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