NEW CUSTOMS DIRECTOR DISCUSSES RETURN OF CUSTOMS

UNCLAS SECTION 01 OF 02 ABIDJAN 000296

SIPDIS
SENSITIVE

EEB/TPP/BTA SAGURTON AND AF/EPS REPKO
DEPARTMENT PASS TO USTR CONNIE HAMILTON
DEPARTMENT OF COMMERCE FOR MARKET ACCESS AND COMPLIANCE
MARIA RIVERO
TREASURY FOR DAN PETERS, RICHARD HALL

E.O. 12958: N/A
TAGS: ECON ETRD PREL PGOV IV
SUBJECT: NEW CUSTOMS DIRECTOR DISCUSSES RETURN OF CUSTOMS
CONTROL TO NORTH; VALUATION OF IMPORTED VEHICLES



1. (SBU) Summary. Cote d,Ivoire,s new Customs Director,
Col. Alphone Mangly, expects the redeployment of customs
officials to the north of the country to begin the week of
May 12. In an April 30 meeting, Mangly told Ambassador
candidly that he was not certain how the customs officials
would work with elements of the Forces Nouvelles (FN) but
said the latter were "eager" for professional customs
officers to return to work. At Embassy,s request, Mangly
agreed to look into the system currently used by the Customs
service to valuate vehicles imported from the U.S. The
adjustment we are seeking could translate into increases in
U.S. exports worth millions of dollars. End Summary.


2. (SBU) Ambassador and EconCouns met newly-appointed
Customs Director Colonel Alphonse Mangly in a cordial meeting
on April 30. Mangly succeeds Col. Gnamien Konan, who in
early April declared his candidacy for the presidency in
elections scheduled for November 30. The discussion touched
on the topics of the proper valuation of cars imported from
the U.S. and plans to reunify the national Customs
directorate ("la unite de caisse") through a gradual
redeployment of Customs officials at border points and key
cities in the north, most of which are still under the
de-facto control of the Forces Nouvelles (FN) rebel group.

Reunification of the Customs Directorate in the North
--------------

3. (SBU) Ambassador asked Mangly about published reports
that the government will soon reintroduce the Customs network
of border officials and revenue collection points throughout
the north. Mangly said that along with disarmament, the
"unite de caisse" is a key factor in the normalization of the
country and extension of the government's writ through the
whole territory in advance of the November 30 presidential
election. Mangly said the Customs service would be sending
18 officials to the north the week of May 12. On May 15,
they would be officially "deployed" at the main border post
with Burkina Faso at a ceremony which Prime Minister Soro
reportedly will attend. According to the 2008 budget, the
redeployment of Customs nationwide is supposed to generate
approximately USD 100 million, a substantial sum in tight
budgetary times.


4. (SBU) Asked about the Force Nouvelles, (FN) acceptance
of the Customs service's redeployment, Mangly said the former
rebels are "pressing for us to return." Mangly admitted his
own surprise at this, saying he wasn,t sure why the group
would be eager to see the illicit, quasi-customs revenue
streams it now collects be diverted to the national treasury.
According to Mangly, the FN said they would "provide" 18 of
their own officials to "facilitate" the Customs officials'
redeployment. However, it was unclear to Mangly if the
Forces Nouvelles' intention is to have the 18 become Customs
officers, have them work out a revenue "sharing" scheme, or
serve some other purpose. He speculated that if FN members
are hoping to become customs officials, they may be dismayed
to learn that there is a rigorous process one must first
complete. Mangly said he and his agency would "soon find
out" how this would all work. If the May 15 redeployment
goes well, redeployment of the rest of the Customs offices
including to FN stronghold of Bouake, would take place in the
coming months.

Promise to Review Valuation of Cars Imported from the U.S.
--------------

5. (SBU) For readers background, Cote d'Ivoire is a modest
importer of autos, with approximately 150,000 used and
3,000-4,0000 new cars coming in annually. European brands
continue to lead the market -- Peugeot and Citroen have a
reported 45 percent market share, according to a recent
business publication -- but Asian brands are rapidly
expanding market share. With the sustained fall in the value
of the U.S. dollar relative to the Euro (to which the local
currently, the franc CFA is pegged),used vehicles from the
U.S. have become very attractive in comparison to their
European counterparts, often costing 20-40 percent less.
Importers report interest is particularly acute in the luxury
brand lines, but excellent value in autos can be found in all
U.S. market segments in comparison with the same products in
Europe.


6. (SBU) Background continued: Ivoirian Customs currently
charges duties using a valuation chart that assumes imported

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vehicles are coming from Europe, even if they are purchased
in and exported from the U.S., with U.S. bills of sale. An
example of this unfair treatment would be the importation of
the locally-popular BMW 4x4: if an importer purchased a used
one from Florida for USD 40,000 versus USD 55,000 that he
would pay in Germany or France, Ivoirian Customs uses the USD
55,000 value to calculate customs duties, vice the U.S.
price. Since auto duties are 44 percent for both new and
used vehicles, this policy substantially penalizes U.S.
exports.


7. (SBU) The Ambassador explained to Mangly that numerous
importers have relayed to the Embassy their concerns about
how Ivoirian Customs values and taxes cars coming from the
U.S., and briefly explained the problem described above.
Mangly readily acknowledged that notionally, the policy is
incorrect and inconsistent with Cote d'Ivoire's trade
obligations. He said autos manufactured in the U.S. should
be considered from the U.S. for the purposes of customs
valuation. He promised to look into the situation and give
Embassy a formal response shortly.

Customs Service Would Welcome USG Assistance
--------------

8. (SBU) Mangly told Ambassador that Cote d,Ivoire,s
Customs Service has suffered due to a lack of well-trained
personnel. While advanced technology can help the Customs
service do its job, Mangly said that "machines don't work
without coordination, discipline and dedication." Mangly
mentioned protection of Ivoirian intellectual property
(particularly traditional wax fabrics) and the fight against
drug trafficking as top priorities, and asked if the U.S.
could help with training of Ivoirian Customs officials,
either bilaterally or in a regional context. Ambassador
noted that while Section 508 sanctions impede most forms of
bilateral assistance, a rapid end to the political crisis
through free and fair elections could produce an end to those
restrictions. Embassy agreed to inform appropriate
departments of Cote d,Ivoire,s interest in customs training
should future conditions permit this.



9. (SBU) Comment. Mangly appears to be very much a
technocrat, a welcome personnel move for a government agency
so important to the government's fiscal well-being and often
viewed as highly corrupt. He gave the impression of being
genuinely intent on extending his agency's writ countrywide
and boosting government revenues accordingly. His response
to concern about the valuation of imported autos was
refreshing after nearly six months of stalemated discussions
with his predecessor. Post will monitor actual results on
both issues. End Comment.
NESBITT