AUTHORITIES EXPEL LEBANESE-IVORIAN IN VAT TAX

C O N F I D E N T I A L ABIDJAN 000312

SIPDIS

SIPDIS

E.O. 12958: DECL: 03/21/2017
TAGS: ECON IV PGOV PHUM PINR PREL PTER
SUBJECT: AUTHORITIES EXPEL LEBANESE-IVORIAN IN VAT TAX
CONTROVERSY, RAISING CONSTITUTIONAL, LEGAL CONCERNS

Classified By: EconChief EMassinga, Reasons 1.4 (b,d)


1. (C) Summary. Lebanese-Ivorian trader Ibrahim Reda was
expelled from Cote d'Ivoire for inciting other traders to
violate the VAT tax laws, prompting an ongoing shutdown of a
part of the important Lebanese-owned commercial sector.
Senior ONUCI officials have been approached by Reda's wife
for help in securing his return, and they believe Reda's
long-time opposition to the President's party, along with
Hizbollah ties he himself claims, prompted the government's
action. End Summary.


2. (U) As of March 21, many shops and stores owned by
Lebanese traders and merchants remained shuttered for the
sixth day in a row in protest against the expulsion of
Ibrahim Reda, the Vice President of the mainly Lebanese Union
of Traders and Commercial Operators. Reda was expelled to
Lebanon and two other Lebanese-Ivorians arrested for tax
evasion and "disturbing the public order" for inciting
traders to oppose the implementation of standard invoices in
an effort to boost VAT collection.


3. (U) As of June, 2006, the government began tax audits to
enforce the January 2006 imposition of standard invoices to
be used by all businesses generating more than USD 50,000 in
monthly sales (utilities, supermarkets, airlines and oil
firms were exempted). Incensed by the audits and feeling
targeted, Reda and several others within the Union began
publicly calling for resistance to using the invoices. On
March 16, Reda and two associates were detained by Ivorian
Intelligence Police (DST) and one day later, Reda was
expelled on the order of a public prosecutor on the pretext
that, as a foreigner, he is subject to expulsion if he
violates the law. On March 21, Nord-Sud, a pro-opposition
paper close to the Forces Nouvelles, published a lengthy
interview with Reda in which he slammed the arrest and
expulsion, asserted he had proof of his 2005 Ivorian
naturalization, and promised that he would return through
legal action by his lawyers.


4. (U) The tax office director, Lambert Feh Kesse, said
publicly that he was "determined to fight against the
Lebanese mafia that wants to continue their opaque
transactions to the detriment of government coffers." Feh
Kesse's office estimates VAT fraud to reach up to USD 240
million annually, and the President of the National
Federation of Traders (a group of mainly Afro-Ivorian
commercial operators) applauded the government's vigorous
application of the tax law. The 50,000-strong Lebanese
community here dominates much of the retail and wholesale
business sector.


5. (C) PolOff met with ONUCI Human Rights Division Chief
Guillaume Ngefa and discussed the ongoing Reda case. Ngefa
said that Reda's wife had come to ask for ONOCI's help in
securing her husband's return, and she blamed the President's
party for his fate. She said that Reda had been a known
supporter of Bedie and later Gen. Guei, and that he has never
been close to the FPI. According to Reda's wife, when he
publicly objected to the VAT changes, the President's coterie
found a convenient expedient to silence a long-time thorn in
their side. ONUCI's Ngefa finds this analysis credible, and
added that Reda had told him that Reda is associated with
Hizbollah, which Reda's wife believes was a factor in his
expulsion. Ngefa said he believes Reda will eventually be
allowed to return, given undisclosed sensitive information he
possesses.


6. (C) While Ivorian territorial authorities used an old
Lebanese passport as proof of Reda's Lebanese citizenship,
Reda and his wife claim he had been naturalized in 2005,
making him a dual national (ONUCI supports this claim).
Ivorian law makes no mention of dual nationality, neither
recognizing or rejecting it; in practice this question is
almost never raised here.


7. (C) Comment: According to the Ivorian Constitution, no
Ivorian can be expelled or deprived of his citizenship
without due process. However, the rapidity and lack of
initial judicial review of the expulsion order raise
troubling questions regarding the rule of law and fair
application of constitutional norms that the ruling party
loudly defends when attacking the identification process.
End Comment
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