enterprises operating under the free-zone
regime (Section (3)(v)).  Over the period 1994-2001, the total value of exemptions granted per annum
represented between 15 and 16 per cent of imports.
41. Goods in transit are not subject to import or exit duties.  A bond is required to guarantee the
payment of any duties or fines due.  Under the 1971 customs legislation, imports admitted for
warehousing are exempt from entry duty until they  are released for consumption in Burundi or re-
exported (temporary entry).  The goods must be stor ed in government warehouses designated by the
Ministry of Finance or in specific warehouses made available by the Ministry.  The following may notbe deposited in government warehouses:  live animals;  goods not authorized for import or transit;
goods exempt from import duties;  goods that are not safe or of marketable quality;  hazardous and
insalubrious materials;  and any other goods prohibited for deposit, by decision (subject to
publication) of the Finance Ministry.  No limits are imposed on the duration of warehousing.  The law
does not specify the operations to which the goods may be subjected and the Ministry of Finance isempowered to authorize certain operations.  The assignment of specific warehouses was suspended
after the Government noted that the goods might remain there indefinitely.  The Government is
considering the adoption of new legislation to restrict warehousing to a period of one year, subject to
the posting of security in the amount of the merchandise deposited, plus a possible 25 per cent
penalty.
42. Agricultural and stockbreeding inputs and equipment are exempt from the transaction tax (as
well as customs duties).  These include seeds;  phytosanitary and animal health products;  handtools
exclusively for use in agricultural, zootechnic, fore stry, fishing or fish farming activities;  heavy-duty
                                                     
7 Kadede, T., T. Yamuremeye, and A. Batungwanayo (2001).   
8 See Chapter IV(3)(i).WT/TPR/S/113 Trade Policy Review
Page 36
machinery and equipment (e.g. rotary cultivators, ploughs and milking machines, but not tractors);
livestock of duly recognized improved breeds;  and compound cattle feeds.  Exemptions are granted
on the recommendation of an inter-ministerial comm ission that specifies the tax exemption(s) for
which the importer is eligible.  For refunds, a cheque is issued by the national treasury and cashed by
the importer at the customs administration.  Exemptions are not budgeted.  They can prove complex
to administer because of the wide variety of products concerned and the fact that they are granted onthe basis of the product's end use, which at present is not verified.  The Government is considering a
review of its policy on inputs in order to promote the processing of agricultural products.
43. Under the Investment Code, cottage industries, small- and medium-sized enterprises (SMEs),
export production enterprises, regional enterprises, decentralized enterprises, "officially approved"
enterprises,  and long-term projects extending over more than four years are eligible for total or partialexemption, for a period of five years, from import duties on capital goods used in the production
process, the initial shipment of spare parts, an d raw materials.  They are also exempt from the
transaction tax on capital goods used in the production process and the initial shipment of spare parts.
The National Investment Commission issues reco mmendations on the scope of exemptions to be
granted and the final decision is taken by the Council of Ministers.  There are no precise rules fordetermining the extent of certain benefits granted (for example, whether exemption should be partial
or total).  The value of investment-related tariff  exemptions has always represented a fairly minor
proportion of the total value of tariff exemptions.  With the exception of the year 2000, when they
reached FBu 2.4 billion, i.e. 11 per cent of the to tal value, investment-related exemptions generally
account for less than 1 per cent of the value of exemptions as a whole.
44. The margin of discretion under the Code for determining the scope of exemptions and
concessions could undermine the benefits of the inve stment promotion framework.  It could lead to
discrimination, jeopardize transparency and prevent proper implementation of tariffs.  The
Government is aware of the interpretation problems raised by the Code and is considering its revision.
45. The adoption of the Ministerial Order of September 2002 establishing a duty and tax offset
scheme through a refund by special treasury cheque  shows that the Government is aware that the
current tariff exemption and concession system hampers the national budget planning andimplementation process and makes it difficult to asce rtain the exact amount of the exemptions granted
and whether they are legally justified.  As shown in Chart III.4, the "other exemptions" category
represents a major proportion of all tariff exemptions granted.  This type of exemption has increased
since 1998, both in terms of absolute value and in relation to the global value of exemptions.  A
permanent unit in charge of examining applications for exemption has been set up under Ministry ofFinance responsibility.  In its examination of application files, the unit is required to consider the
following:  the law on which the requested exemption is based, an estimate of the operations involved,
and the volume and destination of the products.  Quarterly evaluations are scheduled in order to
disqualify persons no longer eligible for State subsidies.
46. The cost (including the fiscal cost) of Burundi's incentives regime and the difficulties
involved argue in favour of rationalizing the tariff structure.  This would help limit the number of
applications for incentives and would prove beneficial in particular for smaller enterprises and rural
entrepreneurs, for whom the process of obtaining exemptions is often arduous and costly.
(iv) Import prohibitions, quantitative restrictions, and licensing
47. Over the period 1993-2000, Burundi had gradually expanded its negative list of prohibited or
controlled imports, the Government arguing a foreig n currency shortfall to justify the measure.  In
order to address the problem, a licensing system was applied until August 2002.  As the peace processBurundi WT/TPR/S/113
Page 37
advanced, prohibitions were progressively lifted.  Bans currently apply on items such as narcotic
drugs, ivory, weapons and ammunition.  A prohibition on imports of cotton duck was introduced in
April 2000.
48. For many years, Burundian law distinguished between two categories of import licence –
ordinary licences providing for foreign currency payments, and licences not allowing payments in
foreign currency.  The first category covered imports of staple goods (defined as such according to alist established by the Government), for which foreign currency could be purchased from the
commercial banks through an auction market.   There were no limitations on the countries of origin of
the goods.  Licences not allowing foreign currency payments concerned all products other than staple
goods.  Currency for purchasing such goods was acquired either through the commercial banks
(though not through the auction market), or through unofficial sources.  This distinction wasintroduced in order to remedy Burundi's foreign currency shortfall.  The BRB could set priorities
when defining the products subject to licensing.  A multiple exchange rate system emerged as a result,
since all imports of goods not on the positive list and imports of services had to be paid for through
unofficial channels.
49. On 28 August 2002, having abolished its positive list, Burundi adopted a unified system with
a single type of licence.  The BRB has a foreign exchange auction for all imports.  Import licences are
now required solely for statistical purposes.
05,00010,00015,00020,00025,000
1994 1995 1996 1997 1998 1999 2000 2001Other Exemptions
Investments
Government
Dipl. Missions/NGOsChart III.4
Exemptions from customs duty, by category of beneficiaries, 1999-2001
Source: IMF, Burundi, Statistical Annex , 2 October 2002 Millions of Burundi francsWT/TPR/S/113 Trade Policy Review
Page 38
(v) Anti-dumping, countervailing and safeguard measures
50. Burundi has no anti-dumping, countervailing or  safeguard legislation.  Until December 2002,
it had taken no action in these spheres.
(vi) Standards and other technical requirements
(c) Standards, tests and certification
51. The legal basis for Burundi's standardization system is the December 1999 Decree-Law
establishing a standardization and quality control system.  The Burundi Standardization and Quality
Control Bureau (BBN), created in 1992,9 is the official standardization and quality control agency.  It
is responsible for defining and implementing standards and for ascertaining product conformity and
quality for both imports and exports.  The BBN helps enterprises introduce quality assurance schemes
commensurate with their technical and economic capabilities and conducts outreach activities amongprivate operators.  It also prepares the adoption, adjustment and development of national standards as
a key component of the Government's strategy for boosting the private sector so that it can penetrate
international markets.  The BBN's budget is almost entirely State-subsidized, contributions having
increased from FBu 23.3 million in 1998 to FBu 35.2 million in 2002.  In 2001, the BBN also
received FBu 10.8 million worth of aid through the private sector promotion fund.  Revenue fromservices rendered (certification) remains negligible.  The BBN is a member of the International
Organization for Standardization (ISO).  It cooperates with four national sampling and analysis
laboratories.
52. Burundi does not yet have any national standards.  It uses the Codex Alimentarius ,
International Electrotechnical Commission (IEC) and ISO standards and the standards in force in
some European countries – such as Belgium – as a reference.  The Minister for Trade and Industry
decides whether a standard is mandatory for any product or process, but by year's end 2002, no suchmandatory standards applied.  Burundi has not yet signed any mutual recognition agreement.
53. The BBN has prepared three draft standards on bread flour, kitchen salt and labelling of pre-
packed foods.  All technical aspects have been completed, and by late 2002 the draft standards were
pending approval by the National Standardization and Quality Control Board (see below).  In 2002
and 2003, the BBN plans to work on the development of a national drinking water standard;  theadoption of the EEC standard for biological products;  the adaptation of the ISO standard for coffee;
the adaptation of the ISO standard for tea;  the development of a national standard for industrial
discharge;  the adoption of the Codex Alimentarius  standard for sugar;  the development or adoption
of a standard for cement;  the development of a standard for COTEBU cotton yarn and textiles;  and
the development or adoption of a series of standards for the agri-food sector, in line with COMESAstandards.
54. Draft standards prepared by the BBN are published in the newspapers or via press releases.
Anyone interested may send suggestions to the BBN in  writing within a period of six months counted
from the date of publication of the draft.  The texts are then submitted to the Minister for Trade for
approval, within a period of four weeks, on the advice of the National Standardization and Quality
Control Council, which is composed of the follow ing members, as specified in Article 3 of Decree
No. 100/232 of 13 December 1989 on the establishment and organization of the National
Standardization and Quality Control Council:  three State representatives;  four representatives of
university or research institutes;  one representative of the Chamber of Commerce, Industry,
Agriculture and Handicrafts;  one representative of the business community;  one consumer
                                                     
9 Decree-Law of 17 May 1992 establishing the Standardization and Quality Control Bureau.Burundi WT/TPR/S/113
Page 39
representative;  two members appointed for their specific expertise;  and one representative of the
standardization and quality control agency.  The func tions of the Council, as laid down in Article 2 of
the Decree, are to draw up guidelines and make recommendations to the Minister responsible for trade
on standardization and quality control policy;  and to examine and adopt draft standards or codes of
good practice submitted to it by the standardization and quality control agency.
55. Any product whose manufacturer or producer complies with the applicable standards is
eligible for a certification mark.  The law dis tinguishes between the "structured" and the "non-
structured" sectors without, however, providing a definition for either.  The structured sector is
automatically subject to standardization and quality control standards.  Products in the non-structured
sector may be subject to this regime by order of the Minister for Trade.  Products already certified and
destined for export may be subject to preshipment inspection.  Imports may also be subject to qualitycontrol.  This is a responsibility entrusted to the BBN under the Decree-Law of 13 December 1989
establishing a standardization and quality control system, but to date there is no implementing
legislation specifying control procedures (inspection and testing procedures, and related fees).  In
practice, the BBN tests imports at the request of the economic operators involved.  The parameters for
analysis are based on international standards or otherwise on the supplier's standards.  Analyses areperformed with technical support from Burundi's national laboratories, and the results are interpreted
by the BBN.
(d) Sanitary and phytosanitary requirements (SPS)
56. Burundi's legislation on sanitary measures dates back to the colonial era.  It applies to
products such as coffee, tea, rice and meat but there are no implementing provisions.  Although the
private sector and civil society have requested the application of sanitary measures – in particular in
view of dioxin contamination of certain imports from Belgium – this has not been done due to lack ofresources.  Burundi has no quarantine legislation.
57. Decree-Law No. 1/033 of 30 June 1993 establis hing plant protection in Burundi is the
country's main phytosanitary law.  Its provisions cover pesticide control (70 approved pesticides,
while the production, marketing or importation of 38 others is banned);  border control of plant
imports and exports, and the issuing of phytosanitary certificates to exporters, or certificates of re-shipment consistent with international IPPC models  and the importing country's requirements;  a code
of conduct on pesticide management;  and standardization and quality control of exports from and
imports into Burundi.  Under the phytosanitary law, responsibility for control and inspection is
entrusted to the Ministry of Agriculture and Live stock's Plant Protection Department, which charges
inspection and certification fees.
58. There are no phytosanitary prohibitions.  However, Burundi does not authorize the deposit of
live animals on its territory.
(e) Marking, labelling and packaging
59. The Commercial Code provides that the Ministry of Trade may, inter alia , lay down
requirements regarding the composition, quality and denomination of goods intended for sale and theaffixing of indications specifying their origin, composition, weight, volume, quantity or
measurements.
60. A draft pre-packed food labelling standard has been drawn up, but by late 2002 it had not yet
been approved.  The Codex Alimentarius  food labelling standard is the key reference in this regard.WT/TPR/S/113 Trade Policy Review
Page 40
(vii) Government procurement
61. The following are the main legal instruments relating to government procurement:  Decree-
Law No. 1/015 of 19 May 1990 laying down the basic provisions on government procurement;
Decree No. 100/20 of 18 August containing genera l requirements;  Ministerial Order No. 540/267 of
20 August 1990 fixing the ceiling for contracts awar ded through direct agreement;  and Ministerial
Order No. 540/268 of 20 August 1990 determining the ceiling for investment contracts awarded bythe boards of directors of State enterprises of an industrial or commercial nature or public
corporations.
62. The head of the Government is responsible for awarding contracts, but he may delegate this
authority to the Minister responsible for finance or the contractor (i.e. the legal person designated in
the specifications as the person commissioning the work).  Government procurement is administeredby the Directorate General of Government Procurement, which supervises a Central Government
Procurement Commission and a Dispute Settlement Commission.  The Central Government
Procurement Commission examines the technical aspects, with the aid of a technical sub-committee,
and the financial aspects, then transmits its recommendations to the Directorate General.
63. The provisions apply to all government procurement for works, supplies and services by the
State, the communes, autonomous State-run departme nts, State institutions, public corporations, and
regional development corporations.  Routine contracts for regular supplies or services awarded by
State enterprises of a commercial or industrial nature or public corporations are not subject to the
regulations on government procurement;  in the case of investment contracts awarded by such bodies,
the Ministry of Finance fixes a threshold according to the nature of the enterprise and the contract and
any contracts above this threshold must be submitted to the Central Government Procurement
Commission.  The relevant thresholds are FBu 100 million for supplies and FBu 25 million forservices.  Contracts exceeding FBu 2 million awarded by government authorities must also be
submitted to the Central Government Procurement Commission.  Contracts exceeding FBu 5 million
awarded for the purpose of independently managed projects, or on behalf of State enterprises of an
administrative nature, autonomous State-run departme nts or regional development corporations must
be submitted to the Central Government Procurement Commission through the Directorate General ofGovernment Procurement.
64. The law distinguishes three ways of awarding contracts:  invitation to tender;  public
adjudication;  and direct agreement.  In general, contracts must be awarded through an invitation to
tender and the other methods can only be used on an exceptional basis.  The tendering procedure
begins when the invitation is made known to the public by means of a notice.   The deadline forreplies may not be less than 60 days nor exceed 120 days.  Bids are sent by registered post with
acknowledgement of receipt or submitted during the public opening of the bids.  Two envelopes are
required:  an outer envelope containing the techni cal details and an inner envelope showing the price
proposed.  The envelopes are opened in two stages, in public, under the supervision of the Central
Government Procurement Commission.  The technical details are first considered by a technical sub-committee, which makes its recommendations without taking into account the financial aspects.  The
sub-committee's report is transmitted to the Central Government Procurement Commission, which
selects the most technically and financially advantageous bid.  The law does not define the relative
weighting to be given to the financial and technical aspects.  The Central Commission's
recommendation is then transmitted to the authority awarding the contract through the Directorate
General.
65. Contracts awarded through public adjudication only apply to the purchase of supplies or
services that do not involve any special technical requirements and for which price is the mainBurundi WT/TPR/S/113
Page 41
criterion.  The procedure is the same as the invitation to tender, except that the technical sub-
committee does not have any role to play.
66. Direct agreement applies in the cases defined in  the Law.  For example, when the contract is
deemed to be too small and the total cost is less than the threshold fixed by the Ministry of Finance,
FBu 2 million for Government departments and FBu 5 million for projects; when works, supplies or
services can only be furnished by a single supplier for technical reasons or because substantial priorinvestment is needed;  for reasons of national security;  if the works, supplies or services can only be
furnished by a monopoly or the holder of a patent or licence.
67. At the request of one of the parties, any disagreement between the Government and a bidder
or contractor may, in the first instance, be submitted to the Directorate General of Government
Procurement for arbitration.  If no friendly settlement can be reached within a period of one month,the disagreement becomes a dispute and is brought before the Dispute Settlement Commission, which
must take a decision within four months from the date on which the case was brought before the
Directorate General of Government Procurement (subject to a reasoned decision by the President of
the Dispute Settlement Commission, a one-mont h extension may be granted).  The Commission
notifies the parties of its decision in writing.  The parties may bring the matter before the competentcourt within 90 days of the decision.
68. Burundian enterprises are given some preferences in order to promote the consumption of
locally-produced goods, namely:  10 per cent for construction contracts;  15 per cent for supplies and
services contracts;  and 20 per cent for contracts for studies.  Domestic enterprises are those listed in
Burundi's Commercial Register whose headquarters or  principal establishment is in Burundi and the
majority of whose equity is owned by Burundian citizens.
69. The total value of government procurement in 2000, 2001, and 2002 was FBu  4.5 billion,
FBu 18.3 billion and FBu 6.1 billion respectively.  Contracts for works and supplies account for
80 and 90 per cent of the value of government procurement.  According to the Government, the
foreign share of government procurement is negligible,  less than 5 per cent of its overall value.
(viii) Local content requirements
70. The Investment Code does not contain any such requirement.  The Free Zone Law requires
enterprises in such zones to create "substantial" value added, i.e. at least 35 per cent, a threshold that
was fixed in a ministerial order in July 2001.
(ix) Other measures
71. According to the authorities, Burundi has never applied trade sanctions other than those
authorized by the United Nations Security Council or the regional organizations to which it belongs.
72. There is no official counter-trade or barter provision nor any agreement designed to affect the
value or quantity of goods or services exported to Burundi.
(3) 
MEASURES DIRECTLY AFFECTING EXPORTS
(i) Registration and documents
73. Every exporter must be a registered trader (Section 2)(i) above.  Registration provides access
inter alia  to the necessary export financing.  Revenue must be repatriated within 30 days following
the customs declaration, or 90 days if exportation is not effected by air.  Revenue from exports ofWT/TPR/S/113 Trade Policy Review
Page 42
coffee, tea or cotton must compulsorily be surrendered to the Central Bank, usually at a rate less
favourable than that applied by the commercial banks.  In the case of manufactures, 70 per cent of
revenue has to be surrendered, while the proportion for services is 50 per cent.
74. The foreign currency surrender requirement operates as an implicit export tax.  The
Government plans to introduce a single repatriation rate of 70 per cent for all categories of goods.
(ii) Export taxes
75. Most products are subject to a 5 per cent export tax on the sales price plus packaging costs.
Higher rates are applied to certain primary commodities:  15 per cent on fresh vegetables, flour,
cereals and grains;  and 6 per cent on tea.  Green coffee beans are subject to the 31 per cent rate, but
the tax has not been collected since 1999, given the difficulties encountered in that subsector.  Raw
hides and skins, leather, furskins and articles thereof are taxed at 3 per cent and mineral ores at 1 percent.  The Government plans to eliminate export taxes and charges from 1 January 2003.
(iii) Export prohibitions, limitations and controls
76. Coffee berry exports are banned.  Exports of sugar are subject to a quota which varies
depending on local demand.  The sugar quota is managed through the SOSUMO company ( Société
sucrière du Moso ), which has a production monopoly.  The State determines the quantity of sugar to
be sold to distributors in each region according to their estimates of demand and the market price for
sugar.  Export controls are effected for statistical purposes.  Burundi has concluded no voluntary
export restraint agreements.  As a party to the Convention on International Trade in Endangered
Species of Wild Fauna and Flora (CITES), Burundi prohibits ivory exports.
(iv) Subsidies and export duty and tariff concessions
77. The main instruments of export promotion are the incentives described in customs legislation,
the 1988 Export Promotion Law, the Investment Code and the Free Zone Law, and incentivesprovided through the Export Promotion Fund.
78. The provisions of the Tax Code authorize exporting companies to deduct 50 per cent of their
export profits from earnings subject to the business tax.  The basic incentives are exemption from
customs duties and from the transaction tax on production goods, and exemption for a period of up to
eight years from the profits tax, the moveable property tax and the land tax.
79. Importers may be eligible for drawback of customs duties when re-exporting goods.  For that
purpose, the importer is required to provide the declaration of entry for consumption and the relevant
invoices or statements containing a detailed description of the goods and of the number of packages.
Duty refunds are dependent on identification of the goods based on a detailed inspection at the
customs office of exit, and on production of an import licence issued at the customs office of thecountry of destination.  Goods of Burundian origin may be re-imported duty free on a decision by the
Ministry of Finance, and following a written request by the importer, who must specify the nature of
the articles to be re-imported and the reason for their return.
80. The 1988 Export Promotion Law had established different incentives for exporters of
manufactures, including exemption from export duties and the introduction of a drawback system forthe refund of customs duties and other charges on packaging products and inputs intended for the
manufacture of exports.  A Ministerial Order of 1991 automatically granted exporters 10 per cent of
the value of export products in the form of an instrument of title issued by customs and payable by the
BRB into a special drawback account.  The transaction tax and other indirect taxes on inputs andBurundi WT/TPR/S/113
Page 43
packaging items intended for the manufacture or packaging of exportable goods were refunded
through a tax credit system.  The profits tax was reduced to 50 per cent of the normal rate, and
exporters were given the option to use convertible accounts up to a limit of 30 per cent of export
income.
(v) Free zones
81. The Free Zone Law provides for four types of free zone enterprise:  agricultural and
stock-breeding enterprises, industrial and handicraft enterprises, commercial enterprises;  and service
enterprises.  Some activities do not qualify for the free zone regime:  trade in precious metals and
mineral ores;  exploration, mining, enrichment, refining, buying and selling of mineral ores;  and
coffee-related activities such as roasting.  One of th e conditions of eligibility is export of the entire
output (in the case of commercial firms, import and re-export of imported goods in an unaltered stateor after packaging).  The generation of "substantial" value added (of at least 35 per cent) is a condition
applicable to agricultural and stock-breeding, industrial and craft enterprises in free zones.  The
service enterprises eligible for free zone enterprise status are those intending to provide one or more
of the following services:  assembly of computer equipment;  software manufacture;  packaging for
export;  printing and publication;  production and distribution of cinematographic films;  soundrecording;  and organized tourism services.  Both foreign and domestic investors may obtain free zone
status.  An advisory commission set up by the Ministry of Trade and Industry is responsible for free
zone enterprises.
82. The tax benefits granted by the decree-law are total exemption from existing or prospective
indirect taxes, from registration fees and stamp duties, and from profits tax during the first ten years of
operation, followed by a regime in which the taxation rate is reduced to 15 per cent instead of the
standard 40 per cent rate.  Any free zone enterprise that has created more than 100 permanent jobs forBurundian nationals is subject to a 10 per cent profits tax, and any free zone enterprise which
reinvests at least 25 per cent of the profits earned over the last ten years of its existence pays 10 per
cent less than the standard rate.  Commercial free zone enterprises are liable to a 1 per cent turnover
tax, this rate being reduced to 0.8 per cent in cases where the enterprise creates more than 20
permanent jobs.  The dividends distributed to shareholders are exempt from all taxes during thelifetime of the company.  Free zone enterprises are also exempt from the 3 per cent tax on the wages
of foreign workers.
83. The following customs benefits are granted to free zone enterprises:  exemption from all
present or future direct or indirect duties on imports of raw materials, intermediate products,
ancillaries and capital goods;  outside-quota exports;  and exemption from any present or future director indirect export duties.  Free zone enterprises receive no other benefits such as preferential rates for
electricity, water or telephone services, nor any assistance with installation or infrastructure.
84. The following are the main obligations of free zone enterprises:  to train Burundian staff and
to give priority, where qualifications are equivalent, to recruiting Burundian nationals;  to produce
goods or services exclusively for export;  and to submit to the Minister responsible for foreign trade,at the end of each year, a report showing the implementation status of the commitments undertaken.
Foreign investors are required to pay a 2 per cent tax on the total amount of their investments to the
National Treasury.  Capital goods imported duty free may not be moved from a place approved by the
Minister without written authorization.  Finished manufactures produced by the company and raw
materials, intermediate products and ancillaries imported duty free may be moved only for purposes
of export, re-export or sale on the local market.  In the latter case, authorization from the Minister for
Trade and Industry is necessary, and sales on the customs territory may not exceed 10 per cent ofoutput.  Such sales are subject to the normal customs regime, meaning that they are treated as imports.WT/TPR/S/113 Trade Policy Review
Page 44
85. The overall performance of free zone enterprises to date has been mediocre, largely on
account of the crisis that has affected Burundi.  Of the 36 companies granted free zone enterprise
certificates, 21 were approved in 1993 and 1994.  New applications for approval have become few
and far between:  since 1999, seven enterprises have been approved.  Of the 36 approved enterprises,
13 were still functioning at the end of 2002.  Of the 23 enterprises no longer in existence, 13 were
never able to start up because of the crisis, five ceased their activities because of the crisis, and thecertificates of five others were withdrawn either on account of irregularities or following the
exclusion of their subsector (mineral ores, coffee) from the free zone regime.  Of the 13 enterprises
still active, 12 were operating in the flowers/fruit/vegetables subsector.  The aggregate value of
exports by these companies was FBu 30.9 million in 2000 and FBu 72.4 million in 2001, i.e. a
negligible proportion (less than 0.3 per cent) of Burundi's total exports.
(vi) Export promotion and financing
86. An export promotion fund was set up in January 2000 for the purpose of granting 36-month
loans at preferential interest rates of between 6 a nd 9 per cent (the commercial rates are of the order of
25 per cent).  The loans have a grace period of up to nine months.  A joint private and public sector
committee determines whether projects qualify for such loans.  In its first year of operation, nearly20 projects (most in the agricultural sector) were approved, for a total value of close to FBu 1 billion.
87. In the past, the Government had set up specialized funds intended to provide specific support
to certain sectors, among them the National Guarantee Fund, established to facilitate the promotion of
agricultural enterprises and of small and medium-s ized craft, industrial, commercial or services
enterprises unable to provide sufficient guarant ees;  and the Investment Support Fund (FOSIP), which
was meant to supplement small businesses' own resources.  These two funds have ceased operations
because of a lack of resources.
88. The National Economic Development Bank (BNDE ) grants long-term loans, mainly to the
agricultural sector (Chapter IV(2)(i)) totalling FBu 6.4 billion in 2002.  The interest rate on such loans
is 21.5 per cent, which is the rate applied by all commercial banks for long-term loans.  The project
selection criteria applied by the BNDE are those routinely used by commercial banks.
89. Although the Government recognizes the importance of organizing fairs and exhibitions to
promote exports, this type of activity is hampered by a lack of finance.
(4) 
MEASURES AFFECTING PRODUCTION AND TRADE
(i) Incentives
90. The main incentives are those described in the Investment Code.  They are aimed at both
import substitution and enhancing competitiveness.   The first of these objectives depends on an
enterprise satisfying the condition for access to one of the three regimes providing benefits (priority
regime, officially approved enterprise regime a nd decentralized enterprise regime), namely that
foreign currency earnings per unit of production must be equivalent to at least 25 per cent of the c.i.f.
unit value of imported like products.  The second objective relates to the criterion (of qualification for
benefits) under which the cost price of the finished product must, in the medium term10, be
comparable to the c.i.f. price of imported like pr oducts;  in other words, the product of local origin
must be competitive with the imported product.  In both cases, the commission's determination is
based on the forward operating account, covering a ten-year period, and the project feasibility study.
                                                     
10 The Code does not explicitly define what is meant by "medium term".Burundi WT/TPR/S/113
Page 45
91. The other tax benefits granted under the Investment Code are:  automatic (five-year)
exemption of craft enterprises from the profits tax and the land tax (SMEs are given a period of two
years);  for priority enterprises, exemption from the transaction tax on capital goods for production
and total or partial exemption (for a period of up to eight years) from the land tax and the profits tax;
for officially approved enterprises, a stabilized ta x regime for a period not exceeding ten years;  and
for decentralized enterprises, an extension for up to ten years of the period of exemption from thetransaction tax on capital goods granted to priority enterprises, and a reduction of the profits tax rate
from 40 to 30 per cent after the period of exemption.
92. Under the Investment Code, in addition to fiscal and customs benefits, "decentralized"
enterprises also qualify for:  defrayal by the State,  for a period not exceeding five years, of any energy
and water costs in excess of the rate applied to firms established within the Bujumbura metropolitanarea;  the allocation of free land;  and subsidized interest rates for long- and medium-term loans.
93. State enterprises active in the coffee, tea and cotton subsectors subsidize the inputs they make
available to planters, particularly seeds, fertilizers and pesticides.  Planters receive the inputs at the
beginning of the growing season, and their cost is partially deducted from the income from sales of
their crops to the State enterprises.  Coffee processing activities are supported through a reducedrefinancing rate accorded by the BRB to commercial  banks involved in the financing of washing and
hulling firms.  The BRB requires the spread on the refinancing rate applied by commercial banks not
to exceed a prescribed maximum.  When the coffee market is weak, the treasury bonds issued by the
State should serve as guarantees for the bank loans to the industry (Chapter IV(ii)(a)).
94. The Government also plans to introduce "appropriate instruments" to encourage savings and
loan cooperatives and to direct their activities towards micro-enterprises.
11  It is also planned to amend
the Investment Code so as to provide support for start-ups, particularly in the agricultural sector.
95. The main research activities are those conducted by the Burundi Institute of Agronomic
Sciences (ISABU), the Institute of Agronomic and Zootechnic Research (IRAZ) and, to a lesser
extent, the National Food Technology Centre (CNTA) and the Faculties of Agricultural Science and
Economic and Administrative Sciences of the University of Burundi.  Financial support for these
institutions has crumbled over the years since the beginning of the crisis, and their activities seem tohave come to a standstill according to the authorities.
(ii) State enterprises and privatization
96. The State is extensively involved in economic activity.  Forty-eight companies have been
identified as " sociétés à participation publique " (SPP), i.e. companies in which the State has shares,
covering ten areas of activity, including agribusiness;  energy;  telecommunications;  mines andquarries;  construction;  road and air transport;  the hotel trade;  finance and insurance;  and social
services (Table III.3).  This group includes 18 State-owned companies, 15 semi-public companies in
which the State is the majority shareholder, and 17 semi-public companies in which the State holds
less than 50 per cent of the registered capital.   In addition to these companies, there are
32 autonomous State-run departments and 14 public administrative bodies which may be considered
as extensions of the central government.
                                                     
11 Government of Burundi (2001).WT/TPR/S/113 Trade Policy Review
Page 46
Table III.3
List of companies by legal category
Short name Name of company Supervisory Ministry
State-owned companies
AIR BURUNDI Air Burundi Transport
BCC Burundi Coffee Company Trade
COGERCO Cotton Management Company Agriculture
COTEBU Bujumbura Textile Complex Industry
ECOSAT Control of Subsidized Housing Construction and Land
DevelopmentInfrastructure
FOSIP Private Investment Support Fund Development planning
FDC Municipal Development Fund Municipal development
INABU Burundi National Printing Works Communication
ONAPHA National Pharmaceutical Office Industry
ONATEL National Telecommunications Office Telecommunications
ONATOUR National Peat Office Energy
OPHAVET Veterinary Pharmaceutical Office Livestock
OTB Burundi Tea Board Agriculture
OTRACO Public Transport Office Transport
REGIDESO Water and Electricity Authority Energy
SIP Public Real Estate Company Infrastructure
SOFIDHAR Rural Housing Finance and Development Company Public works and infrastructure
SRDR Rumonge Regional Development Company Agriculture and livestock
Semi-public companies
APEE Foreign Trade Promotion Agency Trade
BANCOBU Commercial Bank of Burundi Finance
BCB Credit Bank of Bujumbura Finance
BNDE National Economic Development Bank Finance
BRARUDI Burundi Breweries and Soft Drink Manufacturers Industry
BUMINCO Burundi Mining Company Mines
BBCI Burundian Trade and Investment Bank Finance
BPB People's Bank of Burundi Finance
EPB Bujumbura Port Authority Transport
FNG National Guarantee Fund Development planning
FPHU Urban Housing Promotion Fund Public works and infrastructure
HOTEL NOVOTEL Hotel Novotel Tourism
HOTEL SOURCE DU NIL Hotel Source du Nil Tourism
HPB Burundi Palm Oil Production Plant Agriculture
OCIBU Burundi Cash Crops Board Agriculture
SBF Burundi Finance Company Finance
SER Randa Farm Operating Company Livestock
SOBUGEA Burundi Airport Management Company Transport
SOCABU Burundi Insurance Company Finance
SODECO Hulling and Marketing Company Agriculture
SOGEMAC Bujumbura Central Market Management Committee Interior (Bujumbura local
administration)
SOGESTAL KIRUNDO Kirundo Washing Stations Management Company Agriculture
SOGESTAL KIRIMIRO Kirimiro Washing Stations Management Company Agriculture
SOGESTAL KAYANZA Kayanza Washing Stations Management Company Agriculture
SOGESTAL MUMIRWA Mumirwa Washing Stations Management Company Agriculture
SOGESTAL NGOZI Ngozi Washing Stations Management Company Agriculture
SOKINABU Cinchona Production Company of Burundi Agriculture
SOSUMO Mosso Sugar Company Industry
TELECEL-BURUNDI Burundi Cellular Telephony Telecommunications
UCAR Commercial Insurance and Reinsurance Union of Burundi Finance
Source: Government of Burundi (1999), Politique et Plan d'actions du gouverneme nt pour le redressement du secteur
parapublic, période:  1999-2001 (Government policy and action plan for the recovery of the parastatal sector,1999-2001) .
97. State-owned and semi-public enterprises constitute a heavy burden on the national economy
and a drain on Treasury resources.  Most of them are incapable of generating the revenue they need toBurundi WT/TPR/S/113
Page 47
finance their day-to-day operations.  The sector's aggregate debt exceeds FBu 90 billion12 largely
because of management shortcomings and unprofitable or barely profitable investments.
98. The inefficient allocation of financial resources produced by State enterprise operations is an
impediment to economic growth and development.  Fi rst of all, the deficit run by these enterprises
drains the national budget and prevents the Government from allocating more substantial economic
and financial resources to priority development programmes.  This disrupts Government fiscalplanning, given the unforeseeable nature of certain forms of subsidy, particularly Government loans
on which repayment is repeatedly deferred or which may be transformed into transfers.  Secondly, the
level of demand for credit and financing by these enterprises means that the private sector,
particularly small- and medium-sized enterprises, may be deprived of sources of financing.  Thirdly,
the fact that some of these non-performing enterprises are supposed to offer essential basic orinfrastructure services pushes up production costs and acts as a restraint on commercial activities.
99. Reorganization of the public sector has been a recognized priority for some years, and forms
part of the transitional government's programme for 2002-2004.  The reforms are placed under the
responsibility of the Ministry for good governance.  The proposed strategy provides for full or partial
privatization;  improved management of firms kept under State supervision, including privatized
management;  and the winding up of firms lacking potential.  The adoption of a privatization law in
1991 marked the launch of the Government's privatization programme.  This led to the privatization,
between 1992 and 1996, of 10 companies (table III.4) and of the management of companies active in
the coffee subsector (two hulling stations), the po rt of Bujumbura, Bujumbura market, and the Gitega
oil production facility.  The sale of 0.5 per cent of Government assets was possible during this initial
stage.
Table III.4
Privatization programme, 2002-05
Enterprise Activity Objective Proposed timetable
BCB (Credit Bank of
Bujumbura)Banking and
financial servicesSale of the State's existing share Preparation of strategy note – February
2004Issue of invitation to tender – July 2004
Share transfer – November 2004
BRARUDI (Burundibreweries and soft
drink manufacturers)Alcoholic and non-
alcoholic beveragesReduction of the State's equity stake Preparation of strategy note –
December 2003
Issue of invitation to tender – August2004
Share transfer – December 2004
COTEBU (Bujumbura
Textile Complex)Textiles and
clothingEither establishment of a joint venture
between the State of Burundi and the
Chinese firm CTEXIC;  or privatization
through an increase in private capitalAugust 2003 for scenario 1
Scenario 2:  Issue of invitation to tender
- December 2003;  Distribution of
shares – June 2004.
EPB (Bujumbura Port
Authority)Management of the
port of BujumburaSale of the State's existing share Preparation of strategy note –
March 2004
Issue of invitation to tender –August 2004
Share transfer – December 2004
INABU
(Burundi National
Printing Works)Printing Full privatization Issue of invitation to tender – March
2003
Award of contract – April 2003
HPB
(Burundi Palm Oil
Production Plant)Palm oil production Reduction of the State's equity share Not yet established
Table III.4 (cont'd)
                                                     
12 Government of Burundi (1999), Government policy and action plan for the recovery of the parastatal
sector, 1999-2001, Service responsible for public enterprises, Government of Burundi.WT/TPR/S/113 Trade Policy Review
Page 48
Enterprise Activity Objective Proposed timetable
OCIBU (Burundi Cash
Crops Board)Marketing of coffee Redirection of OCIBU towards control
and regulatory activitiesAdoption of strategy note,
February 2003.
No date scheduled for application of the
strategy
OPHAVET
(Veterinary
Pharmaceutical
Office)Veterinary
pharmaceuticalsFull privatization To be determined – the expected buyer
withdrew
ONAPHA (National
Pharmaceutical
Office)Marketing of
pharmaceuticalsPartial privatization – the State will
continue to be the majority shareholderIssue of invitation to tender – December
2002
Transfer of shares to new shareholders –
April 2003
ONATEL
(National
Telecommunications
Office)Telecommunications Partial privatization – the State wishes to
keep 35 per cent of the shares, selling 51
per cent to a strategic partner and 14 per
cent to other investors.Issue of preselection tender
specifications – December 2002
Issue of invitation to tender forpreselected candidates – March 2003
Selection of partner – August 2003
OTB(Burundi Tea Board)Marketing of tea Privatization of tea estates and redirection
of the OTB towards control and regulatory
activitiesMay 2003 – reorganization of OTB;
Privatization of tea estates;
Issue of invitation to tender – August
2004
Share transfer – December 2004
REGIDESO Electricity, water Privatization of management Preparation of implementing regulations
under the law to liberalize and organizethe drinking water and electrical power
sector  – January 2003
Preparation of tender specifications –March 2003
Transfer of management – January 2004
Public Real EstateCompanyConstruction, sale
and rental of
buildings.Sale of the State's existing share Preparation of strategy note – May 2004
Issue of invitation to tender –
September 2004Share transfer – December 2004
SOCABU(Burundi InsuranceCompany)Insurance Sale of the State's existing share (25%) Preparation of strategy note –
April 2004
Issue of invitation to tender – October2004
Share transfer – January 2005
SODECO (Hulling
and Marketing
Company)Hulling of washed
coffeeFull privatization To be determined
Sogestal Mumirwa Washing of coffee
berriesReduction of the State's equity stake No date scheduled – implementation of
a privatization strategy based on studies
in February 2003.
SOSUMO (Mososugar company)Sugar production Full privatization Issue of invitation to tender – October
2002
Distribution of shares – October 2003
UCAR (Commercial
Insurance and
Reinsurance Union ofBurundi)Insurance Sale of the State's existing stake (12%) Strategy note – April 2004
Issue of invitation to tender – July 2004
Share transfer – October 2004
Source: Information supplied by the Burundian authorities.
100. The privatization process was interrupted by internal difficulties beginning in 1993, although
the adoption of a revised law in 1996 demonstrated the Government's determination to move forward.
A further revision of the law in September 2002 established the current legal framework of the
privatization programme.  The new law states that the full disposal of strategic enterprises can only beBurundi WT/TPR/S/113
Page 49
undertaken if other options such as licensing and management privatization are inapplicable.13
Decisions regarding the full or partial privatization of any company are issued by decree, on the joint
proposal of the Minister responsible for privatizati on, the Minister with supervisory authority over the
company to be privatized, and the Minister for Finance, whereas under the earlier law, the decree was
adopted on the proposal of the Prime Minister.  The new law specifies that the State Enterprises
Service (SCEP) shall discharge the technical functions of an Interministerial PrivatizationCommission (CIP) presided over by the Ministry for good governance.  The new law prohibits any
manager of a State enterprise convicted of fraudulent management in criminal proceedings from
purchasing shares in a company slated for privatization.  This prohibition is valid for five years from
the date of the conviction.  The law lays down the number and the maximum percentage of shares to
be sold to the general public so as to ensure that there are as many buyers as possible.  It provides forfinancing the privatization programme and related schemes by means of a special fund maintained by
5 per cent of State dividends from the SPPs and the proceeds of liquidations and privatizations.
101. The privatization of nineteen enterprises is under way in a process which, for virtually all of
them, had been initiated before 1995.  Most of them belong to sectors which could play a key role in
reviving the Burundian economy.  They include the Cotton Management Company (COGERCO);  theBujumbura Textile Complex (COTEBU);  the Hulling and Marketing Company (SODECO);  the
Credit Bank of Bujumbura (BCB);  the Water a nd Electricity Distribution Authority (REGIDESO);
Burundi Breweries and Soft Drink Manufacturers (BRARUDI);  the National Telecommunications
Office (ONATEL);  and the Mumirwa Washing Stations Management Company (SOGESTAL)
(washing of coffee berries).  Reforms are also planned for the Burundi Cash Crops Board (OCIBU)
and the Tea Board, in order to redirect their activities towards the regulation and control of operations
in the coffee and tea subsectors, respectively.  For the 19 enterprises, the Government has establisheda timetable for full or partial privatization, or full-scale restructuring of their operations and
management, between late 2002 and early 2005.  Table III.5 summarizes the situation with regard to
the privatization process and the actions planned.
Table III.5
Privatized Companies
Company Sector Year of SaleSale price (millions
of FBu)Privatization Method
AMSAR Italian road building company
active in Burundi1992 66 Public sale of shares
ARNOLAC Lake transport 1992 36.1 Public sale of shares
CNI Computerized communications 1993 233.5 Public sale of shares in batches
CPI Design office for small industrial
projects1992 10.8 Staff buy-out, payment over
four years
ECODI Trade 1993 392.5 Public sale of shares
FADI Manufacture and distribution of
insecticides1996 30.002 Public sale of shares
Bujumbura
Central Dairy (a)Dairy production 1992 128.4 Sale of shares in a single batch
following an invitation to
tender
Ruzizi Robusta coffee production
company1996 9.7 Direct agreement
SICOPP Import and marketing of
petroleum products1992 82.9 Public sale of shares
SIRUCO Ready-made clothing, import of
various consumer products1993 81.9 Transfer of shares to other
companies
a Company that has ceased operating.
Source : Information supplied by the Burundian authorities.
                                                     
13 No official definition exists of what is meant by a strategic enterprise.  The companies frequently
referred to as strategic include REGIDESO (water and electricity), ONATEL (fixed telephony), OCIBU (coffee)and OTB (tea).WT/TPR/S/113 Trade Policy Review
Page 50
102. The priority targets of Government strategy are loss-making companies which could
nevertheless respond to market opportunities, and companies in a monopoly position.  According tocircumstances, the Government envisages the following strategies and techniques:  transfer of assets
through a call for competitive bids for the invest ments concerned, followed by the involvement of
other savers through an open tendering procedure for the sale of an increased number of shares;
disposal of State-owned shares with retention of a go lden share;  transfer of assets in a single batch
with an obligation to overhaul the means of production and boost activity;  transfer of managementunder leasing, licensing or concessionary arrangements.  In practice, the Government seems inclined
to favour the first two strategies, i.e. issuing inv itations to tender in order to identify a strategic
partner, while keeping a percentage of the share capital under its control.  In the case of certain semi-
public companies, the government envisages gr adually reducing its equity participation and
fragmenting the shares, a strategy which is giving rise to some reservations on the part of strategic
partners which seem to prefer a more concentrated structure.  Side by side with the privatization
programme, the Government plans to restructure an d revive some State enterprises, while keeping
them under its supervision.  The enterprises concerned are those which, according to the authorities,
are capable of generating resources for the State.  The Government uses no formal criteria for
determining the State enterprises concerned.
103. Revenue from the liquidation or privatization of State enterprises is entered in the ordinary
budget as "non-fiscal" revenue.
14  It is not earmarked for any specific purpose.  Total income from
privatizations amounted to FBu 1.1 billion at the end of 2002.
104. The corporate reorganization and restructuring drive focuses on improved management.  A
law on the code for private and public companies was adopted in 1996.  The law calls for annual
inspection of the accounts and the management report by commissioners appointed by the annual
general meeting of the company or by its board of directors.  The auditing and certification of theaccounts are carried out by an independent auditor appointed by the annual general meeting or the
board of directors through a public invitation for applications.  A decree on rules governing the
management, monitoring and assessment of SPPs (companies in which the State owns a share) was
also adopted in September 1998.  Performance contracts have been signed with six companies, three
of which are undergoing privatization.  The Government has introduced a policy of recovery andcontrol of debt and of financial flows between the Treasury and the companies concerned, in order to
oblige State enterprises to conform to strict budgetary constraints.
105. More than 20 of the companies facing de facto bankruptcy have been wound up (table III.6).
Although most of them were declared bankrupt in the early stages of economic reform in 1991-1992,
some liquidation proceedings have not yet been completed.  The law on the code for private andpublic companies specifies that dissolution shall take place on the proposal of the supervisory
authority, after consulting the organs of the company.  It is planned to take action to update the
regulations concerning recovery, bankruptcy, dissolution and liquidation, and to prevent the selective
and sporadic processing of rescue packages and delays in decision-making with regard to dissolution
and liquidation.
                                                     
14 Government of Burundi (2001c).Burundi WT/TPR/S/113
Page 51
Table III.6
Liquidations, 1985-2002
Enterprise/ActivitiesLiquidation order or annual general
meeting decisionState of progress
AGRIBAL – Agriculture (Burundi – Libyan Arab Jamahiriya) 11 December 1988 Closed
ENACCI – National limestone and cement company 26 may 1987 and 13 December 1988 Closed
EPIMABU-ONC-ONIMAC – Public institution for the import of office
equipment30 June 1989 (decree merging these
institutions and establishing ECODI)Closed
RURAL HOUSING FUND 20 November 1989 Closed
MURAMVYA FLOUR MILL 12 February 1990 Closed
SOMEBU – Semi-public company of Burundi (Design office) 16 October 1985 Closed
SOGESA – Warehouse and agricultural silo management company 13 August 1988 Closed
SOCEGI – Gifurwe Stock breeding Company 3 May 1990 Closed
ONL – National Housing Office 6 June 1989 Closed
OTRABU – Transport Board of Burundi (goods transport) 2 September 1991 Closed
HALB – Libyan Arab Jamahiriyal/Burundian Holding Company 21 August 1991 Closed
KIRYAMA FARM 21 May 1992 Closed
HOLIDAY CLUB (Tourist operator) 17 September 1991 Closed
KARUZI FARM 21 May 1992 Closed
ONAMA – National Farm Mechanization Board 21 May 1992 Closed
OMC – Military Construction Board 30 August 1993 Closed
CADEBU –Burundi Savings Bank 1 April 1994 Underway
CAMOFI – Mobilization and Financing Fund 1998 Underway
SRD – Regional Development Company 1994 Underway
SOFIDHAR – Rural Housing Development Financing Company 1996 Underway
VERRUNDI – Burundi Glassworks 2000 Underway
Source:  Information supplied by the Burundian authorities.
106. The Government is aware that the success of the State enterprise reform programme may
contribute to improving the macroeconomic situation in the country, while at the same time being
conditional on that situation.  It is also aware that the benefits of privatization, particularly with regard
to the allocation of resources and social well-being, call for the establishment of a suitable regulatoryframework.  A law on competition is in preparation, and it will also be necessary to build the
capacities of the sectoral supervisory agencies, particularly the supervisory function of the Bank of
Burundi (BRB) and of the telecommunications regulatory body.  Bodies will also have to be
established where none exist, particularly in sectors such as electricity, water and insurance.
(iii) Competition and price control policy
107. Competition regulations are contained in the Commercial Code.  There is a ban on concerted
action, agreements, and explicit or implicit understandings designed inter alia  to limit market access
or freedom of competition;  to impede the determination of prices through the free operation of
market forces;  to limit or control production, outlets and investments or technical progress;  and to
divide up markets or sources of supply.  The Code also prohibits abuse of a dominant position.
108. At the request of any interested party, the Commercial Court may order the cessation of acts
contrary to honest commercial practices.  The Code also provides for fines and prison sentences foranyone who:  (i) brings about or maintains, by means of threats, violence, flagrantly illegal acts or
fraudulent practices, a concerted work stoppage with the aim of forcing wages to rise or fall, or of
undermining the free exercise of industry or labour;  (ii) infringes manufacturing secrets;  (iii) uses
unlawful means to interfere with freedom of competition;  (iv) interferes with the free conduct of
public auctions or awards of government procurement contracts;  (v) enters into a contract with theWT/TPR/S/113 Trade Policy Review
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State by taking advantage of the authority or influence of persons acting on behalf of the State;  and
(vi) contributes to artificial price increases, alters the status of data for personal advantage or
interferes with delivery deadlines.
109. The Ministry of Trade and Industry is the authority responsible for competition issues.  The
number of complaints recorded is limited.  One concerns the practice of rebates or discounts used by
certain sellers of petroleum products.  A solution involving adjustment of import prices has served toreduce the scale of this practice.  Another complaint has been made by companies with exclusive
dealerships for certain types of car, against other vendors that did not have exclusive dealer status but
competed with them for government procurement contr acts.  This matter had not been resolved at the
end of 2002.
110. According to the authorities, the introduction of the privatization and liberalization policy
described above calls for the enactment of new competition legislation, which is being prepared.
111. The State sets or administers prices for a number of products (Chapter IV).  Producer prices
are set for coffee, tea, cotton and sugar growers;  the same applies to prices of stockbreeding products.
Selling prices are fixed inter alia  for petroleum products, non-alcoholic carbonated beverages, beer,
sugar and tobacco.  The State also sets the prices of certain services, including electricity, water, roadpassenger transport, fixed telephony and insurance premiums.  In the case of selling prices, the
relevant decisions are communicated through legislative decrees.  In recent years, such decisions have
in most cases been motivated by public revenue concerns, since price increases enable the
Government – all other things being equal – to in crease its income through taxation (particularly
excise duties) and through the increase in the revenue of parastatal companies.
(iv) Intellectual property
112. Burundi has been a member of the World Inte llectual Property Organization (WIPO) since
1977.  It has acceded to the Paris Convention, and a 1977 Government Decree stipulates that Burundi
is a party to that Convention in respect of any su bject-matter relating to patents, trademarks and
industrial designs.
113. Intellectual property regulations are not well developed in Burundi.  They consist mainly of a
1964 law on industrial property, a 1977 decree-law which specifies that the provisions of the ParisConvention apply to the protection of industrial designs, and a 1978 law on copyright.  Both the
copyright law and the industrial property law are being revised.  The ministries responsible for
intellectual property matters are those of culture, youth and sports (copyright) and of trade and
industry (industrial property).  In the past, the Industrial Property Service of the latter ministry
concerned itself solely with the registration of patents and marks.  In January 2002, an IndustrialProperty and Documentation Directorate was set up to deal with all matters relating to industrial
property, reflecting the Government's desire to  improve the legal and institutional framework of
intellectual property protection.
114. The revision of the Copyright Law is supported by associations of performers and composers,
as well as by music producers, who see in this law a means of stimulating Burundi's music sector.
Enactment of the new law is scheduled to go hand in hand with Burundi's accession to the Berne
Convention.
115. The draft law comprises two main parts, copyright and neighbouring rights, together with an
Annex on the regulation of translation and reproduction licences.  An illustrative list of protected
works covers all the main categories of works, in cluding works considered an expression of folklore.Burundi WT/TPR/S/113
Page 53
Both economic and moral rights are protected.  Compulsory licences may be granted for purposes of
translation and reproduction in Kirundi.
116. The term of protection provided for under the draft law comprises the entire lifetime of the
author and 70 years from the end of the year of his death.  In the case of works of joint authorship,
rights are protected during the lifetime of the last surviving author and for up to 50 years after his
death.  In the case of a work belonging to a legal person, the term of protection is 50 years from thedate on which the work was lawfully made accessible to the public.
117. The law of August 1964 on industrial property re gulates the protection of patents, trademarks
and industrial designs.  The implementing measures are contained in the Ministerial Orders of July
1965, the Ministerial Order of September 1964 and the Ministerial Order of June 1966, respectively.
The Law states that the term for patents for invention is 20 years, but provides no definition of what ismeant by "invention".  A trademark is considered to be constituted by any sign serving to distinguish
the goods of an industry or the articles of a business, as well as the names of a person and the
corporate name of a business or industry.  As far as industrial designs are concerned, the manufacturer
must specify, at the time of filing, whether he intends to reserve to himself an exclusive right of use
for one, three or five years, or in perpetuity.
118. The draft law amending the 1964 law deals with the protection of patents for invention,
industrial designs, marks (including collective marks), trade names, geographical indications and acts
of unfair competition.  Regarding patents, the draft law clearly defines what is meant by an invention
(following the definition contained in the Paris Conv ention), and provides for a term of protection of
20 years.  The draft law also contains provisions concerning working of the patent by the public
authority or an authorized third party, non-voluntary licences, and criminal proceedings and penalties.
Regarding industrial designs, the draft law defines inter alia  what subject-matter is eligible for
registration, and states that the term of protection is five years, renewable for two consecutive periods
of five years each.  The term of protection for a mark shall be ten years from the date of filing of the
registration and may be renewed for two consecutive periods of ten years each.  Trade names shall be
protected for a period of ten years, renewable indefinitely.  As regards geographical indications, the
draft law gives a definition and specifies the level of protection granted.  The draft provides that theIndustrial Property and Documentation Directorate shall keep separate registers for patents, industrial
designs and marks and that all publications required by law shall be effected by means of an official
journal.
119. The 1989 Decree-Law establishing a standardization and quality control system contains a
provision to protect certain aspects of business confidentiality.  Article 12 specifies that anyone whodiscloses secrets relating to the design, manufacture or processing of a product otherwise than in cases
covered by the Law or cases where they are called upon to testify in legal proceedings, shall be liable
to a term of imprisonment of six months and fine of FBu 2,000-10,000.  However, no implementing
regulations have ever been adopted for this law.