[Federal Register Volume 74, Number 202 (Wednesday, October 21, 2009)]
[Notices]
[Pages 54350-54375]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-23328]



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Part IV





Millennium Challenge Corporation





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Notice of Entering Into a Compact With the Republic of Senegal; Notice

Federal Register / Vol. 74, No. 202 / Wednesday, October 21, 2009 / 
Notices

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MILLENNIUM CHALLENGE CORPORATION

[MCC FR 09-18]


Notice of Entering Into a Compact With the Republic of Senegal

AGENCY: Millennium Challenge Corporation.

ACTION: Notice.

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SUMMARY: In accordance with Section 610(b)(2) of the Millennium 
Challenge Act of 2003 (Pub. L. 108-199, Division D), the Millennium 
Challenge Corporation (MCC) is publishing a summary and the complete 
text of the Millennium Challenge Compact between the United States of 
America, acting through the Millennium Challenge Corporation, and the 
Republic of Senegal. Representatives of the United States Government 
and the Republic of Senegal executed the Compact documents on September 
16, 2009.

    Dated: September 23, 2009.
Henry Pitney,
Acting General Counsel, Millennium Challenge Corporation.

Summary of Millennium Challenge Compact With the Republic of Senegal

    The five-year Millennium Challenge Compact with the Republic of 
Senegal (``Compact'') will provide up to $540 million to reduce poverty 
and accelerate economic growth. The Compact aims to enable improved 
agricultural productivity and to expand access to markets and services 
through critical infrastructure investments in roads and irrigation 
sectors (``Program'').

1. Roads Rehabilitation Project ($324 million)

    The Roads Rehabilitation Project seeks to expand access to markets 
and services and reduce transportation time and costs by improving the 
condition of certain strategic roads. Specifically, the project will 
support the rehabilitation and upgrading of portions of National Road 
No. 2 (RN2), the northernmost road in Senegal, which borders the 
Senegal River, and National Road No. 6 (RN6), located in Casamance, the 
poorest region of Senegal, in the south. The government of Senegal has 
prioritized both roads in its Road Sector Master Plan, and their 
rehabilitation is in line with the national policy of increasing growth 
through road creation, renovation, and maintenance. The RN2 serves as 
the primary road to transport and export products from irrigation areas 
along the Senegal River, thereby complementing the Compact's Irrigation 
and Water Resources Management Project (described below). The RN2 is 
also a strategic road, connecting Dakar harbor to Mauritania and Mali, 
and to southern cities in Senegal. The RN6 is the only road available 
to transport local agricultural products from Casamance to the rest of 
Senegal. It is also a strategic road, connecting Senegal with Guinea 
Bissau, Guinea (Conakry), and Mali. The improvement of both roads is 
expected to stimulate domestic and trans-border traffic and commerce. 
The primary activities for the Roads Rehabilitation Project are as 
follows:
    <bullet> The RN2 activity will rehabilitate and upgrade 
approximately 120 kilometers of road, from Richard Toll to Ndioum (a 
primarily agricultural and agricultural processing area of Senegal), 
and replace or upgrade associated structures, such as bridges and 
culverts, to eliminate flooding, improve road safety, and provide 
reliable, year-round access to markets, schools, and hospitals, 
including during the rainy seasons.
    <bullet> The RN6 activity will rehabilitate and upgrade 
approximately 256 kilometers of road, from Ziguinchor to the crossroads 
at the town of Kounkane, and will replace or upgrade associated 
structures, resulting in reduced transport costs and time and improved 
access to markets and social services.

2. Irrigation and Water Resources Management Project ($170 million)

    The Irrigation and Water Resources Management Project--comprising 
infrastructure investments in the Senegal River Delta and Department of 
Podor areas--seeks to improve the productivity of the agricultural 
sector by extending and improving the quality of the irrigation system 
in certain agriculture-dependent areas of northern Senegal. The Project 
conforms to Senegal's 1998 Master Plan for poverty reduction and 
agricultural development in the Senegal River Valley and is designed to 
address the following three factors contributing to low agricultural 
yields: (i) Poor quality of the existing irrigation and drainage 
infrastructure; (ii) insufficient delivery of available water to 
agricultural areas; and (iii) lack of an appropriate drainage system, 
which leads to soil salinity. Specifically, the project will support 
investments in the Senegal River Valley intended to: (i) Increase the 
volume of irrigation water in the Senegal River Valley to develop 
approximately 8,500-10,500 hectares of additional irrigated land; (ii) 
eliminate the risk of abandonment of approximately 26,000 hectares of 
existing irrigable land; and (iii) provide additional supply of water 
for human and animal use in the project areas. The project will also 
support a land tenure security activity, to provide for, or maintain, a 
secure land tenure environment for all of the inhabitants of the region 
directly affected by the project. The project may also invest in 
complementary social safeguard measures, such as day care centers and 
multi-purpose livestock centers.

3. Administration

    The Compact also includes program management and oversight costs 
estimated at $42 million over a five-year timeframe, including the 
costs of administration, management, auditing, fiscal and procurement 
agent services, environmental and social oversight, and funding to 
facilitate Compact implementation. In addition, the cost of monitoring 
and evaluation of the Compact is budgeted at approximately $4 million.

4. Intended Beneficiaries and Expected Results

    Compact Program:
    <bullet> Approximately 138,600 households, or approximately 1.66 
million individuals within those households, are estimated to benefit 
from the Compact Program within twenty years. These estimates assume 
some overlap among beneficiaries in the Senegal River Valley.
    <bullet> The largest number of beneficiaries--approximately 1.1 
million--would be located in the Casamance. About 75% of the Program 
beneficiaries in the Casamance are expected to come from households 
living on less than 2 dollars per person per day. An estimated 42% of 
total Program beneficiaries in the Casamance live on $1.25 per person 
per day, or less. Although Program activities in the Casamance are 
expected to cast a wider net over beneficiaries, about 38% of total 
benefits generated by the Program would accrue to beneficiaries in that 
region. The Program would be an important preliminary contribution to 
the development of the Casamance and greatly facilitate other future 
investment there.
    <bullet> Approximately 62% of Program benefits would accrue to 
beneficiaries in the Senegal River Valley. Here, approximately 45% of 
total beneficiaries are expected to be from households subsisting on 
less than $2 per person per day and 25% from households living on 
$1.25, or less. Whereas Program investments in the Senegal River Valley 
will affect the welfare of a smaller number of people than in the 
south, the investments are expected to

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extend significantly and solidify gains in the reduction of poverty in 
the north.
    Roads Rehabilitation Project:
    <bullet> The RN2 Road Activity is expected to benefit approximately 
21,000 households or 250,000 individuals over the next 20 years. Over 
the life of the investment, total average benefits per beneficiary for 
the RN2 are approximately $870.
    <bullet> The RN6 Road Activity would benefit some 102,000 
households or approximately 1.1 million people over the next 20 years. 
Over the life of the investment, total average benefits per beneficiary 
for the RN6 are approximately $530.
    Irrigation and Water Resources Management Project:
    <bullet> Beneficiaries of the Irrigation and Water Resources 
Management Project include households, owners or shareholders of 
farming enterprises, and households that have individuals employed in 
the operation of enterprise farms.
    <bullet> Over the course of the investment, the Project would 
benefit approximately 22,390 households, or 268,700 individuals, 
through participation in own agricultural production or employment in 
agriculture.
    <bullet> Assuming that households, on average, are comprised of 
twelve persons cultivating two hectares of irrigated land, the scale of 
net revenue from a holding would have a substantial impact on the 
welfare of poor households. Average future revenues of about purchasing 
power parity (``PPP'') $4,470 per two-hectare farm would increase 
household incomes by more than PPP $1 per person per day. For 
households subsisting with incomes of PPP $1.25 or less per person per 
day, this increment would move households from being extremely poor to 
being near poor (not far below or above PPP $2 per person per day).

Millennium Challenge Compact Between The United States of America 
Acting Through the Millennium Challenge Corporation and the Republic of 
Senegal

Table of Contents

Article 1. Goal and Objectives
    Section 1.1 Compact Goal
    Section 1.2 Program Objective
    Section 1.3 Project Objectives
Article 2. Funding and Resources
    Section 2.1 Program Funding
    Section 2.2 Compact Implementation Funding
    Section 2.3 MCC Funding
    Section 2.4 Disbursement
    Section 2.5 Interest
    Section 2.6 Government Resources; Budget
    Section 2.7 Limitations of the Use of MCC Funding
    Section 2.8 Taxes
Article 3. Implementation
    Section 3.1 Program Implementation Agreement
    Section 3.2 Government Responsibilities
    Section 3.3 Policy Performance
    Section 3.4 Government Assurances
    Section 3.5 Implementation Letters
    Section 3.6 Procurement
    Section 3.7 Records; Accounting; Covered Providers; Access
    Section 3.8 Audits; Reviews
Article 4. Communications
    Section 4.1 Communications
    Section 4.2 Representatives
    Section 4.3 Signatures
Article 5. Termination; Suspension; Refunds
    Section 5.1 Termination; Suspension
    Section 5.2 Refunds; Violation
    Section 5.3 Survival
Article 6. Compact Annexes; Amendments; Governing Law
    Section 6.1 Annexes
    Section 6.2 Amendments
    Section 6.3 Inconsistencies
    Section 6.4 Governing Law
    Section 6.5 Additional Instruments
    Section 6.6 References to MCC Web site
    Section 6.7 References to Laws, Regulations, Policies and 
Guidelines
    Section 6.8 MCC Status
    Section 6.9 English Language
    Section 6.10 Counterparts; Electronic Delivery
Article 7. Entry Into Force
    Section 7.1 Domestic Requirements
    Section 7.2 Conditions Precedent to Entry Into Force
    Section 7.3 Date of Entry Into Force
    Section 7.4 Compact Term
    Section 7.5 Provisional Application
Article 8. Additional Government Covenants
    Section 8.1 Additional Government Resources
    Section 8.2 Procurement
Annex I: Program Description
    Schedule 1--Delta Activity Construction Activities
    Schedule 2--Form of MCA-Senegal Decree
Annex II: Multi-Year Financial Plan Summary
Annex III: Description of the Monitoring and Evaluation Plan
Annex IV: Conditions to Disbursement of Compact Implementation 
Funding
Annex V: Definitions
Annex VI: Specific Tax Exemption Mechanisms
    Schedule A--Value Added Tax (VAT)
    Schedule B--Customs Duties
    Schedule C--Corporate Income Tax
    Schedule D--Individual Income Tax
    Schedule E--Fuel Tax
    Schedule F--Registration Tax, Registration Fees and Stamp Duty

Millennium Challenge Compact

Preamble

    This Millennium Challenge Compact (this ``Compact'') is between the 
United States of America, acting through the Millennium Challenge 
Corporation, a United States government corporation (``MCC''), and the 
Republic of Senegal (``Senegal''), acting through its Government (the 
``Government'') (individually a ``Party'' and collectively, the 
``Parties'').
    Recalling that the Government consulted with the private sector and 
civil society of Senegal to determine the priorities for the use of 
Millennium Challenge Account assistance and developed and submitted to 
MCC a proposal for such assistance focused on poverty reduction; and
    Recognizing that MCC wishes to help Senegal implement a program to 
achieve the goal and objectives described herein (the ``Program'');
    Capitalized terms used herein shall have the meanings specified in 
Annex V hereto.
    The Parties hereby agree as follows:

Article 1. Goal and Objectives

Section 1.1 Compact Goal

    The goal of this Compact is to reduce poverty in Senegal through 
economic growth (the ``Compact Goal'').

Section 1.2 Program Objective

    The objective of the Program (as further described in Annex I) (the 
``Program Objective'') is to enable improved agricultural productivity 
and to expand access to markets and services through critical 
infrastructure investments in roads and irrigation sectors.

Section 1.3 Project Objectives

    The objectives of the Projects (as further described in Annex I) 
(each a ``Project Objective'' and collectively, the ``Project 
Objectives'') are as follows:
    (a) The objective of the Roads Rehabilitation Project is to expand 
access to markets and services by improving the condition of certain 
strategic roads and reducing transportation time and costs.
    (b) The objective of the Irrigation and Water Resources Management 
Project is to improve the productivity of the agricultural sector by 
extending and improving the quality of the irrigation system in certain 
agriculture-dependent areas of northern Senegal.

Article 2. Funding and Resources

Section 2.1 Program Funding

    MCC hereby grants to the Government, under the terms of this 
Compact, an amount not to exceed Five Hundred Thirty Five Million 
United States Dollars (US$535,000,000) (``Program Funding'') for use by 
the Government to implement the Program. The allocation of Program 
Funding uses is generally described in Annex II to this Compact.

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Section 2.2 Compact Implementation Funding

    (a) MCC hereby grants to the Government, under the terms of this 
Compact, in addition to the Program Funding described in Section 2.1, 
an amount not to exceed Five Million United States Dollars 
(US$5,000,000) (``Compact Implementation Funding'') under Section 
609(g) of the Millennium Challenge Act of 2003, as amended (the ``MCA 
Act''), for use by the Government as agreed by the Parties, which may 
include use for the following purposes:
    (i) financial management and procurement activities;
    (ii) administrative activities including start-up costs such as 
staff salaries and administrative support expenses such as office 
equipment, and computers and other information technology or capital 
equipment; and
    (iii) other Compact implementation activities approved by MCC.
    The allocation of Compact Implementation Funding among uses is 
generally described in Annex II to this Compact.
    (b) Notwithstanding Section 7.3 of this Compact, this Section 2.2 
and any other provisions of this Compact necessary to make use of 
Compact Implementation Funding for the purposes set forth herein, shall 
be effective, for purposes of Compact Implementation Funding only, as 
of the date this Compact is signed by MCC and the Government.
    (c) Each Disbursement of Compact Implementation Funding is subject 
to satisfaction of the conditions to such disbursement as set forth in 
Annex IV.
    (d) If, after the first anniversary of this Compact entering into 
force, MCC determines that the full amount of Compact Implementation 
Funding under Section 2.2(a) of this Compact exceeds the amount which 
reasonably can be utilized for the purposes and uses set forth in 
Section 2.2(a) of this Compact, MCC, by written notice to the 
Government, may withdraw the excess amount, thereby reducing the amount 
of the Compact Implementation Funding as set forth in Section 2.2(a) 
(such excess, the ``Excess CIF Amount''). In such event, the amount of 
Compact Implementation Funding granted to the Government under Section 
2.2(a) will be reduced by the Excess CIF Amount, and MCC will have no 
further obligations with respect to such Excess CIF Amount.
    (e) MCC, at its option by written notice to the Government, may 
elect to grant to the Government an amount equal to all or a portion of 
such Excess CIF Amount as an increase in the Program Funding, and such 
additional Program Funding will be subject to the terms and conditions 
of this Compact and any relevant supplemental agreement applicable to 
Program Funding.

Section 2.3 MCC Funding

    Program Funding and Compact Implementation Funding are collectively 
referred to in this Compact as ``MCC Funding.''

Section 2.4 Disbursement

    In accordance with this Compact and the Program Implementation 
Agreement, MCC will disburse MCC Funding for expenditures incurred in 
furtherance of the Program (each instance, a ``Disbursement''). Subject 
to the satisfaction of all applicable conditions, the proceeds of such 
Disbursements will be made available to the Government, at MCC's sole 
election, by (a) deposit to one or more bank accounts established by 
the Government and acceptable to MCC (each, a ``Permitted Account'') or 
(b) direct payment to the relevant provider of goods, works or services 
for the implementation of the Program. MCC Funding may be expended only 
to cover Program expenditures as provided in this Compact and the 
Program Implementation Agreement.

Section 2.5 Interest

    The Government will pay to MCC any interest or other earnings that 
accrue on MCC Funding (whether by directing such payments to a bank 
account outside Senegal that MCC may from time to time indicate or as 
otherwise directed by MCC).

Section 2.6 Government Resources; Budget

    (a) The Government will provide all funds and other resources, and 
will take all actions, that are necessary to carry out the Government's 
responsibilities and obligations under this Compact.
    (b) The Government will use its best efforts to ensure that all MCC 
Funding it receives or is projected to receive in each of its fiscal 
years is fully accounted for in its annual budget on a multi-year 
basis.
    (c) The Government will not reduce the normal and expected 
resources that it would otherwise receive or budget from sources other 
than MCC for the activities contemplated under this Compact and the 
Program.
    (d) Unless the Government discloses otherwise to MCC in writing, 
MCC Funding will be in addition to the resources that the Government 
would otherwise receive or budget for the activities contemplated under 
this Compact and the Program.

Section 2.7 Limitations on the Use of MCC Funding

    The Government will ensure that MCC Funding (or any refunds or 
reimbursements of MCC Funding paid by the Government in accordance with 
this Compact that MCC permits to be used in connection with the 
Program) will not be used for any purpose that would violate United 
States law or policy, as specified in this Compact or as further 
notified to the Government in writing or by posting from time to time 
on the MCC Web site at http://www.mcc.gov (the ``MCC Web site''), 
including but not limited to the following purposes:
    (a) for assistance to, or training of, the military, police, 
militia, national guard or other quasi-military organization or unit;
    (b) for any activity that is likely to cause a substantial loss of 
United States jobs or a substantial displacement of United States 
production;
    (c) to undertake, fund or otherwise support any activity that is 
likely to cause a significant environmental, health, or safety hazard, 
as further described in MCC's environmental and social guidelines 
posted from time to time on the MCC Web site or otherwise made 
available to the Government by MCC (the ``MCC Environmental 
Guidelines''); or
    (d) to pay for the performance of abortions as a method of family 
planning or to motivate or coerce any person to practice abortions, to 
pay for the performance of involuntary sterilizations as a method of 
family planning or to coerce or provide any financial incentive to any 
person to undergo sterilizations or to pay for any biomedical research 
which relates, in whole or in part, to methods of, or the performance 
of, abortions or involuntary sterilization as a means of family 
planning.

Section 2.8 Taxes

    (a) Unless the Parties otherwise specifically agree in writing, the 
Government will ensure that each of the following is free from the 
payment or imposition of any existing or future taxes, duties, levies, 
contributions, or other similar charges (``Taxes'') of or in Senegal 
(including any such Taxes imposed by a national, regional, local, or 
other governmental or taxing authority of or in Senegal) (i) the 
Program; (ii) MCC Funding; (iii) interest or earnings on MCC Funding; 
(iv) any Project or activity implemented under the Program; (v) MCA-
Senegal (or MFG-

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MCA prior to MCA-Senegal's establishment); (vi) goods, works, services, 
technology, and other assets and activities under the Program or any 
Project; (vii) persons and entities that provide such goods, works, 
services, technology, and assets, or perform such activities; and 
(viii) income, profits, and payments with respect thereto. The Parties 
acknowledge and agree that ``Taxes'' include, among other things, value 
added and other transfer taxes (including exemption therefrom with 
credit), profit and income taxes, property and ad valorem taxes, import 
and export duties and taxes (including for goods imported and re-
exported for personal use), withholding taxes, payroll taxes, social 
security and social insurance contributions.
    (b) Without limiting the generality of the definition of Taxes as 
set forth in Section 2.8(a), the Parties hereby agree that the 
following taxes, duties, fees, and similar charges are also 
specifically included in the definition of ``Taxes'' requiring 
exemptions in accordance with this Compact: (i) Customs duties and 
associated fees (including redevances statistiques (RS, currently 1%), 
droits de douanes (DD, currently 0-20%), TVA (VAT, currently 18%), les 
droits des chargeurs (COSEC, currently 0.20%), and les 
pr[eacute]l[egrave]vements communautaires de l'UEMOA ou de la CEDEAO 
(for example, PCS, currently, 1% and CEDEAO, currently 0.5%)); (ii) 
value added taxes (VAT); (iii) taxes on petroleum products, including 
but not limited to the tax speciale sur hydrocarbons; (iv) registration 
and stamp taxes; (v) taxes on the corporate income of professional, 
accounting or consulting firms (``benefices non commerciaux'') derived 
from Compact-related work; (vi) taxes on the corporate income of 
companies or other legal persons (``benefices industriels et 
commerciaux'') derived from Compact-related work; and (vii) taxes on 
the personal income of individuals working under the Compact.
    (c) Unless otherwise agreed by MCC in writing, set forth in Annex 
VI are procedures that the Government will implement to effectuate the 
exemption from Taxes required by Section 2.8(a) and Section 2.8(b) 
above with respect to each of the Taxes addressed therein. To the 
extent that there are Taxes not addressed in Annex VI, whether 
currently in force or established in the future, that MCC determines, 
in its sole discretion, are not being exempted by the Government in 
accordance with this Section 2.8, the Government hereby agrees that it 
will implement appropriate procedures (approved in writing by MCC) to 
ensure that such additional Taxes are exempted in accordance with this 
Section 2.8. For the avoidance of doubt, the identification (or lack of 
identification) of Taxes in Annex VI, or the description (or lack of 
description) of procedures to implement the required exemption from 
such Taxes in Annex VI, shall in no way limit the scope of the tax 
exemption required by this Section 2.8.
    (d) Unless otherwise agreed in writing by the Parties, the 
provisions of Section 2.8(a) and 2.8(b) shall not apply to income Taxes 
on, and contributions with respect to, individuals or legal persons who 
are nationals of Senegal, provided that such Taxes and contributions 
are not discriminatory and are generally applicable to all nationals in 
Senegal.
    (e) In complying with the tax exemption obligations set forth 
herein, the Government will exempt MFG-MCA, MCA-Senegal, the Fiscal 
Agent, the Procurement Agent, and/or any other provider of goods, 
services, or works in connection with the Program from any obligation 
imposed by the laws of Senegal to withhold any Taxes from any payments 
made to any natural persons or legal persons working under the Program 
to the extent that such natural persons or legal persons are not 
nationals of Senegal.
    (f) For the purposes of Section 2.8(d) and 2.8(e), the term 
``national'' means natural persons who are citizens or permanent 
residents of Senegal and legal persons who are formed under the laws of 
Senegal (excluding MCA-Senegal, MFG-MCA and any other entity formed for 
the purpose of implementing the Government's obligations hereunder); 
provided that in determining if a natural person is a permanent 
resident of Senegal or if a legal person has been formed under the laws 
of Senegal, the taxable status of such individual or legal person shall 
be based on its status at the time it is awarded or executes a Compact-
related agreement or contract, and such initial determination shall not 
change regardless of: (i) The type of agreement or contract used to 
employ or engage such individual, company, or other legal person, (ii) 
any laws of Senegal that purport to change such status based on period 
of contract performance or period of time residing and/or working in 
Senegal, and/or (iii) any requirement under the laws of Senegal that a 
company or other legal person must establish a branch office in 
Senegal, or otherwise register or organize itself under the laws of 
Senegal, in order to provide goods, services, or works in Senegal.
    (g) The Government will from time to time execute and deliver, or 
cause to be executed and delivered, such other instructions, 
instruments or documents, and to take or cause to be taken such other 
actions as may be necessary or appropriate in the determination of MCC 
in order to implement this Section 2.8 of the Compact. Such further 
assurances may include, without limitation, (i) passage of an 
``arret[eacute] d'application'' (or such similar document (or 
documents) having the same legal effect), in form and substance 
satisfactory to MCC to provide specific instructions to Government 
agents with respect to their role in the implementation of the 
exemption from Taxes required by this Compact; or (ii) provision of an 
attestation d'exoneration to appropriate beneficiaries of the tax 
exemption described in this Compact.
    (h) If a Tax has been levied and paid contrary to the requirements 
of this Section 2.8, or any agreement entered into pursuant to this 
Section 2.8, the Government will refund promptly to MCC (or to another 
party as designated by MCC) the amount of such Tax in United States 
Dollars or the currency of Senegal within thirty (30) days (or such 
other period as may be agreed in writing by the Parties) after the 
Government is notified in writing (whether by MCC, MFG-MCA, or MCA-
Senegal) that such Tax has been paid.
    (i) No MCC Funding, proceeds thereof, or Program assets may be 
applied by the Government in satisfaction of its obligations under this 
Section 2.8.

Article 3. Implementation

Section 3.1 Program Implementation Agreement

    Prior to entry into force, the Government and MCC will enter into 
an agreement relating to, among other matters, implementation 
arrangements, fiscal accountability and disbursement, and use of MCC 
Funding (the ``Program Implementation Agreement'' or ``PIA''). The 
Government will implement the Program in accordance with the Compact 
and the PIA.

Section 3.2 Government Responsibilities

    (a) The Government has principal responsibility for overseeing and 
managing the implementation of the Program.
    (b) The Government hereby designates MCA-Senegal, an entity to be 
established through passage of a decree substantially in the form and 
substantially on the terms of the form of decree set forth in Schedule 
2 to Annex

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I, as the accountable entity to implement the Program and to exercise 
and perform the Government's rights and responsibilities with respect 
to the oversight, management, and implementation of the Program, 
including, without limitation, managing the implementation of Projects 
and their Activities, allocating resources, and managing procurements. 
Such entity will be referred to herein as ``MCA-Senegal,'' and will 
have the authority to bind the Government with regard to all Program 
activities. Prior to MCA-Senegal's establishment, the Government hereby 
designates the Mission de Formulation et du Gestion du MCA Senegal 
(``MFG-MCA''), established by Decret N\o\ 2008-53 dated January 29, 
2008, to act on behalf of the Government with respect to the Compact 
and the Program. For the avoidance of doubt, the designation of MCA-
Senegal (and MFG-MCA prior to MCA-Senegal's establishment) as set forth 
in this Section 3.2(b) will not relieve the Government of any of its 
obligations or responsibilities as set forth hereunder, under any 
related agreement (including, upon execution thereof, the PIA), or in 
the Program Guidelines, for which the Government remains fully 
responsible. MCC hereby acknowledges and consents to the designation in 
this Section 3.2(b).
    (c) The Government will ensure that no law or regulation in Senegal 
now or hereinafter in effect makes or will make unlawful or otherwise 
prevent or hinder the performance of any of the Government's 
obligations under this Compact, the PIA, or any other related agreement 
or any transaction contemplated hereby or thereby.
    (d) The Government will ensure that any assets or services funded 
in whole or in part (directly or indirectly) by MCC Funding will be 
used solely in furtherance of this Compact and the Program unless 
otherwise agreed by MCC in writing.
    (e) The Government will take all necessary or appropriate steps to 
achieve the Program Objective and Project Objectives during the Compact 
Term.
    (f) The Government will fully comply with the Program Guidelines, 
as applicable, in its implementation of the Program.

Section 3.3 Policy Performance

    In addition to undertaking the specific policy, legal, and 
regulatory reform commitments identified in Annex I (if any), the 
Government will seek to maintain and to improve its level of 
performance under the policy criteria identified in Section 607 of the 
MCA Act, and the selection criteria and methodology used by MCC.

Section 3.4 Government Assurances

    The Government assures MCC that:
    (a) as of the date this Compact is signed by the Government, the 
information provided to MCC by or on behalf of the Government in the 
course of reaching agreement with MCC on this Compact is true, correct 
and complete in all material respects;
    (b) this Compact, upon its ratification by the Government, does 
not, and will not, conflict with any other international agreement or 
other obligation of the Government or any of the laws of Senegal; and
    (c) the Government will not invoke any of the provisions of its 
internal law to justify or excuse a failure to perform its duties or 
responsibilities under this Compact.

Section 3.5 Implementation Letters

    From time to time, MCC may provide guidance to the Government in 
writing on any matters relating to this Compact, MCC Funding, or 
implementation of the Program (each, an ``Implementation Letter''). The 
Government will apply such guidance in implementing the Program. 
Without limiting the foregoing, either Party may, through its Principal 
Representative or any Additional Representative, as the case may be, 
initiate discussions that may result in a jointly agreed-upon 
Implementation Letter to confirm and record their mutual understanding 
on aspects related to the implementation of this Compact, the PIA, or 
other related agreements.

Section 3.6 Procurement

    The Government will ensure that the procurement of all goods, 
works, and services by the Government, or any applicable provider 
providing goods, works, and services, to implement the Program will be 
consistent with the program procurement guidelines posted from time to 
time on the MCC Web site (the ``MCC Program Procurement Guidelines''). 
The MCC Program Procurement Guidelines include, among others, the 
following requirements:
    (a) open, fair, and competitive procedures must be used in a 
transparent manner to solicit, award and administer contracts and to 
procure goods, works, and services;
    (b) solicitations for goods, works, and services must be based upon 
a clear and accurate description of the goods, works, and services to 
be acquired;
    (c) contracts must be awarded only to qualified contractors that 
have the capability and willingness to perform the contracts in 
accordance with their terms on a cost effective and timely basis; and
    (d) no more than a commercially reasonable price, as determined, 
for example, by a comparison of price quotations and market prices, 
will be paid to procure goods, works, and services.

Section 3.7 Records; Accounting; Covered Providers; Access

    (a) Government Books and Records. The Government will maintain, and 
will use its best efforts to ensure that all Covered Providers maintain 
accounting books, records, documents, and other evidence relating to 
the Program adequate to show, to MCC's satisfaction, the use of all MCC 
Funding (``Compact Records''). In addition, the Government will furnish 
or cause to be furnished to MCC, upon its request, all such Compact 
Records.
    (b) Accounting. The Government will maintain and will use its best 
efforts to ensure that all Covered Providers maintain Compact Records 
in accordance with generally accepted accounting principles prevailing 
in the United States, or at the Government's option and with MCC's 
prior written approval, other accounting principles, such as those (i) 
prescribed by the International Accounting Standards Board, or (ii) 
then prevailing in Senegal. Compact Records must be maintained for at 
least five (5) years after the end of the Compact Term or for such 
longer period, if any, required to resolve any litigation, claims or 
audit findings or any statutory requirements.
    (c) Providers and Covered Providers. Unless the Parties agree 
otherwise in writing, a ``Provider'' is (i) any entity of the 
Government that receives or uses MCC Funding or any other Program asset 
in carrying out activities in furtherance of this Compact or (ii) any 
third party that receives at least US$50,000 in the aggregate of MCC 
Funding (other than as salary or compensation as an employee of an 
entity of the Government) during the Compact Term. A ``Covered 
Provider'' is (i) a non-United States Provider that receives (other 
than pursuant to a direct contract or agreement with MCC) US$300,000 or 
more of MCC Funding in any Government fiscal year or any other non-
United States person or entity that receives, directly or indirectly, 
US$300,000 or more of MCC Funding from any Provider in such fiscal 
year, or (ii) any United States Provider that receives (other than 
pursuant to a direct contract or agreement with MCC) US$500,000 or more 
of MCC Funding in any Government fiscal year or any other

[[Page 54355]]

United States person or entity that receives, directly or indirectly, 
US$500,000 or more of MCC Funding from any Provider in such fiscal 
year.
    (d) Access. Upon MCC's request, the Government, at all reasonable 
times, will permit, or cause to be permitted, authorized 
representatives of MCC, an authorized United States inspector general, 
the United States Government Accountability Office, any auditor 
responsible for an audit contemplated herein or otherwise conducted in 
furtherance of this Compact, and any agents or representatives engaged 
by MCC or the Government to conduct any assessment, review, or 
evaluation of the Program, the opportunity to audit, review, evaluate, 
or inspect facilities and activities funded in whole or in part by MCC 
Funding.

Section 3.8 Audits; Reviews

    (a) Government Audits. Except as the Parties may otherwise agree in 
writing, the Government will, on at least a semi-annual basis, conduct, 
or cause to be conducted, financial audits of all disbursements of MCC 
Funding covering the period from signing of this Compact until the 
earlier of the following December 31 or June 30 and covering each six-
month period thereafter ending December 31 and June 30, through the end 
of the Compact Term. In addition, upon MCC's request, the Government 
will ensure that such audits are conducted by an independent auditor 
approved by MCC and named on the list of local auditors approved by the 
Inspector General of MCC (the ``Inspector General'') or a United 
States-based certified public accounting firm selected in accordance 
with the ``Guidelines for Financial Audits Contracted by MCA'' (the 
``Audit Guidelines'') issued and revised from time to time by the 
Inspector General, which are posted on the MCC Web site. Audits will be 
performed in accordance with the Audit Guidelines and be subject to 
quality assurance oversight by the Inspector General. Each audit must 
be completed and the audit report delivered to MCC no later than ninety 
(90) days after the first period to be audited and no later than ninety 
(90) days after each June 30 and December 31 thereafter, or such other 
period as the Parties may otherwise agree in writing.
    (b) Audits of United States Entities. The Government will ensure 
that agreements between the Government or any Provider, on the one 
hand, and a United States nonprofit organization, on the other hand, 
that are financed with MCC Funding state that the United States 
nonprofit organization is subject to the applicable audit requirements 
contained in OMB Circular A-133 issued by the United States Government 
Office of Management and Budget (``OMB''). The Government will ensure 
that agreements between the Government or any Provider, on the one 
hand, and a United States for-profit Covered Provider, on the other 
hand, that are financed with MCC Funding state that the United States 
for-profit organization is subject to audit by the applicable United 
States Government agency, unless the Government and MCC agree otherwise 
in writing.
    (c) Corrective Actions. The Government will (i) use its best 
efforts to ensure that Covered Providers take, where necessary, 
appropriate and timely corrective actions in response to audits, (ii) 
consider whether a Covered Provider's audit necessitates adjustment of 
the Government's records, and (iii) require each such Covered Provider 
to permit independent auditors to have access to its records and 
financial statements as necessary.
    (d) Audit by MCC. MCC will have the right to arrange for audits of 
the Government's use of MCC Funding.
    (e) Cost of Audits, Reviews or Evaluations. MCC Funding may be used 
to fund the costs of any audits, reviews, or evaluations required under 
this Compact.

Article 4. Communications

Section 4.1 Communications

    Any document or communication required or submitted by either Party 
to the other under this Compact must be in writing and, except as 
otherwise agreed with MCC, in English. For this purpose, the address of 
each Party is set forth below.
    To MCC:
    Millennium Challenge Corporation, Attention: Vice President, 
Compact Implementation, (in each case, with a copy to the Vice 
President and General Counsel), 875 Fifteenth Street, NW., Washington, 
DC 20005, United States of America, Facsimile: (202) 521-3700, 
Telephone: (202) 521-3600, E-mail: <a href="/cdn-cgi/l/email-protection#da8c8a93b7aab6bfb7bfb4aebbaeb3b5b49ab7b9b9f4bdb5ac"><span class="__cf_email__" data-cfemail="e0b6b0a98d908c858d858e948194898f8ea08d8383ce878f96">[email protected]</span></a> (Vice 
President, Compact Implementation), <a href="/cdn-cgi/l/email-protection#99cfc9defcf7fcebf8f5daf6ecf7eafcf5d9f4fafab7fef6ef"><span class="__cf_email__" data-cfemail="1f494f587a717a6d7e735c706a716c7a735f727c7c31787069">[email protected]</span></a> (Vice 
President and General Counsel).
    To the Government:
    Ministry of Economy and Finance, Rue Rene Ndiaye, BP 4017, Dakar, 
Senegal, Tel: +221 (33) 822 2899, Fax: +221 (33) 822 4195.
    with a copy to:
    To MFG-MCA (until MCA-Senegal's establishment), Avenue Bourguiba, 
Immeuble Gamma, 3eme etage, Dakar, Senegal, Tel: +221 (33) 869 1665, 
Fax: +221 (33) 825 0887.
    Upon establishment of MCA-Senegal, MCA-Senegal will notify the 
Parties of its contact details.

Section 4.2 Representatives

    For all purposes of this Compact, the Government will be 
represented by the individual holding the position of, or acting as, 
the Minister of Economy and Finance of Senegal, and MCC will be 
represented by the individual holding the position of, or acting as, 
Vice President, Compact Implementation (each of the foregoing, a 
``Principal Representative''). Each Party, by written notice to the 
other Party, may designate one or more additional representatives 
(each, an ``Additional Representative'') for all purposes other than 
signing amendments to this Compact. The Government hereby irrevocably 
designates the Director General of MFG-MCA as an Additional 
Representative, to be replaced by the Director General of MCA-Senegal, 
upon the establishment of MCA-Senegal. A Party may change its Principal 
Representative to a new representative that holds a position of equal 
or higher rank upon written notice to the other Party.

Section 4.3 Signatures

    With respect to all documents other than this Compact or an 
amendment to this Compact, a signature delivered by facsimile or 
electronic mail will be binding on the Party delivering such signature 
to the same extent as an original signature would be.

Article 5. Termination; Suspension; Refunds

Section 5.1 Termination; Suspension

    (a) Either Party may terminate this Compact without cause in whole 
by giving the other Party thirty (30) days' written notice. MCC may 
also terminate this Compact without cause in part by giving the 
Government thirty (30) days' written notice.
    (b) MCC may, immediately, upon written notice to the Government, 
suspend or terminate this Compact or MCC Funding, in whole or in part, 
and any obligation related thereto, if MCC determines that any 
circumstance identified by MCC as a basis for suspension or termination 
(whether in writing to the Government or by posting on the MCC Web 
site) has occurred, which circumstances include but are not limited to 
the following:
    (i) The Government fails to comply with its obligations under this 
Compact, the PIA, or any other agreement or arrangement entered into by 
the Government in connection with this Compact or the Program;

[[Page 54356]]

    (ii) an event or series of events has occurred that MCC determines 
makes it probable that the Program Objective or any of the Project 
Objectives will not be achieved during the Compact Term or that the 
Government will not be able to perform its obligations under this 
Compact;
    (iii) a use of MCC Funding or continued implementation of this 
Compact or the Program violates or would violate applicable law or 
United States Government policy, whether now or hereafter in effect;
    (iv) the Government or any other person or entity receiving MCC 
Funding or using assets acquired in whole or in part with MCC Funding 
is engaged in activities that are contrary to the national security 
interests of the United States;
    (v) an act has been committed or an omission or an event has 
occurred that would render Senegal ineligible to receive United States 
economic assistance under Part I of the Foreign Assistance Act of 1961, 
as amended (22 U.S.C. 2151 et seq.), by reason of the application of 
any provision of the Foreign Assistance Act of 1961 or any other 
provision of law;
    (vi) the Government has engaged in a pattern of actions 
inconsistent with the criteria used to determine the eligibility of 
Senegal for assistance under the MCA Act; or
    (vii) the Government or another person or entity receiving MCC 
Funding or using assets acquired in whole or in part with MCC Funding 
is found to have been convicted of a narcotics offense or to have been 
engaged in drug trafficking.
    (c) All Disbursements will cease upon expiration, suspension, or 
termination of this Compact; provided, however, MCC may permit MCC 
Funding to be used, in compliance with this Compact and the PIA, to pay 
for (i) reasonable expenditures for goods, works, or services that are 
properly incurred under or in furtherance of the Program before 
expiration, suspension, or termination of this Compact, and (ii) 
reasonable expenditures (including administrative expenses) properly 
incurred in connection with the winding up of the Program within one 
hundred twenty (120) days after the expiration, suspension, or 
termination of this Compact, so long as, with respect to (i) and (ii) 
herein, the request for such expenditures is submitted within ninety 
(90) days after such expiration, suspension, or termination.
    (d) Subject to Section 5.1(c), upon the expiration, suspension, or 
termination of this Compact, (i) any amounts of MCC Funding not 
disbursed by MCC in accordance with the Compact and the PIA will be 
automatically released from any obligation in connection with this 
Compact, and (ii) any amounts of MCC Funding disbursed to the Permitted 
Account by MCC but not expended before the expiration, suspension or 
termination of this Compact, plus accrued interest thereon will be 
returned to MCC within thirty (30) days after the Government receives 
MCC's request for such return; provided, however, that if this Compact 
is suspended or terminated in part, MCC may request a refund for only 
the amount of MCC Funding allocated to the suspended or terminated 
portion.
    (e) MCC may reinstate any suspended or terminated MCC Funding under 
this Compact if MCC determines that the Government or other relevant 
person or entity has committed to correct each condition for which MCC 
Funding was suspended or terminated.

Section 5.2 Refunds; Violation

    (a) If any MCC Funding, any interest or earnings thereon, or any 
asset acquired in whole or in part with MCC Funding is used for any 
purpose in violation of the terms of this Compact or the PIA, including 
but not limited to any violation of the Program Guidelines, then MCC 
may require the Government to repay to MCC in United States Dollars the 
value of the misused MCC Funding, interest, earnings, or asset, plus 
interest within thirty (30) days after the Government's receipt of 
MCC's request for repayment. The Government will not use MCC Funding, 
proceeds thereof or Program assets to make such payment.
    (b) Notwithstanding any other provision in this Compact or any 
other agreement to the contrary, MCC's right under this Section 5.2 for 
a refund will continue during the Compact Term and for a period of (i) 
five years thereafter or (ii) one year after MCC receives actual 
knowledge of such violation, whichever is later.

Section 5.3 Survival

    The Government's responsibilities under Sections 2.4, 2.6, 2.7, 
2.8, 3.7, 3.8, 5.1(c), 5.1(d), 5.2, 5.3, 6.2, 6.4, 6.9, and 8.1 of this 
Compact will survive the expiration, suspension or termination of this 
Compact.

Article 6. Compact Annexes; Amendments; Governing Law

Section 6.1 Annexes

    Each annex to this Compact constitutes an integral part hereof, and 
references to ``Annex'' mean an annex to this Compact unless otherwise 
expressly stated.

Section 6.2 Amendments

    (a) The Parties may amend this Compact only by a written agreement 
signed by the Principal Representatives.
    (b) Without formally amending this Compact, the Government hereby 
acknowledges and agrees that the Parties, may, through the Principal 
Representatives or any Additional Representative, as the case may be, 
in writing, modify any Annex to this Compact to (i) suspend, terminate, 
or modify any project described in Annex I (each, a ``Project'' and 
collectively, the ``Projects'') or to create a new project, (ii) change 
the allocations of funds among the Projects, the Project activities, or 
any activity under Program administration or monitoring and evaluation, 
or between a Project identified as of the signature of this Compact and 
a new project, (iii) modify the terms of Section B.3 of Annex I, or 
(iv) add, delete, or waive any condition precedent described in Annex 
IV, provided that any such modification described in (i) through (iv) 
(1) is consistent in all material respects with the Program Objective, 
(2) does not cause the amount of Program Funding to exceed the 
aggregate amount specified in Section 2.1 of this Compact (as may be 
modified by operation of Section 2.2(e) of this Compact), (3) does not 
cause the amount of Compact Implementation Funding to exceed the 
aggregate amount specified in Section 2.2(a) of this Compact, (4) does 
not cause the Government's responsibilities or contribution of 
resources to be less than specified in this Compact, (5) does not 
extend the Compact Term, and (6) in the case of a modification to 
change allocations of funds among Projects or the creation of a new 
project, does not materially adversely affect any activity under 
Program administration or monitoring and evaluation.
    (c) Any modification of any annex to this Compact executed in 
accordance with Section 6.2(b), or any modification of any other 
provision of this Compact pursuant to Section 6.2(a), shall be binding 
on the Government without the need for further action by the 
Government, any further parliamentary action, or satisfaction of any 
additional domestic requirements of Senegal.

Section 6.3 Inconsistencies

    In the event of any conflict or inconsistency between:
    (a) any annex to this Compact and any of Articles 1 through 8, such 
Articles 1 through 8 will prevail; or
    (b) this Compact and any other agreement between the Parties 
regarding the Program, this Compact will prevail.

[[Page 54357]]

Section 6.4 Governing Law

    This Compact is an international agreement and as such will be 
governed by the principles of international law.

Section 6.5 Additional Instruments

    Any reference to activities, obligations, or rights undertaken or 
existing under or in furtherance of this Compact or similar language 
will include activities, obligations, and rights undertaken by or 
existing under or in furtherance of any agreement, document, or 
instrument related to this Compact and the Program.

Section 6.6 References to MCC Web site

    Any reference in this Compact, the PIA, or any other agreement 
entered into in connection with this Compact, to a document or 
information available on, or notified by posting on the MCC Web site 
will be deemed a reference to such document or information as updated 
or substituted on the MCC Web site from time to time.

Section 6.7 References to Laws, Regulations, Policies, and Guidelines

    Each reference in this Compact, the PIA, or any other agreement 
entered into in connection with this Compact, to a law, regulation, 
policy, guideline, or similar document (including but not limited to 
the Program Guidelines) will be construed as a reference to such law, 
regulation, policy, guideline, or similar document as it may, from time 
to time, be amended, revised, replaced, or extended and will include 
any law, regulation, policy, guideline, or similar document issued 
under or otherwise applicable or related to such law, regulation, 
policy, guideline, or similar document.

Section 6.8 MCC Status

    MCC is a United States government corporation acting on behalf of 
the United States government in the implementation of this Compact. MCC 
and the United States government have no liability under this Compact, 
the Program Implementation Agreement, or any related agreement, are 
immune from any action or proceeding arising under or relating to any 
of the foregoing documents, and the Government hereby waives and 
releases all claims related to any such liability. In matters arising 
under or relating to this Compact, the Program Implementation 
Agreement, or any related agreement neither MCC nor the United States 
government will be subject to the jurisdiction of the courts of Senegal 
or of any other jurisdiction or of any other body.

Section 6.9 English Language

    This Compact is executed in English and in the event of any 
ambiguity or conflict between this official English version and any 
translation prepared for the convenience of the Parties, this official 
English version will prevail.

Section 6.10 Counterparts; Electronic Delivery

    (a) Counterparts. This Compact, and any amendment or other 
agreements arising out of this Compact, may be executed in one or more 
counterpart signatures, and each counterpart when so executed and 
delivered shall be an original instrument, but such counterparts 
together shall constitute a single agreement.
    (b) Electronic Delivery. A signature to this Compact shall be 
delivered only as an original signature. With respect to all other 
signatures, including for an amendment or any other agreements arising 
out of this Compact, a signature delivered by facsimile or electronic 
mail in accordance with Section 4.1 of this Compact shall be deemed an 
original signature and shall be binding on the Party delivering such 
signature, and the Parties hereby waive any objection to such signature 
or to the validity of the underlying document, certificate, notice, 
instrument, or agreement on the basis of the signature's legal effect, 
validity or enforceability solely because it is in facsimile or 
electronic form.

Article 7. Entry Into Force

Section 7.1 Domestic Requirements

    Before this Compact enters into force, the Government will take all 
necessary steps to ensure that immediately upon this Compact entering 
into force (a) this Compact and the PIA and all of the provisions of 
this Compact and the PIA are valid and binding and are in full force 
and effect in Senegal, (b) this Compact, the PIA and any other 
agreement entered into in connection with this Compact to which the 
Government and MCC are parties are international agreements under 
international law such that the Government may not invoke the 
provisions of its internal law as justification for failure to perform 
its obligations thereunder, and (c) no laws of Senegal (other than the 
constitution of Senegal), whether now or hereafter in effect, will take 
precedence or prevail over the terms of this Compact or the PIA.

Section 7.2 Conditions Precedent to Entry Into Force

    Before this Compact enters into force:
    (a) the PIA must have been executed by the parties thereto;
    (b) The Government must have delivered to MCC:
    (i) a certificate, in form and substance satisfactory to MCC, 
signed and dated by the Principal Representative of the Government, or 
such other duly authorized representative of the Government acceptable 
to MCC, certifying that the Government has satisfied the requirements 
of Section 7.1;
    (ii) a legal opinion from the Secretariat General du Gouvernement 
of Senegal (or such other legal representative of the Government 
acceptable to MCC), in form and substance satisfactory to MCC; and
    (iii) complete, certified copies of all decrees, legislation, 
regulations, or other governmental documents relating to the 
Government's domestic requirements for this Compact to enter into force 
and the satisfaction of Section 7.1, which MCC may post on its Web site 
or otherwise make publicly available; and
    (c) MCC must determine that after signature of this Compact, the 
Government has not engaged in any action or omission that is 
inconsistent with the eligibility criteria for MCC Funding.

Section 7.3 Date of Entry Into Force

    This Compact will enter into force on the later of (a) the date of 
the last letter in an exchange of letters between the Principal 
Representatives confirming that each Party has completed its domestic 
requirements for entry into force of this Compact and (b) the date that 
all conditions set forth in Section 7.2 have been satisfied.

Section 7.4 Compact Term

    This Compact will remain in force for five years after its entry 
into force, unless terminated earlier under Section 5.1 (the ``Compact 
Term'').

Section 7.5 Provisional Application

    Upon signature of this Compact and until this Compact has entered 
into force in accordance with Section 7.3, the Parties will 
provisionally apply the terms of this Compact and the PIA; provided 
that, no Program Funding will be made available or disbursed before 
this Compact enters into force.

Article 8. Additional Government Covenants

Section 8.1 Additional Government Resources

    (a) Without limiting the generality of Section 2.6(a), the 
Government will contribute, through provision in the law containing the 
annual governmental

[[Page 54358]]

budget for Senegal, an amount necessary and adequate to cover all costs 
associated with the following (no MCC Funding, proceeds thereof, or 
Program assets may be applied by the Government in satisfaction of its 
obligations under this Section 8.1(a)):
    (i) The staffing and operations of a ``Cellule d'Appui au MCA-
Senegal'' (as further described in Annex I);
    (ii) consultant services, including but not limited to, any such 
services already contracted by MFG-MCA for the purpose of producing 
detailed designs in connection with the Roads Rehabilitation Project; 
the independent audit required in connection with the Irrigation and 
Water Resources Management Project as described in the PIA; and any 
other consultant services in connection with the Program that will not 
be financed with MCC Funding but are required for the successful 
implementation of the Program, as may be required by MCC from time to 
time;
    (iii) any incurred severance costs or other financial liabilities 
triggered by termination or expiration of the MFG-MCA or MCA-Senegal 
employee contracts, pursuant to the terms of such contracts; and
    (iv) required office space for MFG-MCA, MCA Senegal, the ``Cellule 
d'Appui au MCA-Senegal,'' and the MCC resident country mission.

Section 8.2 Procurement

    The Government, including MCA-Senegal (and MFG-MCA prior to MCA-
Senegal's establishment), will exclusively use the MCC Program 
Procurement Guidelines in connection with Program procurements financed 
with MCC Funding. With respect to Program procurements financed by the 
Government, the Government, including MCA-Senegal (and MFG-MCA prior to 
MCA-Senegal's establishment), will ensure that such procurements are 
consistent with the general principles set forth in Section 3.6 of this 
Compact.
    In Witness Whereof, the undersigned, duly authorized by their 
respective governments, have signed this Compact this 16th day of 
September 2009.
    Done at Washington, DC.
    For Millennium Challenge Corporation, on behalf of the United 
States of America, Name: Darius Mans, Title: Acting Chief Executive 
Officer.
    For the Republic of Senegal, Name: Abdoulaye Diop, Title: Minister 
of Economy and Finance.

Annex I Program Description

    This Annex I describes the Program that MCC Funding will support in 
Senegal during the Compact Term.

A. Program Overview

1. Background and Consultative Process
    With a population of approximately 12 million inhabitants, the west 
African nation of Senegal was originally declared eligible for MCC 
assistance in 2004. Senegal shares borders in the north with 
Mauritania, in the east with Mali and in the south with Guinea and 
Guinea-Bissau, and the Gambia runs through its center, spatially 
separating its Casamance region (the ``Casamance'') from the rest of 
Senegal's territory. Based on national poverty reduction and food 
security priorities contained in the Government's 1998 Master Plan for 
agricultural development in the Senegal River Valley (the ``Valley'') 
and the Government's Road Sector Master Plan, and confirmed in broad-
based Government consultations that occurred from February through July 
2008, the Program focuses on poverty reduction in the Valley in 
northern Senegal, and the Casamance in southern Senegal.
    The Valley has been targeted by the Government, numerous donors, 
and nongovernmental organizations (``NGOs'') for investment, both to 
encourage economic growth in this region and to increase Senegal's food 
security in years to come. The Valley, like the Casamance, is rich in 
agricultural production, especially for rice, the principal staple of 
the Senegalese diet. The Valley benefits from a very favorable 
environment for intensive irrigation; however, low agricultural yields 
have been a persistent problem due to the poor quality of the existing 
irrigation and drainage infrastructure; insufficient delivery of 
available water to agricultural areas; and lack of an appropriate 
drainage system. The Irrigation and Water Resources Management Project 
will address these constraints.
    The Casamance is the poorest region of Senegal, but also has the 
highest potential for economic development after the Valley. The 
Casamance is rich in natural resources and has the potential for 
enormous agricultural productivity, which could contribute 
significantly both to national growth and food security in the entire 
country. The Government identified the Casamance's poor road transport 
network, which leaves few means for goods and services currently 
produced in the region to be exported nationally or regionally, as a 
major constraint to economic development in the region. The Roads 
Rehabilitation Project will address this constraint.
2. Description of Program and Beneficiaries
    The Program Objective is to enable improved agricultural 
productivity and to expand access to markets and services through 
critical infrastructure investments in the roads and irrigation 
sectors. The Program consists of the Roads Rehabilitation Project and 
the Irrigation and Water Resources Management Project as further 
described in this Annex I.
    By 2029, the Program is expected to benefit approximately 1.66 
million individuals, or approximately 138,600 households. The largest 
number of beneficiaries--approximately 1.1 million--would be located in 
the Casamance. About 75% of the Program beneficiaries in the Casamance 
are expected to come from households living on less than 2 dollars per 
person per day. An estimated 42% of total Program beneficiaries in the 
Casamance live on US$1.25 per person per day, or less. Although Program 
activities in the Casamance are expected to cast a wider net over 
beneficiaries, about 38% of total benefits generated by the Program 
would accrue to beneficiaries in that region. Approximately 62% of 
Program benefits would accrue to beneficiaries in the Valley. Here, 
approximately 45% of total beneficiaries are expected to be from 
households subsisting on less than US$2 per person per day and 25% from 
households living on US$1.25, or less. Whereas Program investments in 
the Valley will affect the welfare of a smaller number of people than 
in the south, they together are expected to extend significantly and 
solidify gains in the reduction of poverty in the north. The Program 
would be an important preliminary contribution to the development of 
the Casamance and greatly facilitate other future investment there.
3. Environmental and Social Accountability
    The two Projects, both of which are classified as Category A due to 
potential site-specific environmental and social impacts, will be 
implemented in compliance with the MCC Environmental Guidelines, MCC's 
guidance on the integration of gender in program implementation 
delivered by MCC to the Government or posted on the MCC Web site (the 
``MCC Gender Policy''), and the MCC Guidance on the Implementation of 
Resettlement Activities (or any other MCC policy comparable to the 
World Bank's Operational Policy on Involuntary Resettlement in effect 
as of July 2007 (``OP 4.12'') notified to the Government

[[Page 54359]]

from time to time) (the ``MCC Resettlement Guidance''). The Government 
will also ensure that the Projects comply with all national 
environmental laws and regulations, licenses and permits, except to the 
extent such compliance would be inconsistent with this Compact. The 
Government will: (a) Undertake and complete any environmental review 
required by MCC or under the laws of Senegal; (b) implement to MCC's 
satisfaction environmental and social mitigation measures identified in 
such environmental review; and (c) commit to fund environmental 
mitigation, (including costs of resettlement) in excess of MCC Funding 
not specifically provided for in the budget for any Project. The 
Government will ensure that all construction contractors develop, 
implement and monitor an HIV/AIDS awareness program acceptable to MCC.

B. Description of the Projects

    Set forth below is a description of each of the Projects that the 
Government will implement, or cause to be implemented, using MCC 
Funding to advance the applicable Project Objective. In addition, 
specific activities that will be undertaken within each Project (each, 
an ``Activity''), including sub-activities, are also described. To the 
extent that there are cost savings with respect to a Project's 
implementation, such savings, with express written approval by MCC, may 
be used to expand the scope of any activity undertaken as part of the 
Program, consistent with the Program Objective and subject to the 
limitations set forth in Section 6.2 of this Compact.
1. Roads Rehabilitation Project
    (a) Summary of Project and Activities.
    The Roads Rehabilitation Project is designed to increase 
beneficiary access to domestic and international markets through 
improved road quality and a reduction in travel times and costs. The 
road sector plays a critical role in Senegal. About 99% of goods 
produced in Senegal are transported by roads, and 95% of domestic 
travel is done by road. The roads addressed by the Roads Rehabilitation 
Project, national road no. 2 (``RN2'') and national road no. 6 
(``RN6''), are prioritized in the Government's Road Sector Master Plan, 
and their rehabilitation is in line with the national policy of 
increasing growth through road creation, renovation, and maintenance to 
facilitate transport of manufactured products, minerals, and 
agricultural production, and to encourage tourism throughout the 
country.
    The RN2 is the northernmost road of Senegal, bordering the Senegal 
River. It links the capital city of Dakar to St. Louis, the second 
largest city of Senegal, and continues toward the eastern region of 
Senegal to the city of Kidira, close to the border with Mali. The RN2 
serves as the primary road to transport and export products from 
irrigation areas along the Senegal River. It is also a strategic 
connector road from Dakar Harbor to Mauritania and Mali and to southern 
cities in Senegal. The RN6 links Senegal with Guinea Bissau, Guinea 
(Conakry), and Mali. The RN6 is also a strategic road that allows 
transportation of local agricultural products and other goods and 
services from the Casamance to the rest of Senegal without having to 
travel through the Gambia. The RN6 provides the only domestic land 
access to and from the Casamance. For local agricultural producers to 
transport their products from the Casamance to the rest of Senegal, the 
only land alternative to the RN6 is a road through the Gambia and a 
ferry boat across the Gambia River.
    The Roads Rehabilitation Project consists of the following 
Activities:
    (i) RN2 Road Activity.
    MCC Funding will be used to rehabilitate and upgrade approximately 
120 kilometers of the RN2 road, from Richard Toll to Ndioum, and 
replace or upgrade associated structures, such as bridges and culverts, 
to eliminate flooding and improve road safety. The RN2's improvement is 
expected to stimulate domestic and trans-border traffic and commerce 
generally as well as specifically provide reliable, year-round access 
to markets, schools, and hospitals, including during the rainy seasons, 
throughout the primarily agricultural and agricultural processing area 
where the Activity is focused. Specifically, MCC Funding will support:
    (1) Construction Costs. These costs include, without limitation, 
pavement strengthening, road widening, road safety improvements, 
replacement or upgrading of associated structures, such as bridges and 
culverts, and any activity associated with the environmental management 
plan developed with respect to the Activity.
    (2) Non-Construction Costs. These costs include, without 
limitation, studies, construction supervision, implementation of any 
resettlement action plan developed with respect to the Activity, and 
other project management costs to be incurred in connection with the 
RN2 Road Activity.
    (ii) RN6 Road Activity.
    MCC Funding will be used to rehabilitate and upgrade approximately 
256 kilometers of the RN6 road from Ziguinchor, and replace or upgrade 
associated structures of the RN6. Specifically, MCC Funding will 
support:
    (1) Construction Costs. These costs include, without limitation, 
pavement strengthening, road widening, road safety improvements, and 
replacement or upgrading of associated structures, such as bridges and 
culverts, and any activity associated with the environmental management 
plan developed with respect to the Activity.
    (2) Non-Construction Costs. These costs include, without 
limitation, studies, construction supervision, implementation of any 
resettlement action plan developed with respect to the Activity, and 
other project management costs to be incurred in connection with the 
RN6 Road Activity.
    (b) Beneficiaries.
    The RN2 Road Activity is expected to benefit approximately 21,000 
households or 250,000 individuals over the next 20 years. At present 
there are about 9,290 households, or 111,500 beneficiaries residing 
along the RN2. The RN6 Road Activity would affect some 102,000 
households or approximately 1.1 million people over the next 20 years. 
At present there is a population of about 44,000 households, or 474,000 
people along the road; but about 15,600 households outside the road 
catchment would also initially benefit, as much traffic also originates 
and ends outside the particular segments of the RN6 being upgraded by 
the RN6 Road Activity. Over the life of the investment, total average 
benefits per beneficiary for the RN2 are approximately US$870. 
Similarly, total average benefits per beneficiary for the RN6 are 
approximately US$530.
    (c) Environmental and Social Mitigation Measures.
    The RN2 Road Activity and the RN6 Road Activity are classified as 
``Category A.'' The Activities will produce site-specific and possibly 
cumulative environmental and social impacts. Environmental impact 
assessments have been initiated for both Activities; both will produce 
environmental management plans. The Roads Project will be implemented 
in accordance with MCC Environmental Guidelines, the MCC Gender Policy, 
and the MCC Resettlement Guidance, which will ensure that any necessary 
mitigation measures will be taken with respect to the issues identified 
in the environmental impact assessments and environmental management 
plans.
    (d) Donor Coordination.
    The Roads Rehabilitation Project conforms both to the Economic 
Community of West African States' standards, as well as to standards 
used

[[Page 54360]]

by other donors in projects that link to Program investments. The two 
donor organizations also involved in road construction are the European 
Union (``EU'') for the RN2 and the African Development Bank for the 
RN6. The U.S. Agency for International Development (``USAID'') is not 
significantly involved in investments in the road sector in Senegal.
    (e) Sustainability.
    Senegal has appropriate laws, structures, capacity, systems, and 
governance to continually improve sustainability of the road sector. 
The Government has shown willingness to strengthen the maintenance 
funding regime, and the country has shown much progress in its 
maintenance funding performance. An autonomous agency, the Agence 
Autonome de Transports Routiers, or the Independent Agency for Road 
Transportation (``AATR''), was created with the assistance of other 
donors to take responsibility for road development and maintenance in 
Senegal. AATR has been the beneficiary of rapid capacity development 
measures with the support of other donors. As a result, the agency is 
now operating with technically capable staff within both its 
headquarters and its regional offices. Several institutional 
strengthening measures have been implemented by AATR, including the 
systemization of road inventory and road condition, and prioritization 
of maintenance activities based on traffic, condition, cost-benefit, 
and hydraulics. Maintenance funding has been increasing rapidly since 
1989. The available road maintenance funds were 3 billion CFA in 1989; 
15 billion CFA in 1995; 18 billion CFA in 2007; and 37 billion CFA in 
2009. As a result of this increase in maintenance funding, road 
conditions have improved significantly: only 35% of paved roads were 
deemed to be in ``good'' or ``average'' condition in 2000, but 60% were 
deemed to be in 2007.
    The Government has created a road fund managed by an autonomous 
unit and governed by a board of directors with members from the public 
and private sectors (the ``Road Fund''). In 2008, the Road Fund was 
migrated to a second generation fund, whereby fuel levy collections 
were deposited directly through adoption of a funding law. The law 
allows for fuel levies of about 35 CFA for super diesel, 32 CFA for 
diesel, and 16 CFA for gasoline.
    Nevertheless, there is a persistent gap between the need for 
maintenance and available funds. The 2009 budget gap is currently 26%; 
the 2009 available maintenance budget provides only 74% of the annual 
road maintenance funding actually required for 2009. As part of the 
Program, the Government has agreed on a schedule to reduce and 
eventually eliminate any annual funding gap by 2015. Measurable 
progress monitors are set forth in the Program Implementation Agreement 
as conditions precedent to disbursement for the Roads Rehabilitation 
Project.
    (f) Policy, Legal and Regulatory Reforms.
    There are no policy, legal, or regulatory reforms required to 
implement the Roads Rehabilitation Project, other than those that may 
be required with respect to the Government's need to satisfy conditions 
precedent in connection with reducing the funding gap with respect to 
the road maintenance fund.
2. Irrigation and Water Resources Management Project
    (a) Summary of Project and Activities.
    The Valley, the other region in Senegal rich in agricultural 
production, benefits from a very favorable environment for intensive 
irrigation for several reasons. First, there is a long irrigation 
history and experience in the Valley (some irrigation schemes have 
existed for more than 30 years). Second, the region has strong 
Government support and a reliable institution for maintenance and 
technical support through the regional, semi-autonomous agency 
responsible for all aspects of agricultural development in the Valley, 
the Soci[eacute]t[eacute] Nationale d'Am[eacute]nagement et 
d'Exploitation des Terres du Delta du fleuve S[eacute]n[eacute]gal et 
des Vall[eacute]es du fleuve S[eacute]n[eacute]gal et de la 
Fal[eacute]m[eacute] (``SAED''). Third, farmer associations, supported 
by SAED, have demonstrated their capability to manage and maintain 
large irrigation schemes. Finally, organized commercialization exists 
throughout the region, although improvements are still required along 
the value chain.
    Optimal agricultural production in the Valley could supply Senegal 
with more than a significant share of its agricultural products, 
especially rice, the principal staple of the Senegalese diet. However, 
low agricultural yields have resulted in several thousand hectares of 
abandoned land. Three factors contribute directly to low yields: (i) 
Poor quality of the existing irrigation and drainage infrastructure; 
(ii) insufficient delivery of available water to agricultural areas; 
and (iii) lack of an appropriate drainage system, which leads to soil 
salinity.
    The Irrigation and Water Resources Management Project--comprising 
infrastructure investments in the Senegal River Delta (the ``Delta'') 
and Department of Podor (the ``Podor'') areas--conforms to Senegal's 
1998 Master Plan for poverty reduction and agricultural development in 
the Valley and is designed to address the factors contributing to low 
agricultural yields described above. The Project will: (1) Increase the 
volume of irrigation water in the Valley to develop approximately 
8,500-10,500 hectares of additional irrigated land; (2) eliminate the 
risk of abandonment of approximately 26,000 hectares of existing 
irrigable land; and (3) provide additional supply of water for human 
and animal use in the Delta, Podor, and adjoining areas. The Project 
will also rehabilitate drainage canals, which will further eliminate 
the risk of abandonment of irrigated land, as well as increase crop 
yields. The Project will also support a land tenure security activity, 
to provide for, or maintain, a secure land tenure environment for all 
of inhabitants of the region directly affected by the Project. The 
Project may also invest in complementary social safeguard measures.
    The Irrigation and Water Resources Management Project consists of 
the following Activities:
    (i) Delta Activity.
    Irrigation in the Delta, situated in the northwestern section of 
Senegal, is heavily influenced by the operation level of the Diama Dam, 
situated at the mouth of the Senegal River. Currently, 31,080 hectares 
represents the total theoretically irrigable land in the area of the 
Delta targeted by the Project. However, due to insufficient water 
delivery and poor drainage, only 11,800 hectares are cultivated at any 
time over the year. MCC Funding will be used for improvements to the 
irrigation and drainage channels in the Delta. Specifically, MCC 
Funding will support:
    (1) Irrigation and Drainage Construction Activities. With respect 
to irrigation, these consist of weed removal, dredging, profiling of 
berms, and increasing levee heights, along with the rehabilitation or 
replacement of associated structures and pumping stations along eight 
irrigation sections. With respect to drainage, these consist of 
construction of a pump station, a bridge, a siphon, elevation of the 
levees and construction of compensatory channels. More details with 
respect to the Delta Activity construction activities are set forth in 
Schedule 1 attached to this Annex I.
    (2) Non-Construction Activities. These costs include, without 
limitation, studies, construction supervision, and other project 
management costs to be incurred in connection with the Delta Activity.
    (ii) Podor Activity.

[[Page 54361]]

    Senegal's 1998 Master Plan for poverty reduction and agricultural 
development in the Valley specifies the installation of 28 irrigation 
sites in the Podor, and one of these sites is at N'Gallenka. The Podor 
Activity, focused on the site of N'Gallenka, expands the Program's 
irrigation investments east of the Delta, into an area that is far more 
economically depressed than the Delta. The N'Gallenka site was chosen 
because of its high potential for rice production, sufficiency of water 
resources, available population, cost of dikes per hectare, and 
existing irrigation facilities. Furthermore, demonstration of the cost-
effectiveness of irrigation expansion in Podor should attract other 
private sector and donor investment in this area of high potential 
returns. MCC Funding will be used for the development of primary and 
secondary irrigation and drainage channels, and associated structures 
at the N'Gallenka site. Specifically, MCC Funding will support the 
construction costs associated with the development of the primary and 
secondary irrigation and drainage channels and associated structures, 
as well as related non-construction costs (studies, construction 
supervision, and other project management costs).
    (iii) Social Safeguard Measures Activity.
    The Government is actively seeking support to strengthen irrigation 
investments in the Valley with social development activities designed 
to diversify current livelihood strategies, slow emigration from the 
Delta, link Podor to markets, and improve the ability of women and 
youth to take advantage of the economic opportunities presented by the 
improved prospects for agricultural production. The Program may support 
the Government's efforts by financing certain social safeguard measures 
directly related to the Irrigation and Water Resources Management 
Project. Specifically, MCC Funding may be used for the construction of 
day care facilities, as well as the construction and initial operation 
of agricultural storage and information centers, and livestock 
multipurpose centers. In each case, these social safeguard measures are 
intended to complement the objectives of the Irrigation and Water 
Resources Management Project and/or to mitigate potential adverse 
impacts of the Project. For instance, the day care facilities should 
allow women to spend more time engaged in revenue-generating activities 
on the newly irrigated lands that will be allocated through the 
Project, while still providing their children with quality care. The 
agricultural storage and information centers are intended to provide 
much-needed price information and technical resources to decrease crop 
loss due to poor storage conditions. Finally, the livestock 
multipurpose centers are intended to provide much-needed technical 
resources and supplies to livestock owners, thereby reassuring 
pastoralists that might otherwise be marginalized by the Project 
because of the reduced amount of rangeland available for their herds. 
It should be noted that any use of MCC Funding for the Social Safeguard 
Measures Activity is entirely contingent upon the following three 
conditions being met: (1) Provision by the Government of any 
supplemental information required by MCC, in form and substance 
satisfactory to MCC, to enable MCC to make a funding decision with 
respect to this Activity (this may include, inter alia, a comprehensive 
operational plan for each measure that describes diligenced costs, 
staffing and equipment information and requirements, and information on 
day-to-day operations and maintenance of the centers, both during the 
Compact Term and afterwards); (2) a decision by MCC in writing agreeing 
to fund the Activity, in whole or in part, together with any conditions 
to such agreement; and (3) satisfaction of the first two conditions 
prior to the third anniversary of this Compact's entry into force.
    (iv) Land Tenure Security Activity.
    To improve the investment climate in the Project area and to 
mitigate the potential for land conflict due to increased demand for 
irrigated land as a result of the Irrigation and Water Resources 
Management Project, the Land Tenure Security Activity will support 
development and implementation of transparent, fair, and efficient 
processes for land allocation to ensure equitable and secure access to 
land in the irrigated perimeters. It will also equip local authorities 
with tools, such as manuals of procedures and land registries, to 
improve land management, and reinforce capacity through communication 
and training on the newly provided tools as well as existing land 
management tools. The Land Tenure Security activity will primarily 
support the allocation and formalization of land use rights by local 
rural councils (``CRs'') and local communal councils (``CCs'') 
according to existing Senegalese land law. Specifically, MCC Funding 
will support:
    (1) Design and implementation of a participatory and multi-step 
process for allocation by the CRs and CCs to producer groups and 
individual producers of parcels in irrigated perimeters developed or 
improved through the Irrigation and Water Resources Management Project. 
Land allocations will be formalized according to Senegalese land law 
through award of titres d'affectation (land certificates) to all 
holders of land rights in the irrigated perimeters. The process will 
include documentation of existing rights, identification and mapping of 
improved parcels, development of criteria for selection of 
beneficiaries, and transparent selection followed by award of the 
titres d'affectation and recordation of all land allocations in 
registers to be maintained by the CRs and CCs.
    (2) Reinforcement of land management capacity of CRs (and CCs), 
producer groups (GIEs and GPFs), and selected government agencies 
responsible for supporting rural community land management. Activities 
will center on development of new tools designed to adapt and more 
efficiently apply Senegalese land law in the context of the Valley, 
including a land allocation manual and land registry, and training on 
existing tools such as land occupation and allocation plan (``POAS'') 
and the Charter for the Irrigated Domain (``CDI'').
    (b) Beneficiaries.
    Beneficiaries of the Irrigation and Water Resources Management 
Project include households, owners or shareholders of farming 
enterprises, and households that have individuals employed in the 
operation of enterprise farms. The Project would benefit approximately 
22,390 households, or 268,700 individuals, through participation in own 
agricultural production or employment in agriculture. Assuming that 
households would, on average, cultivate two hectares of irrigated area, 
the scale of net revenue from a holding would have a substantial impact 
on the welfare of poor households. Average household size is about 
twelve persons. Average future revenues of about purchasing power 
parity (PPP) US$4,470 per two-hectare farm would increase household 
incomes by more than PPP US$1 per person per day. For households 
subsisting with incomes of PPP US$1.25 or less per person per day, this 
increment would move households from being extremely poor to being near 
poor (not far below or above PPP US$2 per person per day). It is 
estimated that the full development of the irrigated areas targeted by 
the Project will provide employment for approximately 9,000 households 
(benefits accruing to approximately 105,000 persons).
    (c) Environmental and Social Mitigation Measures.

[[Page 54362]]

    The Irrigation and Water Resources Management Project is classified 
as ``Category A.'' Environmental impact assessments have been 
initiated, and they will produce environmental management plans. The 
Project will be implemented in accordance with MCC Environmental 
Guidelines, the MCC Gender Policy, and the MCC Resettlement Guidance, 
which will ensure that any necessary mitigation measures will be taken 
with respect to the issues raised above.
    (d) Donor Coordination.
    The Government, from the earliest days of project identification 
and development, partnered and coordinated with all of the stakeholders 
in the Valley to ensure that (i) MCC's investments would be 
complementary to other existing and planned investments throughout the 
region, and (ii) would be supported by Government agencies, donors, and 
NGOs. All donors have endorsed the Program investments in the Valley 
because they recognize the need for significant investment in the 
region's infrastructure to complement their own investments. The 
current field-level focal points for donor coordination and 
collaboration are SAED and the Support Program for Local Development, 
respectively responsible for implementation of programs sponsored by 
the World Bank (``PDMAS'') and the Agence Fran[ccedil]aise de 
D[eacute]veloppement (the French Development Agency (``AFD'')).
    The principal donors investing in the region are USAID, the U.S. 
Department of Agriculture (``USDA''), the EU, AFD, the Japanese 
Development Agency, and the World Bank. USAID, for example, is 
increasing agricultural productivity through improvements to the 
agricultural value chain, including improving the quality and 
availability of inputs, cold storage and warehousing, and access to 
credit, and it is also implementing a natural resource management 
program that focuses on forest management for the production of select 
products (timber, resin, fruit, and crafts) for regional and 
international markets. The USDA, through its ``Food for Progress'' 
program, partners with NGOs such as Counterpart International to work 
directly with farmers and farmers' associations to provide training in 
agricultural best practices. AFD's ``Programme d'Appui aux 
Communaut[eacute]s Rurales'' (``PACR''), or ``Technical Assistance 
Program for Rural Communities,'' shares common objectives and 
geographical focus with the Land Tenure Security Activity; accordingly, 
MCC and AFD expect to coordinate closely implementation of the 
respective initiatives and target opportunities for synergy.
    (e) Sustainability.
    SAED is responsible for maintaining primary and secondary 
irrigation systems throughout the Valley. SAED's considerable human 
resources, technical capacity and experience have been enhanced in 
recent decades through the agency's central role in implementation of 
several international donor-sponsored programs, such as the PDMAS 
project and specific activities of the PACR. It also provides technical 
assistance and training to farmers for them to maintain tertiary 
irrigation systems.
    However, project maintenance activities in the Delta are funded 
with fees collected from farmers, and with funds provided by the 
Government to cover the gap between annual maintenance costs and total 
fees collected. Fee collection from farmers in the Delta zone is poor, 
with a collection efficiency of only 30%. Poor collection is primarily 
attributable to unreliable water supply and inadequate water 
availability. A lack of transparency in collection is also a 
contributor to poor collection efficiency. In order to improve 
collection of water user fees and to make more maintenance funds 
available for SAED to undertake required, periodic maintenance work, 
the Government will take specific steps agreed by MCC to improve 
collection of water user fees; these include the Government conducting 
an independent audit of maintenance, including roles, responsibilities, 
current arrangements, service performance and collection performance, 
as well as a financial analysis of maintenance, with the objective of 
identifying principal issues and recommending an action plan to improve 
sustainability (the ``Irrigation Maintenance Action Plan''). The 
Irrigation Maintenance Action Plan must be approved by the Ministry of 
Agriculture and implementation of the action plan--with measurable 
targets and a progress monitoring mechanism to evaluate performance and 
outcomes of implementation--will be monitored throughout the Compact 
Term.
    (f) Policy, Legal and Regulatory Reforms.
    There are no policy, legal, or regulatory reforms required to 
implement the Irrigation and Water Resources Management Project other 
than those that may be required by the Irrigation Maintenance Action 
Plan and implementing measures arising out of the Land Tenure Security 
Activity, such as the passage of an arr[ecirc]t[eacute] by the 
appropriate administrative authorities establishing land allocation 
committees and describing land allocation principles.
3. Implementation Framework
    (a) Overview.
    The implementation framework and the plan for ensuring adequate 
governance, oversight, management, monitoring and evaluation, and 
fiscal accountability for the use of MCC Funding are summarized below. 
MCC and the Government will enter into the Program Implementation 
Agreement, and any other agreements in furtherance of this Compact, all 
of which, together with this Compact, set out certain rights, 
responsibilities, duties and other terms relating to the implementation 
of the Program.
    (b) MCC.
    MCC will take all appropriate actions to carry out its 
responsibilities in connection with this Compact and the Program 
Implementation Agreement, including the exercise of its approval rights 
in connection with the implementation of the Program.
    (c) MCA-Senegal (and, prior to its establishment, MFG-MCA).
    The Government will establish MCA-Senegal through passage of a 
decree in substantially the form and on substantially the terms of the 
form of decree set forth in Schedule 2 to this Annex I (the 
``Establishment Decree''). In accordance with Section 3.2(d) of this 
Compact, MCA-Senegal will act on the Government's behalf to implement 
the Program and to exercise and perform the Government's rights and 
responsibilities with respect to the oversight, management, and 
implementation of the Program, including, without limitation, managing 
the implementation of Projects and their Activities, allocating 
resources, and managing procurements. The Government will ensure that 
MCA-Senegal takes all appropriate actions to implement the Program, 
including the exercise and performance of the rights and 
responsibilities designated to it by the Government pursuant to this 
Compact and the Program Implementation Agreement. Without limiting the 
foregoing, the Government will also ensure that MCA-Senegal has full 
decision-making autonomy, including, inter alia, the ability, without 
consultation with, or the consent or approval of, any other party, to 
(i) enter into contracts in its own name, (ii) sue and be sued, (iii) 
establish an account in a financial institution in the name of MCA-
Senegal and hold MCC Funding in that account, (iv) expend MCC Funding, 
(v) engage one or more fiscal agents who will act on behalf of MCA-
Senegal on terms acceptable to MCC, (vi) engage one or more procurement 
agents who

[[Page 54363]]

will act on behalf of MCA-Senegal, on terms acceptable to MCC, to 
manage the acquisition of the goods, works, and services required by 
MCA-Senegal to implement the activities funded by this Compact, and 
(vii) competitively engage one or more auditors to conduct audits of 
its accounts. In accordance with Section 3.2(d) of this Compact, MFG-
MCA, established by D[eacute]cret N[ordm] 2008-53 dated January 29, 
2008, will act on behalf of the Government with respect to the Compact 
and the Program until MCA-Senegal is established. For the avoidance of 
doubt, the Government will take all appropriate actions to ensure that 
MCA-Senegal is established as soon as possible after the ratification 
of this Compact, and, in any event, in accordance with the applicable 
condition precedent to the disbursement of Compact Implementation 
Funding set forth in Annex IV to this Compact.
    MCA-Senegal will be administered and managed by the following 
bodies: (1) Le Conseil de Surveillance, acting as its board of 
directors (the ``Board''); (2) la Direction G[eacute]n[eacute]rale, 
acting as its management unit (the ``Management Unit''); and (3) le 
Comit[eacute] des Parties Prenantes, acting as its stakeholders 
committee (the ``Stakeholders Committee''). The governance of MCA-
Senegal will be set forth in more detail in the Establishment Decree, 
the Program Implementation Agreement, and the internal regulations of 
MCA-Senegal (``MCA-Senegal Bylaws''), which will, collectively, set 
forth the responsibilities of the Board, the Management Unit, and the 
Stakeholders Committee. The MCA-Senegal Bylaws will be developed and 
adopted in accordance with MCC's Guidelines for Accountable Entities 
and Implementation Structures, published on the MCC Web site (the 
``Governance Guidelines''), and will be in form and substance 
satisfactory to MCC.
    (i) Board (le Conseil de Surveillance).
    (1) Composition. MCA-Senegal will be governed by the Board, which 
will consist of voting members representing those Government ministries 
and civil society and private sector organizations set forth in the 
Establishment Decree. The Board will also consist of those non-voting 
observers set forth in the Establishment Decree. All voting members 
will be named in writing by their respective Government ministries and 
civil society and private sector organizations, as applicable, and must 
be sufficiently senior and qualified to make decisions on behalf of 
their respective ministries and civil society and private sector 
organizations, as applicable. Each voting member named to serve on the 
Board, and any replacement for any voting member or any alteration of 
the size or composition of the Board, shall be subject to MCC prior 
approval.
    (ii) Roles and Responsibilities. The Board will be responsible for 
overseeing the implementation of the Program and will have final 
decision-making authority over the implementation of the Program. The 
Board will meet regularly; the frequency of meetings will be set forth 
in the MCA-Senegal Bylaws and will be in accordance with the Governance 
Guidelines. The specific roles of the voting members and non-voting 
observers will be set forth in the Establishment Decree and the MCA-
Senegal Bylaws.
    (iii) Management Unit (la Direction G[eacute]n[eacute]rale).
    (1) Composition. The Management Unit, which will be led by a 
competitively selected Director General, will be composed of 
competitively recruited Directors with expertise in the key components 
of the Program, including, without limitation, a Roads Director, an 
Irrigation and Water Resources Management Director, and a Land Tenure 
Security Director, as well as a Deputy Director General, a Chief 
Financial Officer, a General Counsel, and other key Directors, 
including, without limitation, an Environmental and Social Assessment 
Director, a Procurement Director, a Monitoring and Evaluation Director, 
and a Communications Director. The Management Unit will also include 
such other managers and officers as may be agreed by the Government and 
MCC, including, without limitation, an internal auditor and a Human 
Resources Officer. The Directors will be supported by appropriate 
additional staff to enable the Management Unit to execute its roles and 
responsibilities.
    (iv) Roles and Responsibilities. The Management Unit will be based 
in Dakar, Senegal, and will be responsible for managing the day-to-day 
implementation of the Program, with oversight from the Board. The 
Management Unit will serve as the principal link between MCC and the 
Government, and will be accountable for the successful execution of the 
Program, each Project, and each Activity. As a Government entity, MCA-
Senegal will be subject to Government audit requirements. As a 
recipient of MCC Funding, MCA-Senegal will also be subject to MCC audit 
requirements.
    (v) Stakeholders' Committee (le Comit[eacute] des Parties 
Prenantes).
    (1) Composition. Pursuant to the Establishment Decree, the 
composition of the Stakeholders Committee will be determined by the 
Board in accordance with the Governance Guidelines and subject to MCC 
approval. Without limiting the foregoing, the Establishment Decree 
provides that the Stakeholders Committee will be composed of, inter 
alia, Program beneficiaries, regional and local government 
representatives, entities with an interest or involvement in the 
implementation of the Program, key NGOs, and any applicable civil 
society and private sector representatives. In addition, the Board may 
establish regional, informal stakeholders committees in the project 
intervention zones composed of, inter alia, Program beneficiaries, 
regional and local government representatives, entities with an 
interest or involvement in the implementation of the Program, key NGOs, 
and any applicable civil society and private sector representatives. 
The establishment and composition of any such regional, informal 
stakeholders committees will also be subject to MCC approval.
    (2) Roles and Responsibilities. Consistent with the Governance 
Guidelines, the Stakeholders Committee (and any informal, regional 
stakeholders committees established by the Board) will be responsible 
for continuing the consultative process throughout implementation of 
the Program. While the Stakeholders Committee (and any informal, 
regional stakeholders committees established by the Board) will not 
have any decision-making authority, it will be responsible for, inter 
alia, reviewing, at the request of the Board or the Management Unit, 
certain reports, agreements, and documents related to the 
implementation of the Program in order to provide advice and input to 
MCA-Senegal regarding the implementation of the Program.
    (d) The ``Cellule d'Appui au MCA-S[eacute]n[eacute]gal.''
    As referenced in Article 8 of the Compact, the Government will 
contribute to the Program, inter alia, through the establishment of and 
financial support for a ``Cellule d'Appui au MCA-
S[eacute]n[eacute]gal'' (the ``Cellule''). Exclusively Government-
funded and exclusively Government-run, the Cellule's focus would be 
distinct from, but related to, the Program. The Cellule will contain 
staff to perform certain functions, which may include, but are not 
limited to, the following:
    (i) Guichet Unique. Certain Cellule staff will be engaged to assist 
MCA-Senegal and contractors working on the Program with navigating the 
tax exemption procedures to ensure that they benefit from the tax 
exemptions provided by the Compact.

[[Page 54364]]

    (ii) Administration and Finance. Certain Cellule staff will be 
engaged to perform administration and finance functions with respect to 
the Cellule's operations, any mesures d'accompagnement described in 
paragraph b above, the start up or closure of MCA-Senegal, and any 
Government financial obligations arising out of the Compact, including, 
but not limited to, Sections 2.6(a) or 8.1 of the Compact.
    (iii) Monitoring Eligibility Criteria. Certain Cellule staff will 
be engaged to monitor and evaluate Senegal's level of performance under 
the policy criteria identified in Section 607 of the MCA Act, and the 
selection criteria and methodology used by MCC.
    (iv) Mesures d'Accompagnement. To the extent the Government 
undertakes certain social development activities outside of the Program 
in the Project areas (such activities may be designed to, inter alia, 
diversify current livelihood strategies, slow emigration from the 
Delta, link Podor to markets, and improve the ability of women and 
youth to take advantage of the economic opportunities presented by an 
improved environment for agricultural production), the Cellule may 
contain staff to manage the implementation of such social development 
activities.
    (e) Implementing Entities.
    Subject to the terms and conditions of this Compact and any other 
related agreements entered into in connection with this Compact, the 
Government and MCC have identified certain principal public 
institutions that may or will serve as implementing entities (each, an 
``Implementing Entity'') to implement and carry out certain Projects 
and/or Activities (and/or any component thereof) in furtherance of this 
Compact. Such Implementing Entities include, but are not limited to, 
(i) AATR, for the Roads Rehabilitation Project and (ii) SAED, for the 
Irrigation and Water Resources Management Project. The Government will 
ensure that the roles and responsibilities of each Implementing Entity 
and other appropriate terms are set forth in an agreement between MCA-
Senegal and each Implementing Entity, which agreement must be in form 
and substance satisfactory to MCC (each an ``Implementing Entity 
Agreement'').
    (f) Fiscal Agent.
    Unless MCC otherwise agrees in writing, the Government will engage 
a fiscal agent (a ``Fiscal Agent''), who will be responsible for 
assisting the Government with its fiscal management and assure 
appropriate fiscal accountability of MCC Funding, and whose duties will 
include those set forth in the Program Implementation Agreement.
    (g) Procurement Agent.
    Unless MCC otherwise agrees in writing, the Government will engage 
one or more procurement agents (each, a ``Procurement Agent'') to carry 
out and certify specified procurement activities in furtherance of this 
Compact. The roles and responsibilities of each Procurement Agent will 
be set forth in the Program Implementation Agreement or such agreement 
as the Government enters into with each Procurement Agent, which 
agreement shall be in form and substance satisfactory to MCC. Each 
Procurement Agent will adhere to the procurement standards set forth in 
the MCC Program Procurement Guidelines and ensure procurements are 
consistent with the procurement plan adopted by the Government pursuant 
to the Program Implementation Agreement, unless MCC otherwise agrees in 
writing.

Schedule 1 of Annex I Delta Activity Construction Activities

    The work on the main irrigation channels of the Delta Activity 
consists of weed removal, dredging, profiling of berms, and increasing 
levee heights, as well as the rehabilitation or replacement of the 
associated structures and pumping stations of the following sections:

----------------------------------------------------------------------------------------------------------------
         Irrigation section           Length/targeted flow rate               Associated improvements
----------------------------------------------------------------------------------------------------------------
Gorom Amont........................  25 km/30 m3s-1.............  Ronkh Intake: increase of gravity flow
                                                                   capacity from 20m3s-1 to 30m3s-1 by reopening
                                                                   two additional gates and increase of pumping
                                                                   capacity from 8.3m3s-1 to 20m3s-1.
Gorom Aval.........................  22 km/23 m3s-1.............  Intake G: construction of an additional
                                                                   control bridge with four gates to increase
                                                                   the gravity flow capacity from 20m3s-1 to
                                                                   40m3s-1; Rehabilitation of the Boundoum Dam
                                                                   Bridge.
Lampsar Amont......................  20 km......................  Replacement of the Boundoum Bridge with a
                                                                   control bridge.
Lampsar Aval.......................  24 km/12 m3s-1.............  Replacement of the Lampsar Bas Bridge with a
                                                                   control bridge; Repairs on the Bango Bridge.
Ngalam.............................  8 km.......................  Rehabilitation of the Ndiaoudoun Bridge.
Djawel.............................  4 km.......................  Rehabilitation of the Djawel Bridge.
Kassack............................  20 km......................  Rehabilitation of the Demba and Diambar
                                                                   Bridges.
Djeuss.............................  ...........................  Partial transformation into a main drainage
                                                                   channel.
----------------------------------------------------------------------------------------------------------------

Schedule 2 to Annex I Form of MCA-Senegal Decree

Republic of Senegal

One People--One Goal--One Faith
    Order No. * * * establishing the Millennium Challenge Account 
Senegal (hereinafter, ``MCA-Senegal'').
    The President of the Republic,
    Having regard to Constitution of the Republic of Senegal 
(hereinafter, ``Senegal''), and in particular articles 43 and 76 
thereof;
    Having regard to the Millennium Challenge Compact (hereinafter, the 
``Compact'') signed on [insert signature and date] between the Republic 
of Senegal (hereinafter ``Senegal''), acting through its government 
(hereinafter, the ``Government'') and the government of the United 
States of America, acting through the Millennium Challenge Corporation 
(hereinafter, ``MCC);
    Having regard to Law No. [insert number and date] whereby the 
National Assembly authorized the President of Senegal to ratify the 
Compact;
    Having regard to Letter No. [insert number and date] whereby the 
President ratified the Compact;
    Having regard to Order No. 2008-53 of January 29, 2008 establishing 
the Mission to Develop and Manage the Millennium Challenge Account 
Senegal;
    Whereas the Compact establishes the general terms and conditions 
under which MCC offers to grant an amount not to exceed [insert amount 
in words and figures] to the Government for a program to reduce poverty 
in Senegal through economic growth (hereinafter, the ``Program'');
    Considering the Government's commitment established in the Compact 
(Annex I: Program description) to establish a separate legal entity 
with financial autonomy to coordinate and execute the Program;

[[Page 54365]]

Orders

Article 1: Establishment; Legal Capacity

    An autonomous entity, ``MCA-Senegal'' is hereby established as a 
juristic person with financial autonomy to assume responsibility for 
managing the Program for Senegal. MCA-Senegal shall be a unit within 
the Office of the Prime Minister. MCA-Senegal shall have full legal 
capacity and financial autonomy, including, inter alia, the ability to 
enter into contracts and agreements; to open, maintain and close bank 
accounts; to recruit personnel through competitive processes and 
terminate them; and to appear as a party to legal proceedings.

Article 2: Responsibilities of MCA-Senegal

    MCA-Senegal shall:
    <bullet> Assume responsibility, on behalf of the Government, for 
overseeing the activities associated with management and implementation 
of the Program;
    <bullet> Represent the Government, in consultation with the 
responsible Government agencies, in negotiations with MCC regarding 
technical, financial and administrative issues relating to the Compact;
    <bullet> Execute legal instruments on behalf of the Government in 
its relationships with stakeholders or other persons involved in 
managing, monitoring and implementing the Program for the Government.

Article 3: MCA-Senegal Management Bodies

    In performing its functions, MCA-Senegal shall be supported by a 
deliberative body, an executive body and an advisory body:
    <bullet> The Supervisory Board shall serve as the deliberative 
body,
    <bullet> The Management Unit (direction g[eacute]n[eacute]rale) 
shall serve as the executive body,
    <bullet> The Stakeholders Committee shall serve as the advisory 
body.
    No member of the Supervisory Board, the Management Unit or the 
Stakeholders Committee or other representative of MCA-Senegal shall 
have a direct or indirect conflict of interest with the performance of 
the functions for which MCA-Senegal is responsible.

Article 4: Powers of the Supervisory Board

    The MCA-Senegal Supervisory Board shall have the broadest powers to 
act in all circumstances and make decisions concerning the objectives, 
policies, administration and oversight of the Management Unit's 
operations.
    To this end, the Supervisory Board shall:
    <bullet> Determine the strategic objectives of the Program,
    <bullet> Approve the administrative organization of MCA-Senegal,
    <bullet> Approve any decision to dissolve MCA-Senegal or modify its 
structure,
    <bullet> Adopt the MCA-Senegal annual activity report prepared by 
the Executive Director,
    <bullet> Approve the MCA-Senegal annual budget,
    <bullet> Approve the financial statements prepared by the Executive 
Director within three months after the close of the fiscal year,
    <bullet> Recruit the Executive Director,
    <bullet> Approve the Executive Director's contract, the Management 
Unit organization chart and the form of employment contract for key 
personnel,
    <bullet> Terminate the Executive Director and approve the 
termination of executive or key personnel of MCA-Senegal,
    <bullet> Approve plans to award contracts, and
    <bullet> Perform all other tasks prescribed by MCC directives or 
the internal regulations of the Supervisory Board.
    The decisions of the Supervisory Board shall be subject to MCC's no 
objection.

Article 5: Composition of the Supervisory Board

    The Supervisory Board shall be composed of the following members 
with voting rights (individually a ``Member''):
    <bullet> A representative of the Prime Minister,
    <bullet> A representative of the Minister of Foreign Affairs,
    <bullet> A representative of the Minister of Economy and Finance,
    <bullet> A representative of the Minister of Infrastructure,
    <bullet> A representative of the Minister of the Environment,
    <bullet> A representative of the Minister of Decentralization and 
Local Authorities,
    <bullet> A representative of the Minister of Justice,
    <bullet> A representative of the Minister of Agriculture,
    <bullet> A representative of the Minister of Social Development and 
Gender,
    <bullet> Two representatives from the most representative employer 
organizations,
    <bullet> Two representatives from the most representative society 
organizations, including one woman.
    Each Member shall have one vote.
    The following individuals shall serve in an advisory capacity on 
the Supervisory Board as nonvoting permanent observers:
    <bullet> A representative of MCC,
    <bullet> The Executive Director of MCA-Senegal.
    The Supervisory Board Members representing the Government shall be 
designated in writing by their respective ministers. They shall have 
the authority and powers to represent their ministries and make all 
decisions during Supervisory Board meetings. The term of office of a 
Member representing the Government shall expire with that of the 
minister concerned or following the respective minister's written 
decision to replace the Member.
    The Members representing civil society and employer organizations 
shall be designated in writing by their organization's deliberative 
body. The Members representing civil society and employer organizations 
shall have all powers in the context of their mission to act on behalf 
of their organization. The term of office of a Member representing a 
civil society or employer organization shall expire following the 
written decision of the respective organization's deliberative body to 
replace the Member.
    The terms of Supervisory Board members shall commence upon their 
appointment.
    MCC's no objection shall be required for any proposal or 
modification of the Supervisory Board's composition.

Article 6: Supervisory Board Operations

    The Supervisory Board shall meet as often as required and at least 
once each quarter. It shall be convened by a representative of the 
Office of the Prime Minister or at the request of at least four (4) 
Members. The rules governing the procedures for convening meetings, 
establishing a quorum and adopting decisions shall be established by 
the internal regulations.
    The Executive Director of MCA-Senegal shall serve as secretary of 
the Supervisory Board.
    The Members of the Supervisory Board shall receive no remuneration. 
However, each Member of the Supervisory Board shall be entitled to 
reimbursement of reasonable expenses incurred in connection with 
attendance at Supervisory Board meetings, in accordance with MCC 
directives.
    The Supervisory Board may decide to retain the services of experts 
and specialists to assist it in performing its functions. Such experts 
and specialists shall participate in Supervisory Board meetings in an 
advisory capacity.
    The Supervisory Board may, if necessary, establish committees 
formed of Members and/or observers to which it may delegate tasks 
related to its functions.

[[Page 54366]]

Article 7: Stakeholders Committee

    The Stakeholders Committee shall be an advisory body responsible 
for monitoring projects and providing technical assistance to the 
Management Unit and Supervisory Board, to which it may also provide 
opinions.
    The Stakeholders Committee shall consist of the project 
beneficiaries, the entities involved in or having an interest in 
Program execution, and representatives from the Government, employer 
organizations and civil society.
    The members of the Stakeholders Committee representing the 
Government shall be appointed by their respective ministries, and the 
members representing employer and civil society organizations by their 
respective organizations.
    The Supervisory Board shall designate the members of the 
Stakeholders Committee and determine its composition and operating 
procedures.
    The Supervisory Board may decide to establish local stakeholder 
subcommittees in the Program's area of influence. The members of such 
subcommittees shall be designated under the same terms and conditions 
as the national Stakeholders Committee.

Article 8: Management Unit

    MCA-Senegal shall be managed by a Management Unit headed by an 
Executive Director. The Executive Director shall be recruited by the 
Supervisory Board in accordance with MCC directives.
    The process of recruiting members of the Management Unit personnel 
shall be subject to MCC's no objection.
    The key personnel of MCA-Senegal shall be recruited or terminated 
by the Executive Director in accordance with MCC directives and subject 
to the Supervisory Board's approval.
    The Executive Director shall provide day-to-day oversight and 
supervision of MCA-Senegal's operations and shall serve as the 
Additional Representative within the meaning of the Compact. He shall 
prepare the work of the Supervisory Board and implement the policies it 
establishes.
    The duties of the Executive Director shall include:
    <bullet> Exercising administrative and management authority over 
all personnel and departments of MCA-Senegal,
    <bullet> Reporting to interested parties, including the Supervisory 
Board and the Stakeholders Committee, on progress in implementing the 
Program,
    <bullet> Preparing and executing the MCA-Senegal budget in 
accordance with the provisions of article 9,
    <bullet> Preparing an annual activity report and submitting it to 
the Supervisory Board for approval,
    <bullet> Preparing the financial statements and submitting them to 
the Supervisory Board for approval,
    <bullet> Performing all other tasks prescribed by MCC directives or 
the Supervisory Board.

Article 9: MCA-Senegal Budget

    MCA-Senegal shall have a budget outlining its receipts and 
expenditures.
    MCA-Senegal's receipts shall consist of the budget appropriation 
provided in the Compact. MCA-Senegal's funding shall also consist of an 
annual budget appropriation from the Government as provided by the 
Compact and related agreements, which shall be managed by the MCA-
Senegal Support Unit (Cellule d'Appui) provided in the Compact.
    All MCA-Senegal funding, whether provided under the Compact or by 
the Government, shall be used exclusively to fulfill the 
responsibilities of MCA-Senegal as described in article 2.
    In accordance with article 8, the budget shall be prepared and 
executed by the Executive Director under the supervision of the 
Supervisory Board.

Article 10: Audit and Oversight

    MCA-Senegal shall be subject to audits by the Inspector General of 
Finance, the Auditor General (Inspection G[eacute]n[eacute]rale d'Etat) 
and the Court of Auditors (Cour des Comptes) as provided, inter alia, 
by Law No. 90-07 June 26, 1990. As provided by the Compact and related 
agreements and MCC directives, it shall also be subject to audits by 
independent firms, MCC, the Inspector General of the United States 
Agency for International Development, and the United States Government 
Accountability Office.

Article 11: Effects of the Order

    This order repeals Order No. 2008-53 of January 29, 2008 
establishing the Mission to Develop and Manage the Millennium Challenge 
Account Senegal (hereinafter, ``MFG-MCA''). The Government of Senegal 
shall replace the MFG-MCA in the exercise of its rights and the 
performance of its legal and contractual obligations, including 
employer and tax obligations and monies payable by MFG-MCA to service 
providers; however, provided it expressly indicates its intent to do 
so, MCA-Senegal may: (1) Receive the benefit of services performed for 
MFG-MCA and exercise the rights attached to those powers (without 
assuming any obligations); or (2) assume the obligations and rights 
that had been performed for the benefit of MG-MCA.

Article 12: Transitory Provisions

    Without prejudice to the other provisions of this order, the 
Supervisory Board shall meet either at the request of at least four 
Members or at the initiative of the Prime Minister or his 
representative until the internal regulations of the Supervisory Board 
are adopted.
    The meetings of the Supervisory Board shall be convened by the 
Prime Minister or his representative, who shall chair the meetings.
    The Supervisory Board shall have a quorum if one-half of its 
Members are present or represented. The decisions of the Supervisory 
Board, other than the decision to adopt the internal regulations, shall 
be adopted by an absolute majority of the Members present or 
represented. An absolute majority of the Supervisory Board Members 
shall be required to adopt the internal regulations or written 
decisions.

Article 13: Execution of the Order

    The Prime Minister, the Minister of Foreign Affairs; the Minister 
of Economy and Finance; the Minister of the Interior; the Minister of 
the Environment and Protection of Nature, Retention Basins and 
Artificial Lakes; the Minister of Infrastructure and National Planning; 
the Minister of Decentralization and Local Authorities; the Minister of 
Justice; the Minister of Social Development and Gender; each with 
respect to his or her ministry, shall be responsible for executing this 
order, which shall be published in the Official Journal.\1\
---------------------------------------------------------------------------

    \1\ The exact titles to be confirmed.

---------------------------------------------------------------------------
Executed at Dakar, this----------

    By the President of the Republic
    Abdoulaye Wade
    The Prime Minister

Annex II Multi-Year Financial Plan Summary

    This Annex II summarizes the Multi-Year Financial Plan for the 
Program.

1. General

    A multi-year financial plan summary (``Multi-Year Financial Plan 
Summary'') is attached hereto as Exhibit A. By such time as specified 
in the PIA, the Government will adopt, subject to MCC approval, a 
Multi-Year Financial Plan that includes, in addition to the multi-year 
summary of estimated MCC Funding and the Government's contribution of 
funds and resources, the

[[Page 54367]]

annual and quarterly funding requirements for the Program (including 
administrative costs) and for each project, projected both on a 
commitment and cash requirement basis.

                                                      Exhibit A--Multi-Year Financial Plan Summary
                                                            [Multi-year financial plan (US$)]
--------------------------------------------------------------------------------------------------------------------------------------------------------
                           Project                                 CIF         Year 1       Year 2       Year 3       Year 4       Year 5       Total
--------------------------------------------------------------------------------------------------------------------------------------------------------
1. Irrigation & Water Resources Management Project:..........
    Infrastructure Activity
    Land Tenure Security Activity
    Social Safeguard Measures
        Sub-Total............................................            0   19,812,280   69,915,184   63,538,624   16,667,272       75,500  170,008,860
2. Roads Rehabilitation Project:
    National Road <greek-i>2
    National Road <greek-i>6
        Sub-Total............................................            0   48,695,302  101,844,436   95,320,317   56,859,947   21,342,497  324,062,499
3. Monitoring and Evaluation (M&E):
    Monitoring and Evaluation
        Sub-Total............................................            0      571,500      771,500      546,500      671,500    1,196,500    3,757,500
4. Program Administration and Audit \1\:
    MCA-Senegal
    Fiscal Agent/Procurement Agent
    Audit
        Sub-Total............................................    5,000,000    7,248,022    7,324,764    7,403,964    7,383,539    7,810,852   42,171,141
                                                              ------------------------------------------------------------------------------------------
            Grand Total......................................    5,000,000   76,327,104  179,855,884  166,809,405   81,582,258   30,425,349  540,000,000
--------------------------------------------------------------------------------------------------------------------------------------------------------
\1\ These amounts do not include any costs required to be borne by the Government pursuant to the Compact, including, but not limited to Sections 2.6(a)
  and Section 8.1 of the Compact.

Annex III Description of the Monitoring and Evaluation Plan

    This Annex III (this ``M&E Annex'') generally describes the 
components of the Monitoring and Evaluation Plan (``M&E Plan'') for the 
Program. The actual content and form of the M&E Plan will be agreed to 
by MCC and the Government, and may be modified from time to time 
without requiring an amendment to this Annex III.

1. Overview

    MCC and the Government will formulate, agree to and the Government 
will implement, or cause to be implemented, an M&E Plan that specifies 
(a) how progress toward the Compact Goal, Program Objective and Project 
Objectives will be monitored, (``Monitoring Component''), (b) a process 
and timeline for the monitoring of planned, ongoing, or completed 
Project Activities to determine their efficiency and effectiveness, and 
(c) a methodology for assessment and rigorous evaluation of the 
outcomes and impact of the Program (``Evaluation Component''). 
Information regarding the Program's performance, including the M&E 
Plan, and any amendments or modifications thereto, as well as progress 
and other reports, will be made publicly available on the Web site of 
MCA-Senegal and elsewhere.

2. Program Logic

    The M&E Plan will be built on a logic model which illustrates how 
the Program, Projects and Activities contribute to poverty reduction 
and economic growth in Senegal. In sum, the goal of the Program is to 
contribute to economic growth and poverty reduction by: (a) increasing 
household and firm incomes through increased irrigated agricultural 
production and productivity on irrigated perimeters; and (b) increasing 
household and firm access to domestic and international markets through 
improved road quality and reduced travel times and costs.

3. Monitoring Component

    To monitor progress toward the achievement of the impact and 
outcomes, the Monitoring Component of the M&E Plan will identify (a) 
the Indicators (as defined below), (b) the definitions of the 
Indicators, (c) the sources and methods for data collection, (d) the 
frequency for data collection, (e) the party or parties responsible, 
and (f) the timeline for reporting on each Indicator to MCC.
    Further, the Monitoring Component will track changes in the 
selected Indicators for measuring progress towards the achievement of 
the objectives during the Compact Term. Before the initiation of 
implementation activities for each Project, MCA-Senegal will collect 
baseline data on the selected Indicators or verify already collected 
baseline data.
    (a) Indicators. The M&E Plan will measure the results of the 
Program using quantitative, objective and reliable data 
(``Indicators''). Each Indicator will have benchmarks that specify the 
expected value and the expected time by which that result will be 
achieved (``Target''). The M&E Plan will be based on a logical 
framework approach that classifies Indicators as goal, outcome, output, 
and process milestones. The Compact Goal Indicators (``Goal 
Indicators'') will measure the general contribution of the Projects to 
the national economic growth and poverty reduction. Second, the Project 
Objective and outcome Indicators (``Project Objective and Outcome 
Indicators'') will measure the final result of each Project. Third, 
output Indicators and process milestones (``Activity Indicators'') will 
measure the early and intermediate results of the Project Activities. 
For each Project Objective and Outcome Indicator and each Activity 
Indicator, the M&E Plan will define a strategy for obtaining and 
verifying the value of such Indicator prior to undertaking any activity 
that affects the value of such Indicator (such value, a ``Baseline''). 
All Indicators will be disaggregated by gender, income level and age, 
and beneficiary types to the extent practicable. Subject to prior 
written approval from MCC, MCA-Senegal may add Indicators or refine the

[[Page 54368]]

definitions and Targets of existing Indicators.
    (i) Goal. The M&E Plan will contain the Goal Indicators listed 
below specifying the definition, baseline, and end of Compact Target 
for each. The economic analysis estimates that:
    <bullet> Over a 20-year period, the Irrigation and Water Resources 
Management Project is expected to contribute to an average increase in 
net revenue of 35% among beneficiaries.
    <bullet> Over a 20-year period, benefits of the RN2 Road Activity 
are expected to be comparable to an average increase of 13 percent of 
annual consumption among the catchment area population (5 kilometers on 
either side of the road).\2\
---------------------------------------------------------------------------

    \2\ Note: some of the beneficiaries of the RN2 will overlap with 
those of the Irrigation and Water Resources Management Project.
---------------------------------------------------------------------------

    <bullet> Over a 20-year period, benefits of the RN6 Road Activity 
are expected to be comparable to an average increase of 9 percent of 
annual consumption among the catchment area population (5 kilometers on 
either side of the road).
    (ii) Project Objective and Outcome Indicators and Activity 
Indicators. The M&E Plan will contain Project Objective and Outcome 
Indicators, which will measure the two Projects and are listed below 
with their definitions, baselines and targets. Prior to the initiation 
of implementation of an Activity, MCC and MCA-Senegal will agree on a 
final set of Activity Indicators. The M&E Plan will contain these 
Indicators or will be amended to contain these Indicators.

               Irrigation and Water Resources Management Project Objective and Outcome Indicators
----------------------------------------------------------------------------------------------------------------
  Irrigation and water resources                                                             Baseline    Year 5
        management project                   Indicator                  Definition            value      target
----------------------------------------------------------------------------------------------------------------
Project Objective: Increased        Volumes of irrigated rice   Total quantity of rice         55,000    263,000
 irrigated agricultural production   production (Tons).          cultivated by year on the
 and productivity on newly                                       irrigated areas
 irrigated perimeters in the Delta                               (irrigation and dry
 and N'Gallenka.                                                 season).
                                    Agricultural cropping       Total number of hectares         0.95       1.50
                                     intensity.                  cultivated by year/Total
                                                                 irrigated area.
                                    Area of land under          Total number of hectares       11,800        \3\
                                     irrigation (hectares).      of land using irrigation                 39,740
                                                                 for agricultural
                                                                 production.
----------------------------------------------------------------------------------------------------------------
             Outcomes                        Indicator                  Definition           Baseline    Year 5
                                                                                              value      target
----------------------------------------------------------------------------------------------------------------
Increased efficiency of water       Efficiency of irrigation    Water flow over time in            13         65
 infrastructure for irrigated        infrastructure (m\3\/s).    the Lampsar canal.
 agriculture.
Improved land tenure management on  Percent of allocated        Total numbers of parcels            0   \5\ 100%
 irrigated perimeters.               parcels with ``titres       with land titles (i.e.,
                                     d'affectation'' \4\.        ``titres d'affectation'')/
                                                                 total numbers of parcels
                                                                 allocated.
                                    Percent of ``titres         Total numbers of                    0       100%
                                     d'affectation''             registered land titles
                                     registered at the CRs.      (i.e., ``titres
                                                                 d'affectation'')/total
                                                                 numbers of parcels
                                                                 allocated.
                                    Percent of new land         Total numbers of new                0        95%
                                     conflicts resolved.         conflicts resolved/total
                                                                 numbers of new conflicts
                                                                 registered.
----------------------------------------------------------------------------------------------------------------


                                              Roads Rehabilitation Project Objective and Outcome Indicators
--------------------------------------------------------------------------------------------------------------------------------------------------------
      National road <greek-i>2                Indicator                    Definition               Baseline value                Year 5 target
--------------------------------------------------------------------------------------------------------------------------------------------------------
Activity Objective: Increased        Average Annual Daily         Total number of vehicles on  RichardToll-Ndioum: 870  RichardToll-Ndioum: 1240.
 access to domestic and               Traffic.                     rehabilitated road.
 international markets.
                                     Transport times............  Travel time saved due to     TBD \6\................  50% reduction.
                                                                   improved conditions on
                                                                   rehabilitated road.
--------------------------------------------------------------------------------------------------------------------------------------------------------
              Outcomes                        Indicator                    Definition               Baseline value                Year 5 target
--------------------------------------------------------------------------------------------------------------------------------------------------------
Improved road quality..............  International Roughness      Measurement of pavement      RichardToll-Ndioum: 8.4  RichardToll-Ndioum: 2.4.
                                      Index (proxy for vehicle     roughness on rehabilitated
                                      operating costs).            road.
Extended road network..............  Kms of road rehabilitated..  Total number of kilometers   0......................  120 km.
                                                                   of road rehabilitated.
--------------------------------------------------------------------------------------------------------------------------------------------------------
      National road <greek-i>6                Indicator                    Definition               Baseline value                Year 5 target
--------------------------------------------------------------------------------------------------------------------------------------------------------
Activity Objective: Increased        Average Annual Daily         Total number of vehicles on  Ziguinchor-Tanaf: 540..  Ziguinchor-Tanaf: 680.
 access to domestic and               Traffic.                     rehabilitated road.         Tanaf-Kolda: 820.......  Tanaf-Kolda: 1490
 international markets.                                                                        Kolda-Kounkane: 1200...  Kolda-Kounkane: 1850.

[[Page 54369]]

 
                                     Transport times............  Travel time saved due to     TBD....................  50% reduction.
                                                                   improved conditions on
                                                                   rehabilitated road.
--------------------------------------------------------------------------------------------------------------------------------------------------------
              Outcomes                        Indicator                    Definition               Baseline value                Year 5 target
--------------------------------------------------------------------------------------------------------------------------------------------------------
Improved road quality..............  International Roughness      Measurement of pavement      15.....................  2.5.
                                      Index (IRI) (proxy for       roughness on rehabilitated
                                      vehicle operating costs).    road.
Extended road network..............  Kms of road rehabilitated..  Total number of kilometers   0......................  260 km \7\.
                                                                   of road rehabilitated.
--------------------------------------------------------------------------------------------------------------------------------------------------------

     (b) Data Collection and Reporting. The M&E Plan will establish 
guidelines for data collection and reporting, and identify the 
responsible parties. Compliance with data collection and reporting 
timelines will be conditions for Disbursements for the relevant Project 
Activities as set forth in the Program Implementation Agreement. The 
M&E Plan will specify the data collection methodologies, procedures, 
and analysis required for reporting on results at all levels. The M&E 
Plan will describe any interim MCC approvals for data collection, 
analysis, and reporting plans.
---------------------------------------------------------------------------

    \3\ Incremental increase of 19,490 hectares rehabilitated and 
8,000 hectares in extension in the Delta region, and 440 hectares in 
extension in N'Gallenka. All hectares are expected to be formalized 
under the land tenure security activity.
    \4\ See the Land Tenure Security Activity section of this 
document for definitions of French terms.
    \5\ The total number of parcels to be allocated and registered 
will be determined by the land allocation criteria.
    \6\ Baseline values for travel times will be available with 
final results of the ongoing studies.
    \7\ Final value to be confirmed.
---------------------------------------------------------------------------

    (c) Data Quality Reviews. As determined in the M&E Plan or as 
otherwise requested by MCC, the quality of the data gathered through 
the M&E Plan will be reviewed to ensure that data reported are as 
valid, reliable, and timely as resources will allow. The objective of 
any data quality review will be to verify the quality and the 
consistency of performance data across different implementation units 
and reporting institutions. Such data quality reviews also will serve 
to identify where those levels of quality are not possible, given the 
realities of data collection.
    (d) Management Information System. The M&E Plan will describe the 
information system that will be used to collect data, store, process 
and deliver information to relevant stakeholders in such a way that the 
Program information collected and verified pursuant to the M&E Plan is 
at all times accessible and useful to those who wish to use it. The 
system development will take into consideration the requirement and 
data needs of the components of the Program, and will be aligned with 
MCC existing systems, other service providers, and ministries.
    (e) Role of MCA-Senegal. The monitoring and evaluation of this 
Compact spans across two discrete Projects and will involve a variety 
of governmental, non-governmental, and private sector institutions. 
MCA-Senegal holds full responsibility for implementation of the M&E 
Plan. MCA-Senegal will oversee all Compact-related monitoring and 
evaluation activities conducted for each of the Projects, ensuring that 
data from all implementing entities is consistent, accurately reported 
and aggregated into regular Compact performance reports as described in 
the M&E Plan.

4. Evaluation Component

    The Evaluation Component of the M&E Plan will contain three types 
of evaluations: Impact Evaluations, Project Performance Evaluations, 
and Special Studies. Plans for each type of evaluation will be 
finalized before any Disbursement for specific Program or Project 
activities. The Evaluation Component of the M&E Plan will describe the 
purpose of the evaluation, methodology, timeline, required MCC 
approvals, and the process for collection and analysis of data for each 
evaluation. The results of all evaluations will be made publicly 
available in accordance with MCC's guidelines for monitoring and 
evaluation plans posted from time to time on the MCC Web site (the 
``MCC Policy for Monitoring and Evaluation of Compacts and Threshold 
Programs'').
    (a) Impact Evaluation. The M&E Plan will include a description of 
the methods to be used for impact evaluations and plans for integrating 
the evaluation method into Project design. Based on in-country 
consultation with stakeholders, the strategies outlined below were 
jointly determined as having the strongest potential for rigorous 
impact evaluation. The M&E Plan will further outline in detail these 
methodologies. Final impact evaluation strategies are to be jointly 
determined before the approval of the M&E Plan. The following is a 
summary of the potential impact evaluation methodologies:
    (i) Irrigation and Water Resources Management Project.
    An impact evaluation will be conducted to estimate the causal 
relationship between the project and its objective of increasing 
agricultural production and productivity; as well as its long-term goal 
of increasing household and firms' incomes. The evaluation will likely 
use a difference-in-difference methodology comparing three geographic 
zones: (1) Areas expected to benefit from the irrigation systems 
rehabilitation under the project, (2) areas that will benefit from 
irrigation systems extension, and (3) a comparison area that is not 
covered by the Compact. Surveys conducted in all three areas before and 
after the project will allow rigorous analysis to estimate the 
project's incremental contribution to the targeted objectives and 
goals.
    (ii) Roads Rehabilitation Project.
    Similarly, a difference-in-difference methodology will be used to 
estimate the causal relationship between road rehabilitation and 
increased economic activity. Surveys will be conducted before and after 
road rehabilitation in two zones: (1) one area within five kilometers 
of each side of the road \8\; (2) one area outside of the five 
kilometer corridor. Analyzing conditions among the two groups over two 
points in time will allow estimates of the project's incremental 
impact.
---------------------------------------------------------------------------

    \8\ The economic analysis used 5 kilometers on either side of 
the road as an estimated ``catchment area'' of beneficiaries.
---------------------------------------------------------------------------

    (b) Final Evaluation. The M&E Plan will make provision for Final 
Project level evaluations (``Final Evaluations''). With the prior 
written approval of MCC, MCA-Senegal (or MCC independently) will engage 
independent evaluators to

[[Page 54370]]

design the Final Evaluations to be conducted at the end of each 
Project. The Final Evaluations will review progress during Compact 
implementation and provide a qualitative context for interpreting 
monitoring data. They must at a minimum (i) evaluate the efficiency and 
effectiveness of the Project Activities; (ii) determine if and analyze 
the reasons why the Compact Goal, Program Objective and Project 
Objective(s) were or were not achieved; (iii) identify positive and 
negative unintended results of the Program; (iv) provide lessons 
learned that may be applied to similar projects; and (v) assess the 
likelihood that results will be sustained over time.
    (i) Special Studies. The M&E Plan will include a description of the 
methods to be used for special studies funded through this Compact or 
by MCC. Plans for conducting the special studies will be determined 
jointly between MCA-Senegal and MCC before the approval of the M&E 
Plan. The M&E Plan will identify and make provision for any other 
special studies, ad hoc evaluations, and research that may be needed as 
part of the monitoring and evaluating of this Compact. Either MCC or 
MCA-Senegal may request special studies or ad hoc evaluations of 
Projects, Project Activities, or the Program as a whole prior to the 
expiration of the Compact Term. When MCA-Senegal engages an evaluator, 
the evaluator will be externally contracted and independently source 
selected by MCA-Senegal. The aforementioned engagement will be subject 
to the prior written approval of MCC, following a tender in accordance 
with the MCC Program Procurement Guidelines, and in accordance with any 
relevant Implementation Letter or supplemental agreement. Contract 
terms must ensure non-biased results and the publication of results.
    (c) Request for Ad Hoc Evaluation or Special Study. If MCA-Senegal 
requires an ad hoc independent evaluation or special study at the 
request of the Government for any reason, including for the purpose of 
contesting an MCC determination with respect to a Project or Activity 
or to seek funding from other donors, no MCC Funding or MCA-Senegal 
resources may be applied to such evaluation or special study without 
MCC's prior written approval.

5. Other Components of the M&E Plan

    In addition to the Monitoring and Evaluation Components, the M&E 
Plan will include the following components for the Program, Projects 
and Project Activities, including, where appropriate, roles and 
responsibilities of the relevant parties and providers:
    (a) Costs. A detailed cost estimate for all components of the M&E 
Plan.
    (b) Assumptions and Risks. Any assumption or risk external to the 
Program that underlies the accomplishment of the Program Objective, 
Project Objectives and Activity outcomes. However, such assumptions and 
risks will not excuse any Party's performance unless otherwise 
expressly agreed to in writing by the Parties.

6. Implementation of the M&E Plan

    (a) Approval and Implementation. The approval and implementation of 
the M&E Plan, as amended from time to time, will be in accordance with 
this Annex III, the Program Implementation Agreement and any other 
relevant supplemental agreement, and the MCC Policy for Monitoring and 
Evaluation of Compacts and Threshold Programs.

Annex IV Conditions to Disbursement of Compact Implementation Funding

    This Annex IV sets forth the conditions precedent applicable to 
Disbursements of Compact Implementation Funding (each a ``CIF 
Disbursement''). Capitalized terms used in this Annex IV and not 
defined in this Annex IV or in the Compact have the meanings assigned 
to such terms in the form of Program Implementation Agreement attached 
to the Compact as Annex VII. Upon execution of the Program 
Implementation Agreement, each CIF Disbursement shall be subject to the 
terms and conditions of the Program Implementation Agreement 
(including, without limitation, Section 3.3 thereof).

1. Conditions to All CIF Disbursements (Including the Initial CIF 
Disbursement)

    Each of the following conditions precedent must have been met to 
MCC's satisfaction prior to each CIF Disbursement:
    (a) Delivery by MFG-MCA (or, upon its establishment, MCA-Senegal) 
to MCC of a complete, correct, and fully executed Disbursement Request 
for the relevant Disbursement Period, together with any applicable 
Periodic Reports covering such Disbursement Period, in each case in 
form and substance satisfactory to MCC and submitted in accordance with 
the Reporting Guidelines. Each Disbursement Request shall include the 
following reference number: GR09SEN09010.
    (b) MCC is satisfied, in its sole discretion, that: (i) Each 
activity being funded by such CIF Disbursement is necessary, advisable, 
or is otherwise consistent with the goal of facilitating the 
implementation of the Compact; (ii) there has been no violation of, and 
the use of the requested funds for the purposes requested will not 
violate, the limitations on the use or treatment of (x) MCC Funding, as 
set forth in this Compact, including under Section 2.7, or (y) Compact 
Implementation Funding; (iii) no material default or breach of any 
covenant, obligation, or responsibility of the Government or MFG-MCA 
(or, upon its establishment, MCA-Senegal) under this Compact, the 
Program Implementation Agreement, any supplemental agreement, or any 
Program Guidelines has occurred or is continuing; and (iv) any Taxes 
paid with MCC Funding through the date ninety (90) days prior to the 
start of the applicable Disbursement Period have been reimbursed by the 
Government in full in accordance with this Compact.
    (c) MCC is satisfied, in its sole discretion, that MFG-MCA (or, 
upon its establishment, MCA-Senegal) is sufficiently mobilized in order 
for MFG-MCA (or MCA-Senegal, as the case may be) to be able to fully 
perform its obligations and act on behalf of the Government.
    (d) MFG-MCA (or, upon its establishment, MCA-Senegal), shall have 
adopted a Procurement Plan, in form and substance satisfactory to MCC, 
with respect to the Compact Implementation Funding, and such 
Procurement Plan remains in full force and effect.
    (e) MFG-MCA (or, upon its establishment, MCA-Senegal), shall have 
adopted an Fiscal Accountability Plan, in form and substance 
satisfactory to MCC, and such Fiscal Accountability Plan remains in 
full force and effect.

2. Conditions to Specific CIF Disbursements (and Each CIF Disbursement 
Thereafter)

    Each of the following conditions precedent must have been met to 
MCC's satisfaction prior to the applicable CIF Disbursement:
    (a) Prior to any CIF Disbursement on or after January 1, 2010, MCA-
Senegal shall be fully formed and in good standing under the laws of 
Senegal.
    (b) Prior to any CIF Disbursement on or after January 1, 2010, the 
Fiscal Agent shall have been duly appointed, and MCA-Senegal shall have 
duly executed the Fiscal Agent Agreement, and such agreement shall be 
in full force and effect without modification, alteration, rescission, 
or suspension of any kind, unless otherwise agreed by MCC, and no 
material default has occurred or is continuing thereunder.

[[Page 54371]]

    (c) Prior to any CIF Disbursement on or after January 1, 2010, the 
Procurement Agent shall have been duly appointed, and MCA-Senegal shall 
have duly executed the Procurement Agent Agreement, and such agreement 
shall be in full force and effect without modification, alteration, 
rescission, or suspension of any kind, unless otherwise agreed by MCC, 
and no material default has occurred or is continuing thereunder.
    (d) Prior to any CIF Disbursement on or after January 1, 2010, the 
Bank shall have been duly appointed, and MCA-Senegal and the Fiscal 
Agent shall have duly executed the Bank Agreement, and such agreement 
shall be in full force and effect without modification, alteration, 
rescission, or suspension of any kind, unless otherwise agreed by MCC, 
and no material default has occurred or is continuing thereunder.
    (e) Prior to the deposit of any CIF Disbursement into any Permitted 
Account in accordance with an approved Disbursement Request, MCC shall 
have received satisfactory evidence of the establishment of such 
Permitted Account.

Annex V Definitions

    AATR has the meaning provided in paragraph 1(e) of Part B of Annex 
I.
    Additional Representative has the meaning provided in Section 4.2.
    Activity has the meaning provided in Part B of Annex I.
    Activity Indicators has the meaning provided in paragraph 3(a) of 
Annex III.
    AE has the meaning provided in Schedule A of Annex VI.
    AFD has the meaning provided in paragraph 2(d) of Part B of Annex 
I.
    Approval Documents has the meaning provided in Schedule B of Annex 
VI.
    Audit Guidelines has the meaning provided in Section 3.8(a).
    Baseline has the meaning provided in paragraph 3(a) of Annex III.
    Bilateral Agreement has the meaning provided in Schedule A of Annex 
VI.
    Board has the meaning provided in paragraph 3(c) of Part B of Annex 
I.
    Casamance has the meaning provided in paragraph 1 of Part A of 
Annex I.
    CCs has the meaning provided in paragraph 2(a)(iv) of Part B of 
Annex I.
    Cellule has the meaning provided in paragraph 3(d) of Part B of 
Annex I.
    CIF Disbursement has the meaning provided in Annex IV.
    CDI has the meaning provided in paragraph 2(a)(iv)(2) of Part B of 
Annex I.
    Compact has the meaning provided in the Preamble.
    Compact Contract has the meaning provided in Schedule C of Annex 
VI.
    Compact Goal has the meaning provided in Section 1.1.
    Compact Implementation Funding has the meaning provided in Section 
2.2(a).
    Compact Records has the meaning provided in Section 3.7(a).
    Compact Term has the meaning provided in Section 7.4.
    Covered Provider has the meaning provided in Section 3.7(c).
    CRs has the meaning provided in paragraph 2(a)(iv) of Part B of 
Annex I.
    DD has the meaning provided in Schedule B of Annex VI.
    Delta has the meaning provided in paragraph 2(a) of Part B of Annex 
I.
    DGD has the meaning provided in Schedule B of Annex VI.
    DGID has the meaning provided in Schedule A of Annex VI.
    Disbursement has the meaning provided in Section 2.4.
    Establishment Decree has the meaning provided in paragraph 3(c) of 
Part B of Annex I.
    EU has the meaning provided in paragraph 1(d) of Part B of Annex I.
    Evaluation Component has the meaning provided in paragraph 1 of 
Annex III.
    Excess CIF Amount has the meaning provided in Section 2.2(d).
    Exempt Person has the meaning provided in Schedule D of Annex VI.
    Exempt Vendor has the meaning provided in Schedule C of Annex VI.
    Fuel Approval Documents has the meaning provided in Schedule E of 
Annex VI.
    Final Evaluations has the meaning provided in paragraph 4(b) of 
Annex III.
    Fiscal Agent has the meaning provided in paragraph 3(f) of Part B 
of Annex I.
    Goal Indicators has the meaning provided in paragraph 3(a) of Annex 
III.
    Government has the meaning provided in the Preamble.
    Governance Guidelines has the meaning provided in paragraph 3(c) of 
Part B of Annex I.
    Implementation Letter has the meaning provided in Section 3.5.
    Implementing Entity has the meaning provided paragraph 3(e) of Part 
B of Annex I.
    Implementing Entity Agreement has the meaning provided in paragraph 
3(e) of Part B of Annex I.
    Indicators has the meaning provided in paragraph 3(a) of Annex III.
    Inspector General has the meaning provided in Section 3.8(a).
    Irrigation Maintenance Action Plan has the meaning provided in 
paragraph 2(e) of Part B of Annex I.
    Management Unit has the meaning provided in paragraph 3(c) of Part 
B of Annex I.
    M&E Annex has the meaning provided in Annex III.
    M&E Plan has the meaning provided in Annex III.
    MCA Act has the meaning provided in Section 2.2(a).
    MCA-Senegal has the meaning provided in Section 3.2(b).
    MCA-Senegal Bylaws has the meaning provided in paragraph 3(c) of 
Part B of Annex I.
    MCC has the meaning provided in the Preamble.
    MCC Environmental Guidelines has the meaning provided in Section 
2.7(c).
    MCC Funding has the meaning provided in Section 2.3.
    MCC Gender Policy has the meaning provided in paragraph 3 of Part A 
of Annex I.
    MCC Policy for Monitoring and Evaluation of Compacts and Threshold 
Programs has the meaning provided for in paragraph 4 of Annex III.
    MCC Program Procurement Guidelines has the meaning provided in 
Section 3.6.
    MCC Resettlement Guidance has the meaning provided in paragraph 3 
of Part A of Annex I.
    MCC Web site has the meaning provided in Section 2.7.
    MFG-MCA has the meaning provided in Section 3.2(b).
    MoEF has the meaning provided in Schedule A of Annex VI.
    Monitoring Component has the meaning provided in paragraph 1 of 
Annex III.
    Multi-Year Financial Plan Summary has the meaning provided in 
paragraph 1 of Annex II.
    NGOs has the meaning provided in paragraph 1 of Part A of Annex I.
    OMB has the meaning provided in Section 3.8(b).
    OP 4.12 has the meaning provided in paragraph 3 of Part A of Annex 
I.
    PACR has the meaning provided in paragraph 2(d) of Part B of Annex 
I.
    Party and Parties has the meaning provided in the Preamble.
    PDMAS has the meaning provided in paragraph 2(d) of Part B of Annex 
I.
    Permitted Account has the meaning provided in Section 2.4.
    POAS has the meaning provided in paragraph 2(a)(iv)(2) of Part B of 
Annex I.
    Podor has the meaning provided in paragraph 2(a) of Part B of Annex 
I.
    Principal Representative has the meaning provided in Section 4.2.
    Procurement Agent has the meaning provided in paragraph 3(g) of 
Part B of Annex I.
    Program has the meaning provided in the Preamble.
    Program Funding has the meaning provided in Section 2.1.

[[Page 54372]]

    Program Guidelines means collectively the Audit Guidelines, the MCC 
Environmental Guidelines, the Governance Guidelines, the MCC Program 
Procurement Guidelines, the Reporting Guidelines, the MCC Policy for 
Monitoring and Evaluation of Compacts and Threshold Programs, and any 
other guidelines, policies or guidance papers from time to time 
published on the MCC Web site.
    Program Implementation Agreement or PIA has the meaning provided in 
Section 3.1.
    Program Objective has the meaning provided in Section 1.2.
    Project(s) has the meaning provided in Section 6.2(b).
    Project Objective(s) has the meaning provided in Section 1.3.
    Project Objective and Outcome Indicators has the meaning provided 
in paragraph 3(a) of Annex III.
    Provider has the meaning provided in Section 3.7(c).
    RN2 has the meaning provided in paragraph 1(a) of Part B of Annex 
I.
    RN6 has the meaning provided in paragraph 1(a) of Part B of Annex 
I.
    Road Fund has the meaning provided in paragraph 1(e) of Part B of 
Annex I.
    SAED has the meaning provided in paragraph 2(a) of Part B of Annex 
I.
    Senegal has the meaning provided in the Preamble.
    Stakeholder's Committee has the meaning provided in paragraph 3(c) 
of Part B of Annex I.
    Target has the meaning provided in paragraph 3(a) of Annex III.
    Taxes has the meaning provided in Section 2.8(a).
    TE has the meaning provided in Schedule B of Annex VI.
    Temporary Admission Request has the meaning provided in Schedule B 
of Annex VI.
    United States Dollars means the lawful currency of the United 
States of America.
    US$ means United States Dollars.
    USAID has the meaning provided in paragraph 1(d) of Part B of Annex 
I.
    USDA has the meaning provided in paragraph 2(d) of Part B of Annex 
I.
    Valley has the meaning provided in paragraph 1 of Part A of Annex 
I.
    Vendor has the meaning provided in Schedule A of Annex VI.

Annex VI Specific Tax Exemption Mechanisms

Schedule A Value Added Tax (VAT) \9\
---------------------------------------------------------------------------

    \9\ To the extent that VAT is imposed at the port of entry 
(``bureau d'entr[eacute]e'') on imported goods, together with custom 
duties, the applicable tax exemption procedures are described in 
Schedule B below.
---------------------------------------------------------------------------

Legal Basis for Exemption

    1. The Compact.
    2. The Agreement dated May 13, 1961, by and between the United 
States Government and the Government relating to Economic, Financial 
and Technical Assistance, which entered into force on May 13, 1961 (the 
``Bilateral Agreement'').
    3. Applicable provisions of the Code G[eacute]n[eacute]ral des 
Imp[ocirc]ts.
    4. Applicable textes d'application.

Beneficiaries of Exemption

    MFG-MCA (to be replaced by MCA-Senegal, both of which shall be 
referred to herein collectively as ``MCA-Senegal''), each Implementing 
Entity and any individuals or legal persons providing services, goods 
or works in connection with the Compact Program (each a ``Vendor'').

Procedures

A. Local Purchases by MCA-Senegal
    <bullet> MCA-Senegal requests a final invoice free of VAT (``hors 
TVA'') for the services, goods or works to be purchased from the 
applicable supplier.\10\
---------------------------------------------------------------------------

    \10\ For efficiency, the request should reflect the amount of 
goods needed for several months.
---------------------------------------------------------------------------

    <bullet> MCA-Senegal submits the final invoice to the ``Direction 
Generale des Impots et Domaines'' (``DGID'') of the Ministry of Economy 
and Finance (``MoEF''), requesting exoneration from VAT, together with 
(i) a reference to the registered Compact or (ii) a copy of the 
instrument of Compact ratification and the applicable Compact tax 
provisions. For the avoidance of doubt, MCA-Senegal may also submit the 
final invoice together with a copy of its ``Attestation d'Exoneration'' 
(``AE'') and a copy of the Compact.
    <bullet> Within forty-eight (48) hours, DGID stamps the final 
invoice and returns the same to MCA-Senegal and the purchase(s) can be 
made by MCA-Senegal free of VAT (``hors TVA'').
B. Local Purchases by Any Implementing Entity or Any Vendor
    <bullet> The Implementing Entity/Vendor requests a final invoice 
free of VAT (``hors TVA'') for the goods or services to be purchased 
from the applicable supplier.\11\
---------------------------------------------------------------------------

    \11\ For efficiency, the request should reflect the amount of 
goods needed for several months.
---------------------------------------------------------------------------

    <bullet> The Implementing Entity/Vendor submits the final invoice 
to MCA-Senegal for approval and onward submission to DGID.
    <bullet> MCA-Senegal submits a request to DGID with the final 
invoice, requesting exoneration from VAT, together with (i) a reference 
to the registered Compact or (ii) a copy of the instrument of Compact 
ratification and the applicable Compact tax provisions. For the 
avoidance of doubt, MCA-Senegal may also submit the final invoice 
together with a copy of its AE and a copy of the Compact.
    <bullet> Within forty-eight (48) hours, DGID stamps the final 
invoice and returns the same to MCA-Senegal.
    <bullet> MCA-Senegal delivers the stamped, final invoice to the 
Implementing Entity/Vendor as soon as practicable and the purchase(s) 
can be made by the Implementing Entity/Vendor free of VAT (``hors 
TVA'').

Schedule B Customs Duties

Legal Basis for Exemption

    1. The Compact.
    2. The Bilateral Agreement.
    3. Applicable provisions of the Code des Douanes.
    4. Applicable textes d'application.

Beneficiaries of the Exemption

    MCA-Senegal, each Implementing Entity and any Vendor importing 
goods in connection with the Compact Program.

Procedures

A. Purchases of Imported Goods by MCA-Senegal
    <bullet> MCA-Senegal obtains a pro forma invoice free of all 
customs duties, including but not limited to VAT and any other 
applicable Taxes (``hors taxes--hors douane''), for the specific items 
being imported for Compact-related work, and completes a ``Titre 
d'Exoneration'' (``TE''), which can be obtained from the Chamber of 
Commerce.\12\
---------------------------------------------------------------------------

    \12\ The TE is actually completed by MCA-Senegal's 
``Commissionnaire Agr[eacute][eacute] en Douane'' with the 
appropriate customs codes for each item to be imported.
---------------------------------------------------------------------------

    <bullet> MCA-Senegal properly signs the TE and submits a request to 
the ``Direction Generale des Douanes'' (``DGD'' of the MoEF requesting 
the exoneration of all customs duties, including but not limited to VAT 
and any other applicable Taxes (``hors taxes--hors douane''), on the 
goods to be imported. The TE and seven (7) copies of the pro forma 
invoice are attached to the request.
    <bullet> Within forty-eight (48) hours, the DGD stamps the TE, and 
the pro forma invoices, and returns all of the documents (collectively, 
the ``Approval Documents'') to MCA-Senegal.
    <bullet> MCA-Senegal provides the Approval Documents to its 
``Commissionnaire Agr[eacute][eacute] en Douane'' to prepare a 
``Declaration de Douane'' (``DD''), which can be obtained at the

[[Page 54373]]

port of entry. The ``Commissionnaire Agr[eacute][eacute] en Douane'' 
files the DD, together with the Approval Documents, with the ``Bureau 
Des Douanes d'Importation.''
    <bullet> Within seventy-two (72) hours, the imported goods can be 
retrieved free of all customs duties, including but not limited to VAT 
and any other applicable Taxes (``hors taxes--hors douane'').
B. Purchases of Imported Goods by Any Implementing Entity or Any Vendor
    <bullet> The Implementing Entity/Vendor submits a request to MCA-
Senegal, which shall include (i) seven (7) copies of a pro forma 
invoice free of all customs duties, including but not limited to VAT 
and any other applicable Taxes (``hors taxes--hors douane''), for the 
specific items being imported for Compact-related work and (ii) a 
completed TE.\13\
---------------------------------------------------------------------------

    \13\ The TE is actually completed by the Implementing Entity/
Vendor's ``Commissionnaire Agr[eacute][eacute] en Douane'' with the 
appropriate customs codes for each item to be imported.
---------------------------------------------------------------------------

    <bullet> MCA-Senegal, on the Implementing Entity/Vendor's behalf, 
submits a request to DGD requesting the exoneration of all customs 
duties, including but not limited to VAT and any other applicable Taxes 
(``hors taxes--hors douane''), on the goods to be imported. The TE and 
the pro forma invoices are attached to the request.
    <bullet> Within forty-eight (48) hours, the DGD stamps the Approval 
Documents and returns the Approval Documents to MCA-Senegal.
    <bullet> MCA-Senegal provides the stamped Approval Documents to the 
Implementing Entity/Vendor as soon as practicable.
    <bullet> The Implementing Entity/Vendor provides the Approval 
Documents to its ``Commissionnaire Agr[eacute][eacute] en Douane'' to 
prepare a DD, which can be obtained at the port of entry. The 
``Commissionnaire Agr[eacute][eacute] en Douane'' files the DD, 
together with the Approval Documents, with the ``Bureau Des Douanes 
d'Importation.''
    <bullet> Within seventy-two (72) hours, the imported goods can be 
retrieved free of all customs duties, including but not limited to VAT 
and any other applicable Taxes (``hors taxes--hors douane'').
C. Temporary Admission of Equipment, Including but Not Limited to 
Automobiles and Household Goods, by Vendors \14\
---------------------------------------------------------------------------

    \14\ The Government permits the temporary, tax exempt admission 
of equipment, including but not limited to automobiles and household 
goods, if such equipment will be re-exported upon the earlier of (i) 
the completion of the applicable contract or (ii) the expiration or 
termination of the Compact; provided that such equipment, including 
but not limited to automobiles and household goods, is used solely 
for Compact-related work. If the equipment, including but not 
limited to automobiles and household goods, is later sold in Senegal 
or is used in Senegal in connection with work that is not related to 
the Compact Program, then the pro rata share of the applicable Taxes 
must be paid at such time in accordance with the laws of Senegal.
---------------------------------------------------------------------------

    <bullet> The Vender obtains a pro forma invoice free of all customs 
duties, including but not limited to VAT and any other applicable Taxes 
(``hors taxes--hors douane''), for the equipment, including but not 
limited to automobiles and household goods, to be imported and prepares 
a ``temporary admission of equipment'' request (a ``Temporary Admission 
Request'').
    <bullet> MCA-Senegal, on the Vendor's behalf, submits the Temporary 
Admission Request and seven (7) copies of the pro forma invoice to the 
Director of Studies and Legislation within DGD as soon as practicable.
    <bullet> Within seventy-two (72) hours, DGD stamps the Temporary 
Admission Request and the pro forma invoices, which permits the 
applicable equipment to be imported free of all customs duties, 
including but not limited to VAT and any other applicable Taxes (``hors 
taxes--hors douane''), for a period of twelve (12) months.
    <bullet> MCA-Senegal provides the stamped Temporary Admission 
Request to the Vendor as soon as practicable.
    <bullet> The Vendor, through its ``Commissionnaire 
Agr[eacute][eacute] en Douane,'' completes the procedures for the 
importation of goods set forth in Section B of this Schedule B.
    <bullet> Thereafter, COTECNA, the control structure approved by the 
Government (or any successor entity thereto), must validate the 
purchase price of the equipment, as indicated on the pro forma invoice. 
COTECNA will identify the origin of the equipment, obtain the actual 
price of such equipment, and issue a certificate of value, confirming 
or denying the price set forth in the pro forma invoice. If the 
purchase price is denied, COTECNA S[eacute]n[eacute]gal saisira COTECNA 
du pays d'origine du mat[eacute]riel [agrave] importer qui contactera 
[agrave] son tour le fournisseur dudit mat[eacute]riel pour avoir son 
prix r[eacute]eUne fois ce prix obtenu, COTECNA S[eacute]n[eacute]gal 
fournit alors l'avis de notification qui confirme ou infirme le prix 
d[eacute]clar[eacute]; et dans ce cas, un redressement peut [ecirc]tre 
effectu[eacute] pour porter la vraie valeur dans la d[eacute]claration 
de douane en admiDGD will correct the purchase price as set forth in 
the Temporary Admission Request and in its internal records. The time 
required for COTECNA to validate the purchase price of the equipment 
varies, but in any case shall not delay the time required for DGD to 
stamp the Temporary Admission Request and the pro forma invoice.
    <bullet> The stamped Temporary Admission Request also exempts the 
applicable equipment from any fees and/or charges associated with the 
``service des mines,'' including without limitation any registration, 
sticker and/or license fees.
    <bullet> The Temporary Admission Request must be renewed every 
twelve (12) months until the earlier of (i) the completion of the 
applicable agreement or contract, (ii) the end of the work related to 
the Compact Program and/or (iii) the expiration or termination of the 
Compact.
    <bullet> If the duration of the work related to the Compact Program 
exceeds twelve (12) months, the Vendor shall submit two requests to 
MCA-Senegal (for onward submission to the Director of Studies and 
Legislation within the DGD) prior to the expiration of original 
Temporary Admission Request:
    [cir] A request for exemption from any Taxes payable on the 
consumption of equipment previously admitted by the DGD; and
    [cir] A request for renewal of the Temporary Admission Request.
    <bullet> Upon the earlier of (i) the completion of the applicable 
agreement or contract, (ii) the end of the work related to the Compact 
Program and/or (iii) the expiration or termination of the Compact, the 
equipment must be re-exported or placed in a bonded warehouse. DGD must 
provide prior authorization for the equipment to be released for 
consumption in Senegal, and the pro rata share of any applicable Taxes 
must be paid at such time in accordance with the laws of Senegal.

Schedule C Corporate Income Tax

Legal Basis for Exemption

    1. The Compact.
    2. The Bilateral Agreement.
    3. Applicable provisions of the Code G[eacute]n[eacute]ral des 
Imp[ocirc]ts.
    4. Applicable textes d'application.

Beneficiaries

    All Vendors (including companies or other legal persons), other 
than Vendors formed under the laws of Senegal (each an ``Exempt 
Vendor''); provided that in determining if a Vendor has been formed 
under the laws of Senegal for the purposes of this Schedule C, the 
status of such Vendor shall be based on its status as of the time it is 
awarded or executes a Compact-related agreement or contract, and such 
initial determination shall not change regardless of: (i) The type of 
agreement or contract used to employ or engage such Vendor, (ii) any 
laws of Senegal

[[Page 54374]]

that purport to change such status based on period of contract 
performance or period of time residing and/or working in Senegal and/or 
(iii) any requirement under the laws of Senegal that a company or other 
legal person must establish a branch office in Senegal, or otherwise 
register or organize itself under the laws of Senegal, in order to 
provide goods, services or works in Senegal.

Procedures

    <bullet> Any Exempt Vendor earning only Compact-related corporate 
income in Senegal in any given fiscal year shall be exempt from paying 
any applicable Taxes on such Compact-related corporate income and shall 
declare such Compact-related corporate income in its year-end tax 
filing with DGID solely for informational purposes.
    <bullet> Any Exempt Vendor earning Compact-related corporate income 
and non-Compact-related corporate income in any given fiscal year 
shall:
    [cir] Submit and register each Compact-related contract or 
agreement (each a ``Compact Contract'') with DGID, together with a 
certification from MCA-Senegal confirming that the goods, services or 
works to be provided under the Compact Contract form a part of the 
Compact program.
    [cir] At the end of any such fiscal year, the Exempt Vendor shall 
be permitted to exclude, the gross income derived from any Compact 
Contract(s) (as verified by the registered Compact Contract(s)) for the 
purposes of determining its corporate income tax liability in Senegal 
for any such fiscal year. The Exempt Vendor shall declare such Compact-
related gross corporate income in its year-end tax filing wth DGID 
solely for informational purposes.
    [cir] For example, if an Exempt Vendor earned US$100,000 of gross 
corporate income under a Compact Contract(s) and an additional 
US$500,000 in other Senegal-related gross corporate income, the Exempt 
Vendor shall be permitted to exclude, the US$100,000 for the purposes 
of determining its corporate income tax liability in Senegal for such 
fiscal year.

Schedule D Individual Income Tax

Legal Basis for Exemption

    1. The Compact.
    2. The Bilateral Agreement.
    3. Applicable provisions of the Code G[eacute]n[eacute]ral des 
Imp[ocirc]ts.
    4. Applicable textes d'application.

Beneficiaries

    All individuals, other than citizens and permanent residents of 
Senegal, working in connection with the Compact Program (each an 
``Exempt Person''); provided that in determining if an individual is a 
permanent resident for the purposes of this Schedule D, the status of 
such individual shall be based on his/her status as of the time that 
such individual is awarded or executes a Compact-related agreement or 
contract, and such initial determination shall not change regardless 
of: (i) The type of contract used to employ or engage such individual 
and/or (ii) any laws of Senegal that purport to change such status 
based on period of contract performance or period of time residing and/
or working in Senegal.

Procedures

    <bullet> Any Exempt Person earning only Compact-related personal 
income in Senegal in any given fiscal year shall be exempt from paying 
any applicable Taxes on such Compact-related personal income, and shall 
declare such Compact-related personal income in its year-end tax filing 
with DGID solely for informational purposes.
    <bullet> Any Exempt Person earning Compact-related personal income 
and non-Compact-related personal income in any given fiscal year shall 
be permitted to exclude the gross amount of such Compact-related 
personal income for the purposes of determining his/her personal income 
tax liability in Senegal for any such fiscal year. The Exempt Person 
shall declare such Compact-related gross personal income in its year-
end tax filing with DGID solely for informational purposes.

Schedule E Fuel Tax

Legal Basis for Exemption

    1. The Compact.
    2. The Bilateral Agreement.
    3. Applicable provisions of the Code G[eacute]n[eacute]ral des 
Imp[ocirc]ts.
    4. Applicable provisions of the Code des Douanes.
    5. Applicable textes d'application.

Beneficiaries

    Any fuel purchased for use exclusively in connection with the 
Compact Program.

Procedures

A. Purchases of Fuel by MCA-Senegal Through Gas Coupons
    <bullet> MCA-Senegal obtains a pro forma invoice from a Senegal-
based oil company for a particular quantity of fuel free of all of 
customs duties, including but not limited to VAT, the ``tax speciale 
sur hydrocarbons'' and any other applicable Taxes (``hors taxes--hors 
douane''), and completes a TE, which can be obtained from the Chamber 
of Commerce.\1\
---------------------------------------------------------------------------

    \1\ The TE is actually completed by MCA-Senegal's 
``Commissionnaire Agr[eacute][eacute] en Douane'' with the 
appropriate customs code.
---------------------------------------------------------------------------

    <bullet> MCA-Senegal properly signs the TE and submits a request to 
DGD requesting the exoneration of all customs duties, including but not 
limited to VAT, the ``tax speciale sur hydrocarbons'' and any other 
applicable Taxes (``hors taxes--hors douane''), on the fuel to be 
imported. The TE and seven (7) copies of the pro forma invoice are 
attached to the request.
    <bullet> Within seventy-two (72) hours, DGD stamps the TE and the 
pro forma invoices (collectively, the ``Fuel Approval Documents'') and 
returns the same to MCA-Senegal.
    <bullet> Thereafter, MCA-Senegal submits the Fuel Approval 
Documents to DGID requesting the exoneration of any additional Taxes.
    <bullet> Within seventy-two (72) hours, DGID stamps the Fuel 
Approval Documents and returns the same to MCA-Senegal.
    <bullet> The stamped Fuel Approval Documents shall entitle MCA-
Senegal to purchase free from customs duties, including but not limited 
to VAT, the ``tax speciale sur hydrocarbons'' and any other applicable 
Taxes (``hors taxes--hors douane''), for the price set forth in the pro 
forma invoice, gas coupons from the Senegal-based oil company equal to, 
in the aggregate, the quantity of fuel represented on the pro forma 
invoice.
    <bullet> Subject to the specific terms of the arrangement with the 
Senegal-based oil company, the gas coupons can be redeemed at the oil 
company's various gas stations in Senegal. Each coupon entitles the 
bearer to the quantity of fuel set forth on such coupon.
B. Purchase of Fuel by Implementing Entities/Vendors Through Gas 
Coupons
    <bullet> The Implementing Entity/Vendor submits a request to MCA-
Senegal, which shall include (i) seven (7) copies of a pro forma 
invoice from a Senegal-based oil company for a particular quantity of 
fuel free of all of customs duties, including VAT, the ``tax speciale 
sur hydrocarbons'' and any other applicable Taxes (``hors taxes--hors 
douane''), and (ii) a completed TE.\2\
---------------------------------------------------------------------------

    \2\ The TE is actually completed by the Implementing Entity/
Vendor's ``Commissionnaire Agr[eacute][eacute] en Douane'' with the 
appropriate customs code.
---------------------------------------------------------------------------

    <bullet> MCA-Senegal, on the Implementing Entity/Vendor's behalf, 
submits a request to DGD requesting the exoneration of all customs, 
including VAT, the ``tax speciale sur

[[Page 54375]]

hydrocarbons'' and any other applicable Taxes (``hors taxes--hors 
douane''), on the fuel to be imported. The TE and pro forma invoices 
are attached to the request.
    <bullet> Within seventy-two (72) hours, DGD stamps the Fuel 
Approval Documents and returns the same to MCA-Senegal.
    <bullet> Thereafter, MCA-Senegal submits the Fuel Approval 
Documents to DGID requesting the exoneration of any additional Taxes.
    <bullet> Within seventy-two (72) hours, DGID stamps the Fuel 
Approval Documents and returns the same to MCA-Senegal.
    <bullet> MCA-Senegal provides the stamped Fuel Approval Documents 
to the Implementing Entity/Vendor as soon as practicable.
    <bullet> The stamped Fuel Approval Documents shall entitle the 
Implementing Entity/Vendor to purchase free from customs duties, 
including but not limited to VAT, the ``tax speciale sur hydrocarbons'' 
and any other applicable Taxes (``hors taxes--hors douane''), for the 
price set forth in the pro forma invoice, gas coupons from the Senegal-
based oil company equal to, in the aggregate, the quantity of fuel 
represented on the pro forma invoice.
    <bullet> Subject to the specific terms of the arrangement with the 
Senegal-based oil company, the gas coupons can be redeemed at the oil 
company's various gas stations in Senegal. Each coupon entitles the 
bearer to the quantity of fuel set forth on such coupon.
C. Purchases of Fuel by MCA-Senegal To Be Imported in Bulk
    <bullet> MCA-Senegal obtains a pro forma invoice from an oil 
company for a particular quantity of fuel free of all of customs 
duties, including but not limited to VAT, the ``tax speciale sur 
hydrocarbons'' and any other applicable Taxes (``hors taxes--hors 
douane''), and completes a TE.\3\
---------------------------------------------------------------------------

    \3\ The TE is actually completed by MCA-Senegal's 
``Commissionnaire Agr[eacute][eacute] en Douane'' with the 
appropriate customs code.
---------------------------------------------------------------------------

    <bullet> MCA-Senegal properly signs the TE and submits a request to 
DGD requesting the exoneration of all customs duties, including but not 
limited to VAT, the ``tax speciale sur hydrocarbons'' and any other 
applicable Taxes (``hors taxes--hors douane''), on the fuel to be 
imported. The TE and seven (7) copies of the pro forma invoice are 
attached to the request.
    <bullet> Within seventy-two (72) hours, DGD stamps the Fuel 
Approval Documents and returns the same to MCA-Senegal.
    <bullet> Thereafter, MCA-Senegal submits the Fuel Approval 
Documents to DGID requesting the exoneration of any additional Taxes.
    <bullet> Within seventy-two (72) hours, DGID stamps the Fuel 
Approval Documents and returns the same to MCA-Senegal.
    <bullet> MCA-Senegal provides the Fuel Approval Documents to its 
``Commissionnaire Agr[eacute][eacute] en Douane'' to prepare a DD, 
which can be obtained at the port of entry. The ``Commissionnaire 
Agr[eacute][eacute] en Douane'' files the DD, together with the Fuel 
Approval Documents, with the ``Bureau Des Douanes d'Importation.''
    <bullet> Within seventy-two (72) hours, the fuel can be retrieved 
free of all of customs duties, including VAT, the ``tax speciale sur 
hydrocarbons'' and any other applicable Taxes (``hors taxes--hors 
douane'').
D. Purchases of Fuel by an Implementing Entity/Vendor To Be Imported in 
Bulk
    <bullet> The Implementing Entity/Vendor submits a request to MCA-
Senegal, which shall include (i) seven (7) copies of a pro forma 
invoice from an oil company for a particular quantity of fuel free of 
all of customs duties, including VAT, the ``tax speciale sur 
hydrocarbons'' and any other applicable Taxes (``hors taxes--hors 
douane''), and (ii) a completed TE.\4\
---------------------------------------------------------------------------

    \4\ The TE is actually completed by the Implementing Entity/
Vendor's ``Commissionnaire Agr[eacute][eacute] en Douane'' with the 
appropriate customs code.
---------------------------------------------------------------------------

    <bullet> MCA-Senegal, on the Implementing Entity/Vendor's behalf, 
submits a request to DGD requesting the exoneration of all customs, 
including VAT, the ``tax speciale sur hydrocarbons'' and any other 
applicable Taxes (``hors taxes--hors douane''), on the fuel to be 
imported. The TE and pro forma invoices are attached to the request.
    <bullet> Within seventy-two (72) hours, DGD stamps the Fuel 
Approval Documents and returns the same to MCA-Senegal.
    <bullet> Thereafter, MCA-Senegal submits the Fuel Approval 
Documents to DGID requesting the exoneration of any additional Taxes.
    <bullet> Within seventy-two (72) hours, DGID stamps the Fuel 
Approval Documents and returns the same to MCA-Senegal.
    <bullet> MCA-Senegal provides the stamped Fuel Approval Documents 
to the Implementing Entity/Vendor as soon as practicable.
    <bullet> The Implementing Entity/Vendor provides the Fuel Approval 
Documents to its ``Commissionnaire Agr[eacute][eacute] en Douane'' to 
prepare a DD, which can be obtained at the port of entry. The 
``Commissionnaire Agr[eacute][eacute] en Douane'' files the DD, 
together with the Fuel Approval Documents, with the ``Bureau Des 
Douanes d'Importation.''
    <bullet> Within seventy-two (72) hours, the fuel can be retrieved 
free of all of customs duties, including VAT, the ``tax speciale sur 
hydrocarbons'' and any other applicable Taxes (``hors taxes--hors 
douane'').

Schedule F Registration Tax, Registration Fees and Stamp Duty

Legal Basis for Exemption

    1. The Compact.
    2. The Bilateral Agreement.
    3. Applicable provisions of the Code G[eacute]n[eacute]ral des 
Imp[ocirc]ts.
    4. Applicable textes d'application.

Beneficiaries

    MCA-Senegal and any Vendors, for any act or transaction related to 
the Compact Program that is subject to registration fees, stamp duty 
and/or any other registration taxes.

Procedures

A. MCA-Senegal
    <bullet> At the time MCA-Senegal presents the applicable Compact 
Contract to DGID to be stamped and/or registered, MCA-Senegal shall 
present a copy of the Compact
    <bullet> Upon presentation of such documentation, DGID shall stamp 
and/or register the applicable Compact Contract without charge and free 
from any applicable Taxes.
B. Vendors
    <bullet> At the time a Vendor presents the applicable Compact 
Contract to DGID to be stamped and/or registered, the Vendor shall 
present a copy of the Compact, together with a certification from MCA-
Senegal confirming that the goods, services or works to be provided 
under the Compact Contract form a part of the Compact program.
    <bullet> Upon presentation of such documentation, DGID shall stamp 
and/or register the applicable Compact Contract without charge and free 
from any applicable Taxes.

[FR Doc. E9-23328 Filed 10-20-09; 8:45 am]
BILLING CODE 9211-03-P


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