An examination of the legal system in Côte d’Ivoire

Côte d’Ivoire is a civil law country. As such, the legal system does not rely on prior decisions, but is instead structured by several different specific codes. The supreme law of the country is the constitution adopted by referendum on October 30, 2016. The legal hierarchy of the country puts the constitution at the top of the legal pyramid.

This constitution is followed, respectively, by international treaties legally ratified by the National Assembly and laws adopted by the National Assembly, ordinances and decrees issued by the president, and, at the bottom, ministerial decrees and orders complete the legal framework.

Regional Relations

Côte d’Ivoire is a member of UEMOA and its economy represents about 40% of this regional organisation. Côte d’Ivoire is also a member of a number of different regional organisations such as the Organisation for the Harmonisation of Business Law in Africa (OHADA), the African Intellectual Property Organisation and the Inter-African Conference on Insurance Markets.

The aforementioned organisations provide regulations in several different sectors of law, namely:

• Banking;

• Companies;

• Securities;

• Insurance;

• Insolvency;

• Civil proceedings;

• Arbitration; and

• Foreign exchange. Côte d’Ivoire is also a member of a number of international organisations promoting international investments such as the World Trade Organisation, which it joined in 1995, as well as the International Centre for Settlement of Investment Disputes.

The Judicial System

The judicial system is organised under the authority of the Supreme Court. The Supreme Court is composed of:

• The Administrative Court of the Supreme Court;

• The Court of Cassation for Civil and Criminal cases; and

• The Constitutional Court for all constitutional matters.

The Administrative Court is competent for all litigations to which the state or a public entity is a party. For certain categories of cases, as in some administrative proceedings, the Supreme Court decides in first and last resort.

The Constitutional Court has exclusive jurisdiction over constitutional issues, mainly the constitutionality of laws, the interpretation of the constitution and even presidential elections disputes.

The Court of Cassation is the higher court for all matters related to and limited to criminal cases, labour and employment disputes, family law and land disputes.

The aforementioned courts are under the authority of the Supreme Court, which decides on their rulings as a last resort.

It should be noted that all matters that imply the interpretation or application of any OHADA uniform act shall be referred in last resort to the OHADA Community Court of Justice and Arbitration instead of the Supreme Court.

Lastly, commercial courts are the newest category of courts, created in Côte d’Ivoire on January 11, 2012, to speed up the settlement of commercial and corporate disputes. They decide on first instance and shall render their decisions within three months.

The Commercial Court Of Appeal

The Commercial Court of Appeal was expected since the establishment of the court in the first instance. The decision to set up of the Commercial Court of Appeals was taken recently through the decree No. 2017-501 of August 2, 2017.

Although the Court of appeal is not operational yet, its role will be to rule on appeals against decisions rendered by the Commercial Court of Abidjan.

Arbitration System

The process by which the parties to a dispute submit their differences to the judgment of an impartial person or group appointed by mutual consent or statutory provision is recognised in Côte d’Ivoire.

Indeed, Côte d’Ivoire is a signatory of the NewYork Convention and arbitral awards shall become fully enforceable in the country through the exequatur procedure. The parties may refer their disputes to local or foreign arbitration centres.

In Côte d’Ivoire there are two types of arbitration courts:

• The Court of Justice and Arbitration; and

• The Court of Justice and Arbitration of the Organisation for the Harmonisation of Business Law in Africa (CCJA), which is the key institution of OHADA. It has been established since 1998 and made its first decisions in 2001. The CCJA was established in 1998 and rendered its first legal decision in 2001. Since April 10, 2015 the CCJA has been composed of 13 judges elected by the Council of Ministers of OHADA for a seven-year, non-renewable term. The judges are required to elect a president and two vice-presidents for a three-and-a-half-year term of office.

The court currently has three chambers: two chambers of five judges and one chamber of three judges. The Treaty on OHADA, supplemented by a rules of procedure before the CCJA, organises the functioning of the court and the status of its judges.

The court shall have its seat in Abidjan, but may sit at any other place in the territory of one of the seventeen member States of the Organisation. It has already held mobile hearings in several member states of OHADA in recent years.

The Court Of Arbitration

The Court of Arbitration of Côte d’Ivoire (CACI) is a centre for the settlement of disputes, including national and international non-profit organisation.

It was created within the Chamber of Commerce and Industry of Côte d’Ivoire. The mission of CACI is to provide economic operators with alternative means of resolving their disputes, in particular disputes related to:

• Arbitration;

• Arbitral proceedings;

• Accelerated recovery of claims;

• Mediation;

• Mini-trial; and

• Expertise. CACI organises and offers economic operators, and to any person who so wishes, different procedures that allow them to find a solution to their disputes outside judicial institutions. CACI, therefore, exercises, like the state courts, the work of justice. The decisions rendered under its aegis have the same legal force as those of the state courts.

Commercial Companies Law

In Côte d’Ivoire commercial companies are governed by the OHADA Uniform Act on Commercial Companies and the Economic Interest Group, which has been applicable since January 1, 1998.

The most commonly used forms of commercial companies are as follows:

• Société à responsabilité limitée (private limited liability company);

• Société anonyme (public limited liability company); and

• Société par actions simplifiée (simplified joint stock company) THE PRIVATE MODEL: The private limited liability company model is the simplest and most common form of business structure in the country. Indeed, this structure is flexible and easy to use. This type of company can even have only one shareholder, and this shareholder can be an individual or a corporation.

In addition, there is no mandatory minimum capital shares. Nevertheless, the nominal value of the shares is at least CFA5000 (€7.50) each. The corporate law limits the liabilities of the shareholders to their contributions.

The responsibility of the management lies with the manager. The manager is vested with the widest powers to act with third parties on behalf of a private limited liability company, even with respect to matters falling outside the scope of the corporate purpose.

Collective decisions are taken at a general meeting by an absolute or a simple majority of the votes. Extraordinary decisions are taken by a three-quarters majority of the votes.

The Public Model

The public limited liability company model is a commercial form of enterprise that is often used for more important commercial activities, since the procedures applicable to this corporate form are more complex. Nevertheless, this company may also have only one stakeholder, and the corporate law limits the liabilities of a stakeholder to its contributions.

The minimum share capital for a public limited liability company is CFA10m (€15,000), divided into shares (actions) of a nominal value of at least CFA10,000 (€15). Since May 5, 2014 the restriction on the selling of shares is expressly recognised, provided that this clause is justified by a serious and legitimate cause.

Thus, any transfer of shares made in violation of this clause would be void if the stipulation was in the articles of association or if it is clear that the buyer knew or should have known of the existence of this clause. Therefore, the reform clarified the regime of opposability of this clause.

At least one-quarter of the nominal value of the shares subscribed in cash must be paid up during capital subscription. The partners are liable for the company’s debts up to the limit of their capital contributions.

Moreover, a public limited liability company may be formed with or without a board of directors consisting of at least three members and a maximum of 12 members.

In the first case, a chairman or managing director of the board of directors (président directeur général), or a managing director (directeur général), assumes responsibility for the general management of the company, while in the second case a general manager (administrateur général) takes on this responsibility.

Furthermore, the manager(s) are vested with the widest powers to act in all circumstances with third parties on behalf of the public limited liability company. Since May 5, 2014 the shareholders of a public limited liability company can delegate to the board the power to raise the capital of the company. Lastly it is possible to organise board meetings via videoconference.

The introduction of the simplified joint stock company under OHADA Law dates back to the OHADA reform of May 5, 2014. This corporate form is the more flexible form available, and is thus attractive to investors since the stakeholders can adapt the articles of association to their precise needs. Indeed, there are no mandatory rules relating to governance and organisation of the company, and the only requirement is that the simplified joint stock company must be represented by a president.

Furthermore, the Uniform Act provides that the action that violates an essential stipulation of the articles of association would be non-effective and a forced execution is possible.

Other Company Structures

The OHADA Uniform Act on Commercial Companies and the Economic Interest Group also provides the possibility of forming other types of commercial companies, including:

• Société en nom collectif (general partnership company), in which all the partners are traders and have unlimited liability for the company’s debts.

The management has the most extensive powers to manage the company; and

• Société en commandite simple (limited partnership), in which there are one or more general partners that have unlimited liability for the debts of the partnership, and one or more limited partners whose exposure to the debts of the partnership is limited to the contribution each has made to the partnership.

Security Law & Commercial Law

The New Uniform Act relating to Secured Transactions entered into force on May 16, 2011. The major innovations of the reform resulting from the amended Uniform Act relating to Secured Transactions may be summarised as follows:

• Security may be granted over any asset, whether present or future, and may secure any present, future or conditional obligation;

• New security mechanisms allow for the transfer of cash by way of security and simplified assignment of receivables by way of security in favour of banks;

• Creation, perfection and enforcement of security interests have been simplified;

• It is possible to appoint a security agent for the creation, perfection, management and enforcement of any security interests; and

• Creation of non-possessory pledges on tangible assets is now allowed.

The New Uniform Act related to General Commercial Law and Uniform Act relating to Cooperatives was also adopted on December 15, 2010.

The major innovations of the reform, resulting from the amended Uniform Act relating to the General Commercial Law, are related to the introduction of the status of entrepreneur for small businesses, which aims to encourage informal entrepreneurs to join the formal economy. In addition, the act also provided for the creation of the three-tiered computerised Registry of Companies and Secured Transactions, where companies and secured transactions are recorded. Furthermore, it should be noted that the business creation process in Côte d’Ivoire was streamlined recently through the implementation of a (single window bureau) Guichet unique des formalités d’entreprises.

The single-window bureau is comprised of all relevant administrative bodies involved in the business creation process, which include tax administration, company registry and the Ministry of Commerce, as well as the National Social Security Fund. It aims to allow the carrying out of all the formalities for starting a business within 48 hours.

Criminal Provisions On Business Law

The Government of Côte d’Ivoire took recent legislative action to induce businesses to ensure full compliance with the provisions of the various OHADA uniform acts. In this regard, Law No. 2017-727 of 9 November 2017 has come into force and provides for specific fines and punishments in case of infringements to the provisions of the OHADA uniform acts.

Foreign Exchange Controls

Côte d’Ivoire is a member of UEMOA, which has a common Central Bank of West African States and a uniform exchange regulation.

Within the UEMOA the foreign exchange control and related issues are governed by Regulation No. 09/2010/CM/UEMOA of October 2010 and its annexes. Under this regulation the transfer of funds between UEMOA member countries is free and not subjected to any restrictions under the free movement of funds within the monetary union.

The governing principle is that the UEMOA foreign exchange rules regulate only payments going out of UEMOA and not payments coming in, UEMOA as those payments pose no risk to members.

Following UEMOA Regulation CM/09/2010/ UEMOA related to the Foreign Exchange Relations of the UEMOA, the difference must be made between residents and non-residents when it comes to foreign currency accounts.

Concerning residents, and following Article 7 of Instruction No. 08/07/2011, the opening of a foreign currency account by a resident is subject to authorisation by the minister of finance following assent from the Central Bank. Furthermore, this authorisation cannot exceed one year and must be renewed each year.

Concerning non-residents, under Article 34 of Appendices II of Regulation 09/2010, foreign currency accounts can be freely held by non-residents in the UEMOA region, provided they are labelled in euro. Otherwise an authorisation is required from the Central Bank. Lastly, note that non-residents can freely open regular accounts in CFA (Instruction No. 08/07/2011).

When it comes to investment transactions, it should be stressed that the transfer of funds from within UEMOA to non-member countries in relation to investment transactions requires the prior approval of the Ministry of and Economy and Finance (Ministère de l’Economie et des Finances, MEF). Typically, in cases where a non-resident grants a loan to a resident of the UEMOA, this transaction must first be declared to the MEF so that the repayment of this loan can be made easily.

Controlled Banking Systems

Banking regulations derive from UEMOA regulations, which are updated from time to time to reflect new banking authorisation and constraints. No banking activity is allowed if it is not supplied by a commercial bank that is approved and controlled by the UEMOA Banking Commission.

Financial Market Regulations

Abidjan has been appointed to accommodate the UEMOA Stock Exchange (Bourse Régionale des Valeurs UEMOA and the UEMOA Authority for Regulation of Financial Markets and the Regional Council for Public Saving and Financial Markets in order to authorise, in particular, listings of companies and bonds, including both state-owned and private companies.

Investment Code

Since June 7, 2012 Côte d’Ivoire has instigated a new investment code, adopted by the Presidential Ordinance 2012-487 of the same date. This code in effect replaces the investment code of 1995, and is intended to encourage and stimulate productive, green and socially responsible investments in the country. The code provides a number of the same rights available for national or foreign investors in all sectors, except non-industrial housing, commerce, finance and banking.

General rights afforded include the protection of the property, be it movable, immovable or intellectual; the free access to raw materials; the free transfer of profits; and the right to a prior and just compensation in case of expropriation.

Two investment regimes are available to investors with specific rights attached to them:

• The declaration regime whereby an investor benefits from tax exemptions for investments made in relation to the creation of a new activity. The country has been divided in three investment zones (A, B and C), and the exemptions rates, as well as their duration, depend on the zone of the country where the investments are realised.

Lastly, the benefits are granted upon presentation of the evidence of the investments realised.

• The approval regime whereby an investor receives, for a certain period of time, tax exemptions for investments to be made in connection with the creation or the development of an activity in any zone of the country. The benefits are granted upon presentation of an investment programme to the national agency in charge of the investment promotion. Apart from this general legal framework for investments, additional legal incentives also exist in the context of specific laws, particularly with regard to certain types of activities and transactions. LEGISLATION

Affecting Small And Mediumsized Enterprises (Smes)

The new investment code contains a number of specific provisions intended to help SMEs with incentives including:

• Exemption from corporate income tax from seven to 15 years;

• State granting of lands; and

• Preferential tariffs on electricity, water and new technologies services.

Upstream Hydrocarbons

Ordinance No. 12-369 of April 18, 2012 modifying Law No. 96-669 of August 29, 1996 relative to the Petroleum Code, regulates the industry. The ordinance provides that the state of Côte d’Ivoire remains the owner of its natural resources, but that an exploration and production-sharing contract may be negotiated between oil operators and the state.

Mining

There are three relevant statutes, namely: • Law No.2014-138 dated March 24, 2014, supported by Decree No.2014-397 dated June, 25 2014, which implements;

• The Mining Code and Ordinance No.2014-148 dated March 26, 2014, which relates to fees, royalties and mining taxes; and

• Ministerial Decree No. 002/MIM/CAB of January 11, 2016 which relates to the grant and the renewal procedures of mining titles. Policy direction is given by the Ministry of Industry and Mines (Ministère de l’Industrie et des Mines, MIM), with operational and administrative affairs handled by the Société pour le Développement Minier de la Côte d’Ivoire.

An exploration permit is required to conduct exploration. It is granted for four years upon a surface up to 98842 acres, by a presidential decree during the Council of Ministers upon proposal of the minister in charge of the MIM to any person or entity that submitted an application which is in line with legal requirements for its application. This permit is renewable twice for a period of three years.

An exploitation permit is required to conduct mining. Pursuant to Article 67 of Decree No. 2014-397, dated June 25, 2014, the artisanal mining permit is granted by the Minister of Mines and Industry.

Under article 58 of the Decree No.2014-397, dated June 25, 2014, the semi-industrial permit to conduct mining is delivered by the minister of MIM for four years.

Finally, the industrial mining permit is granted by a presidential decree during the Council of Ministers upon proposal by the minister of MIM, after the provision of suitable evidence of the existence of relevant mineral deposits, as previously indicated in the exploration license.

An investigation as to the convenience or otherwise of the exploitation of the resources – whether it is in “commodo” or “incommodo” – under Ivorian law, is required prior to the granting of the authorisation.

A person does not need to own or acquire an interest in the land in order to apply for or hold a mining permit. Once this investigation is completed, the entity or the individual is entitled to an exploration permit.

It should be noted that the permit holder is entitled, among other things, to the following tax advantages and incentives: (i) Exemption of payment of up to 50% of the registration fees for capital increase in a mining company; (ii) Exemption of import duties, including value-added tax on import of materials, machinery and equipment for mining activities; and (iii) Exemption from export duties on mining products. The closure of mining operations should be declared first to the MIM. There are other obligations such as:

• The cleaning and rehabilitation of the site;

• The removal of any mining infrastructures; and

• The monitoring of the post rehabilitation programme. To this end, the holder of a mining title must open an escrow account before starting the activities. These obligations are set out in the closure plan, which is drafted on a case-by-case basis depending on the site and the type of exploitation.

Employment Law

The sources of employment law are:

• The Labour Code adopted on July 20, 2015;

• The different implementing decrees; and

• The professional collective agreements negotiated between employers and employees dated July 19, 1977. Different types of employment contracts may be offered to employees, namely:

• Unlimited-term contracts:

• Fixed-term contracts (according to the law, fixed-term contracts have a maximum cumulative duration of no more than two years); or

• Part-time contracts.

The length of a standard working day is eight hours.

Overtime is legally allowed with an increase of the pay. There are prescribed premiums payable depending on whether the overtime takes place during the day, the night or on official holidays. Wages of employees must not be lower than the local minimum salary (on a monthly basis).

An employee is entitled to paid annual leave after one year of working for an employer. Each employee is entitled to 2.2 working days per month of working, equivalent to 26.4 working days – 1 month – annually.

The law grants additional paid leave for foreign employees or employees who have reached a specific length of service.

A foreign national must hold a work permit before being able to render services locally.

A foreign employee may only be recruited by a company if there is a genuine need for the employee and there is no suitable domestic candidate.

A fine equivalent to three months’ salary of the employee recruited may be imposed on any employer that has unlawfully employed foreign nationals without complying with the relevant statutory requirements.

With regard to fixed-term employment contracts, these are terminated without any notice or compensation at the term. The termination of unlimited-term contracts should be motivated by real and serious grounds, such as personal grounds regarding the employee or economic motives. The employment contract can be terminated by alternative amicable means, such as resignation of the employee, or amicable termination agreements signed by both parties.

Land Ownership

Côte d’Ivoire laws for private and commercial property do not provide for any restrictions on nationality for the possession and ownership of a property in Côte d’Ivoire, except for traditional village lands.

Furthermore, any foreigner desiring to lease or acquire property for private or commercial needs may freely do so according to the law.

Procurement Contracts Regulation

Procurement contracts are regulated in Côte d’Ivoire by a decree adopted on August 6, 2009 in line with UEMOA directives 4/2005 and 5/2005 on procurement contracts.

Pursuant to this decree, Côte d’Ivoire has created via Decree 2009-260 of August 6, 2009, a national authority regulating procurement contracts, which has the power to settle disputes in relation to the granting or execution of a procurement contract.

Furthermore, this decree also has the power to have sanctions imposed on the applicants or contractors of a procurement contract for fraud.