BUREAU VERITAS - RUMORS AND REALITY

UNCLAS CONAKRY 000199

SIPDIS

E.O. 12598: N/A
TAGS: ECIN EFIN ECON PTER EWWT GV
SUBJECT: BUREAU VERITAS - RUMORS AND REALITY


1. SUMMARY. Guinea signed a contract with an international firm
for the provision of transactional customs valuation services, which
should increase customs collections and reduce fraudulent import
practices. Meanwhile, a local business association is protesting
the new service, because they say the fees are too high. However,
businesses may be more concerned about the actual inspections rather
than the fees, for which there seems to be some misinformation. END
SUMMARY.


2. Last week, local media reported that international customs
valuation firm, Veritas has signed an agreement with the Government
of Guinea to begin service at the Port of Conakry in June. On May
12, local media stated that one-half of the merchants at Marche
Madina had closed their doors in protest of the Veritas agreement.
The protestors alleged that the contact called for a new fee which
they could not afford.


3. Later in the day on May 12, Econoff met with the President of
Groupe O.G.D.H. (Organisation Guineenne de Defense des Droits de
l'Homme et du Citoyen) pour les Hommes d'Afaires (GOHA),Mr.
Abdalla. GOHA is a local organization of business persons, which
claims 15,000 members. The President said that his organization had
organized the protest and that the reason was the new fee in the
Veritas agreement. He alleged that the Veritas agreement calls for
a fee equal to 65% of the value of each container. He said that all
businesses in Guinea support his call for action because of the
outrageous amount of the Veritas fee.


4. Econ Off later spoke with Customs Inspector Yaya Diallo, a long
time embassy contact who is also in charge of the main gasoline
depot in Conakry. Mr. Diallo clarified that the actual charge by
Veritas is 650,000 Guinea Francs per container. (NOTE: At current
rates this is about 144 USD. Importers will also be required to pay
100 Euros (155 USD) for each container scanned. END NOTE.)


5. On May 13, Econoff spoke with El Hadj Mamadou Saliou Diallo,
President of the Bureau du Secteur Informel and also President of
the Regional Chamber of Commerce of Conakry. Mr. Diallo stated that
the Minister of Finance has been communicating with the business
community and trying to provide them with accurate information about
the Veritas contract. He said that during a recent meeting, the
businessmen accused the Minister of making a unilateral decision
without prior consultation with the business community, and that
they could not afford the new fee. El Hadj argued that there is no
need for Veritas as all containers are currently scanned, which
should prevent smuggling. He also said that he is aware that the
charge is actually 0.26% per container.


6. The President of the Regional Chamber of Commerce of Conakry who
also claimed credit for the Marche Madina protest, said that his
group would set up a commission to meet with the Minister on May 16
in Madina, and then again the following week. He advised that his
group would not call for further protests until discussions with the
Minister of Finance have finished. However, he said they are
demanding that the contract be cancelled.


7. COMMENT. Improving efficiency at the Customs Office should
increase revenue for the government. Moreover, the IMF inspection
team that left Guinea in early April also spoke positively of the
Veritas contract. It remains to be seen if the improved customs
collections will result in a similar increase in government revenue,
or whether it will be siphoned off as a result of corruption. The
exaggerated fee rumors could actually be more about Veritas'
inspection of containers, and document demands, rather than any
concern over actual fee increases. It is also unclear who is
organizing protests with at least 2 organizations claiming credit.
Currently, the GOHA group appears to represent small scale
merchants, while the members of the Informal Sector and the Chamber
of Commerce appear to consist of medium to large-scale merchants.
Local business may not want independent inspection of containers
arriving in Conakry, and the protests may be more closely linked to
this issue than that of fees. END COMMENT.

CARTER