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 Hooks