Executive Summary

The Islamic Republic of Mauritania, a northwestern African country, covers an area larger than New Mexico and Texas combined (approximately 398,000 square miles). Historically, Mauritania has been relatively open to foreign direct investment, especially in the mining, hydrocarbon, agriculture and fishing sectors. In June 2012, to encourage further investment, the government updated provisions in the Investment Code to enhance the security of investments and facilitate administrative procedures. The Code provides for free repatriation of foreign capital and wages for foreign employees. In 2014, the government of Mauritania amended the Hydrocarbon Code to provide more incentives that favor foreign investment in the hydrocarbon sector. In 2015, Mauritania adopted a new Fisheries Strategy to ensure transparency and sustainable fishing practices in the sector. The following year, Mauritania adopted the new Fisheries Transparency Initiative (FiTI). In 2017, the government created an intergovernmental committee in charge of implementing FiTI benchmarks across government offices. In 2018 Mauritania joined the African Continental Free Trade Area. The agreement is touted by the African Union as encompassing a market of 1.2 billion people, and a gross domestic product of USD 2.5 trillion.

The Mauritanian Civil and Commercial Codes include legislation that protects contracts, although court enforcement and dispute settlement are often challenging. The judicial system remains weak, unpredictable, and inefficient in its application of the law. Judges lack training and specialized experience in commercial and financial law. Familial, political, and tribal considerations too often trump commercial law in judicial decision-making. Despite Mauritania’s open policy towards foreign direct investment, certain jobs in key sectors must be filled by Mauritanian nationals.

The tax system remains opaque. Over the last two years the rate of tax collection has increased, although in a targeted manner. Tax rates on businesses start at 25 percent on profits and two percent on revenue; moreover, the procedures required to pay taxes lack transparency and are time-consuming. One American business has faced retaliatory tax bills when they sought, in good faith, to follow the law’s provisions. When commodity prices decrease, the government becomes more aggressive in tax collection efforts in an effort to bail out government owned enterprises and fill gaps in the budget. For instance, we saw government collection efforts increase dramatically when iron ore hit a low at the end of 2015. As the iron ore price recovers, however, we see the government’s aggressive attitude towards tax collection to mellow.

Labor laws and conditions of employment are complex, encouraging private entities to opt for annual labor contracts over permanent employment. Terms of employment limit companies’ ability to hire and dismiss employees freely. Likewise, while environmental, health, and safety laws and policies exist on paper, they are costly to implement and are rarely or inconsistently enforced.

In 2015, Mauritania adopted an improved anti-slavery law that more clearly defines the practice and raises the penalties for those convicted. In 2018, the Anti-Slavery Court of Nouadhibou sentenced three people to 10 - 20 years in prison for slavery crimes.

During the reporting period of 2017, we noticed trending interest in the Mauritanian hydrocarbon sector by international oil and gas firms including American firms and service providers. Currently, BP, Kosmos, and ExxonMobil have acquired exploration licenses offshore of Mauritania.

Corruption remains a concern. During the July 2009 presidential election, President Mohamed Ould Abdel Aziz launched an anti-corruption campaign. In 2014 it was renewed and has resulted in the imprisonment of several officials and business leaders. Though corruption remains an issue, international companies generally cite insufficient access to credit, an underdeveloped infrastructure, a lack of skilled labor, and inconsistent application of laws as the main impediments when investing in Mauritania.

The overall investment climate in Mauritania remains challenging for U.S. and other foreign investors. The Mauritanian government continues to encourage foreign direct investment, but a weak judicial system, opaque tax laws, complicated labor laws, a fragile political system, an underdeveloped infrastructure, and a lack of skilled labor remain major challenges to foreign investors in Mauritania.

While we see Mauritania taking steps to improve the business environment, we note that greater governmental resources will be needed to bring about long term gains.

Table 1

Measure	Year	Index/Rank	Website Address
TI Corruption Perceptions Index	2017	143 of 180	http://www.transparency.org/ research/cpi/overview
World Bank’s Doing Business Report “Ease of Doing Business”	2018	150 of 190	http://www.doingbusiness.org/rankings
Global Innovation Index	2017	N/A	http://www.globalinnovationindex.org/ content/page/data-analysis
U.S. FDI in partner country (M USD, stock positions)	2016	USD 2	http://www.bea.gov/ international/factsheet/
World Bank GNI per capita	2017	USD 1,120	http://data.worldbank.org/ indicator/NY.GNP.PCAP.CD

1. Openness To, and Restrictions Upon, Foreign Investment

Policies Towards Foreign Direct Investment

Historically, Mauritania has been relatively open to foreign direct investment (FDI). High level government officials in Mauritania tend to explicitly express their ambition to improve the business climate in order to attract more FDI, particularly from the United States. Local, reputable businesses in the private sector frequently express interest in representing U.S. companies, and the number doing so is growing. There is no law prohibiting or limiting foreign investment, which can target any sector of the economy. There are no laws or regulations specifically authorizing private firms to adopt articles of incorporation or association, which limit or prohibit foreign investment, participation, or control. There are no other practices by private firms to restrict foreign investment. The current government, first elected in July 2009 and then re-elected in June 2014, has prioritized recruiting foreign investment in all sectors of the economy. It is working closely with the International Monetary Fund (IMF), the World Bank, and the international donor community to improve basic infrastructure and to update laws and regulations. In 2012, the government adopted a revised Investment Code and created the Office of Promotion of the Private Sector (OPPS) to promote and monitor investment. Currently, prospective investors are required to obtain an Investment Certificate by presenting their proposal and all required documents to the OPPS. The government tends to maintain on ongoing dialogue with investors through formal business conferences and meetings.

Limits on Foreign Control and Right to Private Ownership and Establishment

All domestic or foreign entities are allowed to engage in all forms of remunerative activities, except activities involving selling pork or alcohol. There are no limits of transfer of profit or repatriation of capital, royalties, or service fees, provided the investments were authorized and made through approved banks. The Government of Mauritania practices mandatory screening of foreign investments. These screening mechanisms are routine and non-discriminatory. The OPPS’ (Guichet Unique) provides the review for all sectors, except the petroleum and mining sectors, which require approval from a c********et meeting led by the president.

Other Investment Policy Reviews

The latest investment policy review occurred in February 2008, when the United Nations Conference on Trade and Development (UNCTAD) published an investment policy review of Mauritania. The Review is available online, in French, at: http://unctad.org/en/Docs/iteipc20085_fr.pdf. The report recommends that the Government of Mauritania to diversify the economy, improve its investment potential through increasing revenue generated by the exploitation of natural resources, accelerate required reforms, and enhance the business and investment climate.

In 2011, Mauritania underwent a World Trade Organization (WTO) trade policy review. The report is available online at http://www.wto.org/english/tratop_e/tpr_e/tp350_e.htm. The report states that, since 2002, the government has undertaken few reforms in the areas of customs, trade, or investment regulations. The report also highlights lack of transparency as a deficiency. These policy reviews led to the release of the revised Investment Code in June 2012 to improve transparency in the government procurement process.

Business Facilitation

The government continues to amend its laws and regulations to facilitate business registration. The office of the Guichet Unique is the country investment promotion agency that facilitates business registration and encourages FDI. In 2016 Mauritania made starting a business easier by eliminating the minimum capital requirement. And in 2017, trading across borders was made easier by upgrading the SYDONIA World electronic system, which reduced the time for preparation and submission of customs declarations for both exports and imports. It can take up to 10 days to register a business in Mauritania.

Outward Investment

Government incentives toward promoting outward investment remain limited. Mauritania’s major exports are iron Ore (46 percent), non-fillet frozen Fish (16 percent), and gold (11 percent). China, France, Spain, Japan, and the United Arab Emirates are the main trade partners. There are no investment restrictions on domestic investors from investing abroad.

2. Bilateral Investment Agreements and Taxation Treaties

Mauritania has bilateral investment agreements with the Arab Maghreb Union (Algeria, Libya, Morocco, and Tunisia) as well as with Saudi Arabia, France, Belgium, and Romania. Also, agreements exist with Burkina Faso, Cameroon, The Gambia, Ghana, Mauritius, Italy, Lebanon, Qatar, Yemen, Korea, and Egypt.

Mauritania is a signatory to the Cotonou Agreement between the European Union (EU) and the group of African, Caribbean and Pacific (ACP) countries, and thus enjoys free access to the EU market. Due to its least-developed country status, Mauritania also benefits from duty-free access to the European market under the Everything-But-Arms initiative.

Mauritania does not have a bilateral investment agreement or bilateral taxation treaty with the United States. However, Mauritania benefits from the African Growth and Opportunity Act (AGOA) and thus enjoys substantial potential trade preferences that, along with those under the Generalized System of Preferences (GSP), allow marketable goods produced in Mauritania to enter the U.S. market duty-free.

3. Legal Regime

Transparency of the Regulatory System

The government has adopted laws that have furthered transparency during recent years. In 2016, the government approved a new anti-corruption bill, which aims to introduce the provisions of the UN Convention Against Corruption in the Mauritanian judicial system so that it is consistent with international standards. In 2017, the government approved the new anti-discrimination law aimed at tackling discrimination. In 1999, the government created a regulatory authority that is charged with overseeing the privatization process and ensuring that transparent policies and laws are used to foster competition through the bidding process. There is no law or policy in place that impedes foreign investment in Mauritania. In practice, ownership in many sectors of the economy is concentrated among a few tribal affiliates. They have significant oligopolistic power, which is reinforced by formal and informal regulatory barriers.

While the government is moving to streamline bureaucratic procedures for investment, difficulties remain. There is a complex and often overlapping system of permits and licenses required to do business. In the “Ease of Starting a Business” portion of the World Bank’s 2018 Doing Business profile, Mauritania ranked 150 out of 189 countries. There continues to be a lack of transparency in the legal, regulatory, and accounting systems, which do not meet international norms. Proposed laws and regulations are supposed to be published in draft form for public comment before being sent to the National Assembly, but this does not always occur. There are no informal regulatory processes managed by nongovernmental organizations or private sector associations and laws and regulations do not discriminate against foreign investment.

In 2011, the government promulgated two orders to regulate accounting practices of nongovernmental and private entities, which must now have reputable financial management and submit periodic reports of financial transactions. All such entities must also have a local bank account with an identifiable account number and address. As of 2018, these orders are inconsistently followed and were not enforced by the government.

In 2018, the Mauritanian government continues to make meaningful progress in implementing the EITI standard.

International Regulatory Considerations

Mauritania is a member of the Arab Maghreb Union (Algeria, Libya, Morocco, and Tunisia) economic trade block. In 2017, Mauritania and Economic Community of West African States (ECOWAS) countries signed an Association Agreement aimed towards allowing free flow of goods in the region. Mauritania has also been a member of the World Trade Organization (WTO) since May 31, 1995. The country however is in a transitional stage regarding its commitments. It is currently engaging the WTO to ensure it makes progress towards complete compliance with required commitments.

Legal System and Judicial Independence

The Mauritanian judicial system combines French and Islamic (Malikite rite) judicial systems. The constitution guarantees the independence of the judiciary (Article 89), and an organic law also protects judges from undue influence. Civil and Commercial Codes exist and are designed to protect contracts, although court enforcement and dispute settlement can be difficult. The judicial system remains weak and unpredictable in its application of the law, due in part to the training judges receive in two separate and distinct legal systems: Shari’a law and laws modeled after the French legal system. Judges remain undercompensated and susceptible to tribal pressures and bribery. Specialized commercial law courts exist, but judges lack training and experience in commercial and financial law. Some judges may only have formal training in the Shari’a legal system, while others are only familiar with the French civil law system. A lack of standardization of applicable legal knowledge in the judiciary leads to inefficiency in the execution of judgments in a timely and efficient manner.

Many laws and decrees related to the commercial and financial sectors are not readily available and therefore not well understood. Access to laws and legal texts that have been published can be equally challenging. Other laws, in particular some governing the financial sector, are out of date. Most judgments are not issued within prescribed time limits and records are not always well kept. Judgments of foreign courts are recognized by local courts, but enforcement is limited. During the last few years, the government has taken steps to provide training to judges and lawyers as an attempt to professionalize the system.

Laws and Regulations on Foreign Direct Investment

There are no new major investment laws or judicial decisions ratified last year. The investment Code, last updated in June 2012, was designed to encourage direct investment, by enhancing the security of investments and facilitating administrative procedures. The code provides for free repatriation of foreign capital and wages for foreign employees. The code also created free points of importation and export incentives. Small and medium enterprises (SME), which register through OPPS (one-stop-shop), do not pay corporate taxes or customs duties. The Code also created Special Economic Zones to encourage regional development. Separately, the Nouadhibou Free Zone was created with its own regulatory scheme more favorable to foreign investment. The Civil and Commercial Codes protect contracts, although court enforcement and dispute settlement can be difficult.

Competition and Anti-Trust Laws

The Ministry of Economy’s office of “Commission de Passation des Marches des Secteurs de l'Economie et Finance” (www.cmsef.mr) is the government agency that reviews tender bids in accordance with the law and regulations. Suppliers for large government contracts are selected through a tender process initiated at the ministry level. Invitations for tenders are publicly announced in local newspapers and on government websites. After issuing an invitation for tenders, the Ministry of Economy’s commission in charge of reviewing tenders selects the offer that best fulfills government requirements. If two offers, i.e., one from a foreign company and one from a Mauritanian company, are otherwise considered equal, statutes require that the government award the tender to the Mauritanian company. In practice, this has resulted in tenders being awarded to companies that have strong ties to government officials and tribal leaders, regardless of the merits of an individual offer. Preferential treatment remains common in government procurement, despite the government’s recent efforts to promote transparency in the public sector. Government officials and tribal leaders reportedly receive frequent favors, such as unauthorized exemption from taxes, fishing licenses, special grants of land, and favorable treatment during bidding on government projects.

Expropriation and Compensation

The revised Investment Code provides more property guarantees and protection. The Code protects private companies against nationalization, expropriation, and requisition. However, if a foreign enterprise is facing difficulties, the Mauritanian government can propose an expropriation plan in order for the company to avoid bankruptcy and to protect jobs of local employees, with fair and equitable compensation, which is exempt from duties and taxes (per Article 4 and 5.1.c.)

The only known case of expropriation since Mauritania’s independence in 1960 was the nationalization of the French mining company MIFERMA in November 1974, the largest employer and hard currency earner in the country. In that case, the two parties agreed on a compensation plan.

The Mauritanian government guarantees companies that the tax, custom, and legal regulations in force at the time of issuance of an Investment Certificate will remain applicable to them for a period of 20 years. Likewise any favorable changes to the corporate tax or customs laws during that guaranteed period of time will be applied to the investor.

Dispute Settlement

ICSID Convention and New York Convention

In 1966, Mauritania ratified the Convention on the settlement of investment disputes between States and nationals of other States. In 1997, Mauritania became a signatory to the convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958 New York Convention). However, there is no specific legislation to ensure enforcement.

Investor-State Dispute Settlement

Mauritania does not have a bilateral investment agreement with the United States. The most recent investment dispute between the Mauritanian government and a foreign investor occurred in 2006 over production-sharing contracts (PSC) signed in 2003 with former President Taya’s government. A successor government lodged a dispute over four amendments to the original PSC involving oil revenues and environmental issues. An international arbiter was brought in and ruled in the government’s favor.

Judgments of foreign courts are accepted by the local courts, but enforcement is inadequate.

International Commercial Arbitration and Foreign Courts

Judgments of foreign courts are not consistently applied. The government accepts international arbitration of investment disputes between foreign investors and government authorities. Judgments of foreign courts are accepted by the local courts, but enforcement is limited. There are also domestic mechanisms for arbitration, both through traditional religious institutions and through the courts. Previously, issues were referred to the International Center for Settlement of Investment Disputes (ICSID), of which Mauritania became a contracting state in 1965.

Settling a dispute through the courts remains a long and complicated process. Inadequate laws and poor administration remain the key source of legal disputes encountered in the country. The duration of investment disputes are subject to numerous appeals before reaching a final verdict. Though the government is looking for ways to streamline the system by providing training to judges and lawyers, the court procedures are currently long and complicated.

In 2017 the government passed a new small claims law specifically for cases valued at less than USD 11,000. This new law aims to reduce the backlog and work through cases in a more efficient manner.

Though there are no recent reports on disputes involving State-Owned Enterprises (SOE), the likelihood that domestic courts would favor SOEs during a dispute remains of eminent concern.

Bankruptcy Regulations

The country has bankruptcy laws which carry the potential for criminal penalties. Mauritania’s bankruptcy laws were last updated in 2001. The bankruptcy law allows for the reorganization or restructuring of a business. There are very few reported cases of these laws being applied.

4. Industrial Policies

Investment Incentives

Investment incentives such as free land, deferred and reduced taxes, and tax-free importation of materials and equipment are available to encourage foreign investors. The Ministry of

Economy and Finance offers tax benefits, including exemptions in some instances, to enterprises in Special Economic Zones and some companies in priority sectors throughout the country. The Investment Code outlines standard investment incentives, but foreign investors may negotiate other incentives directly with the government.

Foreign Trade Zones/Free Ports/Trade Facilitation

The new Investment Code creates Special Economic Zones (Free Export Zone or Cluster of Development in the Interior) by decree. Each decree specifies the restrictions of each target area, the name of the zone, the subject of economic activities that are encouraged, the structure responsible for its management, and the period for which it is established. Free Zones are subject to continuous monitoring by the Customs Service in a manner specified in the decree. Nouadhibou, the commercial capital, has been designated as a Free Economic Zone by the government. The Nouadhibou Free Economic Zone has its own regulatory structure, which is not yet fully implemented. As of January 2017, the Nouadhibou free trade zone has granted 400 authorizations for companies, primarily in the tourism and fisheries sectors.

The new Investment Code provides three main preferential tax regimes: Small and Medium Enterprises Regimes, which apply to any investment between USD 167,000 and USD 667,000; Free Export Zones/Clusters of Development; and Targeted Industries, which includes agriculture, artisanal fishing, tourism, renewable energy, and raw material processing. In the previous Code, only one special economic zone existed for certain imports, under the control of the Customs Administration. The revised Code has several other new provisions. Basic infrastructure will be provided through public-private partnerships with the government and the interested company, which previously was solely the responsibility of the private company. Land concessions allocated to companies located in Free Economic Zones will follow a rental rate determined by joint decision of the relevant Minister and the Minister of Finance, who will control land prices. As for tax advantages, companies will be exempt from taxes, excluding personnel taxes such as for retirement and social security, if they have invested at least USD 1.6 million and generated at least 50 permanent jobs, and show a potential to export at least 80 percent of their goods or services.

Additionally, under the provisions in the revised Investment Code, companies will not be taxed on patents, licenses, property, or land, but rather assessed a single municipal tax that cannot exceed an annual amount of USD 16,000. Companies established in free zones are exempt from taxes on profits for the first five years in which they show a profit, after which they are subject to the rate of ordinary law. Additionally, companies established in free zones benefit from a total exemption of customs duties and taxes on the importation of goods, materials, and vehicles intended for production (the list of eligible assets is fixed by order of the Minister of Finance) and exemption from customs duties and taxes on exports.

Performance and Data Localization Requirements

The government mandates that companies may employ expatriate staff in no more than 10 percent of key managerial staff positions, in accordance with the Labor Code and are required to have a plan in place to “Mauritanize” expatriate staff positions. Expatriate staff may be hired in excess of 10 percent with authorization from the appropriate industry authority by establishing that no competent Mauritanian national is available for the vacancy. Foreign companies are required to transfer skills to local employees by providing free training for lower-skilled jobs. However this does not apply to companies operating within the Nouadhibou Free Trade Zone Authority.

Current immigration laws do not discriminate nor are they considered to apply excessively onerous visa, residence, or work permit requirements inhibiting foreign investors’ mobility. However, some U.S. companies have expressed frustration with the difficulty in obtaining or renewing visas and residency permits. Procedures and validity can change with little or no notice or explanation. A visa from the Mauritanian Embassy may take up to three months to be issued. Length of validity and number of entries are inconsistently accorded.

The government has been known to impose performance requirements as a condition for establishing, maintaining, or expanding an investment, or for access to tax and investment incentives. Foreign investors consistently report that government-sponsored requests for tenders lack coherence and transparency. The revised Investment Code requires investors to purchase from local sources if the good or service is available locally and is of the same quality and price as could be purchased abroad. There is no requirement for investors to export a certain percentage of output or have access to foreign exchange only in relation to their exports. If imported “dumped” goods are deemed to be competing unfairly with a priority enterprise, the government will respond to industry requests for tariff surcharges, thus providing some potential protection from competition.

Expatriate staff members working for companies in accordance with the Labor Code are eligible to import, free of customs duties and taxes, their personal belongings and one passenger vehicle per household, under the regime of exceptional temporary admission (Admission Temporaire Exceptionelle, or ATE). All sales, transfers, or withdrawals are subject to permission of customs officials.

The Mauritanian government does not have any requirements or a mechanism that impedes companies from transmitting data freely outside the country.

5. Protection of Property Rights

Real Property

Property rights are protected under the Mauritanian Civil Code, which is modeled on the French code. In practice, however, it can be difficult to gain redress for grievances through the courts. Mortgages exist and are extended by commercial banks. There is a well-developed property registration system for land and real estate in most areas of the country, but land tenure issues in southern Mauritania, particularly the area along the Senegal River, are the subject of much controversy. For example, in January 2014, rural communities around Boghe (300 kilometers southeast of Nouakchott) denounced as expropriation the signing of an agreement with the Saudi Arabian Al Rajhi Bank that granted permission for the Bank to cultivate 31,000 hectares in Brakna and Trarza provinces. Investors should be fully aware of the history of the lands they are purchasing or renting, and should verify that the local partner has the proper authority to sell/rent large tracts of land—particularly in this region—before agreeing to any deals. In 2015, the Ministry of Economy and Finance established a computerized system to provide more transparent land allocation. All information regarding the property titles is available at the Land Registry Agency housed at the Ministry of Habitat, including information related to mortgages and other tax related matters. The Land Registry Agency performs due diligence prior to making the final title transfer. To register a property, owners only need to have their notarized sale agreement along with the title certificate.

Intellectual Property Rights

The legal protection of intellectual property rights (IPR) is still a relatively new concept in Mauritania, and those seeking legal redress for IPR infringements will find very little historical record of cases or legal structures in place to support such claims. There is no separate judicial circuit that specializes in intellectual property rights.

Mauritania is a member of the Multilateral Investment Guarantee Agency (MIGA) and the African Organization of Intellectual Property (OAPI). In joining the latter, member states agree to honor intellectual property rights principles and to establish uniform procedures of implementation for the following international agreements: the Paris Convention for the Protection of Industrial Property, the Berne Convention for the Protection of Literary and Artistic Works, the Hague Convention for the Registration of Designs and Industrial Models, the Lisbon Convention for the Protection and International Registration of Original Trade Names, the World Intellectual Property Organization, the Washington Treaty on Patents, and the Vienna Treaty on the Registration of Trade Names. Mauritania signed and ratified the WTO TRIPS (Trade Role on Intellectual Property and Service) agreement in 1994, but it has yet to implement it. The government also signed and ratified the WIPO (World Intellectual Property Organization) treaties in 1976. It has not signed or ratified the WIPO Internet treaties. The government however is in the process of launching reforms related to property, product certification, and accreditation bodies to protect IPR. The Agency for Consumer Protection, housed at the Ministry of Commerce, is in charge of quality control and the prevention of sales of counterfeit goods in local markets, but its capabilities to track and enforce its regulations are very constrained.

Mauritania is not listed on the USTR’s 2017 Out-Of-Cycle Review of Notorious Markets, or in the 2018 Special 301 Report. For additional information about treaty obligations and points of contact at local IP offices, please see WIPO’s country profiles at http://www.wipo.int/directory/en/

6. Financial Sector

Capital Markets and Portfolio Investment

In accordance with Article 3.1 of the Investment Code, the Government of Mauritania guarantees any individual or legal entity wishing to undertake business activities in the country the freedom of establishment in accordance with laws and regulations. Private entities, whether foreign or national, have the right to freely establish, acquire, own, and/or dispose of interests in business enterprises and receive legal remuneration. Privatization and liberalization programs have also helped put private enterprises on an equal footing with respect to access to markets and credit. In principle, government policies encourage the free flow of financial resources and do not place restrictions on access by foreign investors. Most foreign investors, however, prefer external financing due to the high interest rates and procedural complexities that prevail locally. Credit is often difficult to obtain due to a lax legal system to enforce regulations that build trust and guarantee credit return. There are no legal or policy restrictions on converting or transferring funds associated with investments. Investors are guaranteed the free transfer of convertible currencies at the legal market rate, subject to the availability. Similarly, foreigners working in Mauritania are guaranteed the prompt transfer of their professional salaries.

Commercial bank loans are virtually the only type of credit instrument. There is no stock market or other public trading of shares in Mauritanian companies. Currently, individual proprietors, family groups, and partnerships generally hold companies, and portfolio investment is accordingly quite limited.

Money and Banking System

The IMF has in the past assisted Mauritania with the stabilization of the banking sector and access to domestic credit has become easier and cheaper. A proliferation of banks has fostered competition that has contributed to the decline in interest rates from 30 percent in 2000 to 10 percent in 2009, not including origination costs and other fees. Interest rates have remained stable since 2009, ranging between 10 to 17 percent as of April 2018.

The banking system is stable but fragile. In 2017, GDP growth is estimated at 3.5 percent, up from 2.0 percent in 2016 and 1.4 percent in 2015. Nevertheless, this rebound remains fragile as liquidity constraints in the financial market, arising from fiscal consolidation and an ineffective monetary policy, continue to dampen liquidity in the banking sector. The country’s five largest banks are estimated to have USD 100 million in combined reserves; however, these figures cannot be independently verified, making an evaluation of the banking system’s strength impossible. As of April 2018, 25 banks, national and foreign, currently operate in Mauritania, despite the fact that only some 15 percent of the population holds bank accounts. The Central Bank of Mauritania is in charge of regulating the Mauritanian banking industry, but it has exercised little power to demand information or compliance from the banks. The Ministry of Finance mandates that the Central Bank perform yearly audits of Mauritanian banks, but auditors have sometimes been refused entry and access. There are no restrictions in terms of foreigners who wish to obtain an individual or business banking account.

In 2017, the Central Bank significantly reduced direct foreign currency sales to the private sector to better enforce foreign exchange regulations as part of its drive to allow for a more flexible determination of the exchange rate. In 2018, the Central Bank of Mauritania lost all correspondence banking relationships with banks in the United States. This occurred as a result of de-risking policies enforced by U.S. banks.

Foreign Exchange and Remittances

Foreign Exchange Polices

There are no legal or policy restrictions on converting or transferring funds associated with investments. Investors are guaranteed the free transfer of convertible currencies at the legal market rate, subject to the availability of such currencies. Similarly, foreigners working in Mauritania are guaranteed the prompt transfer of their professional salaries. To transfer funds, investors are required to open a foreign exchange bank account in Mauritania. There are no maximum legal transaction limits for investors transferring money into or out of Mauritania, although regulations to withdraw money may be complicated in practice.

The local currency, the “Ouguiya,” is freely convertible within Mauritania, but its exportation is not legally authorized. Hard currencies can be obtained from the informal market as well as local commercial banks, provided the banks have the requested sum on hand. The Central Bank holds regular foreign exchange auctions, allowing market forces to fix the value of the ouguiya. Individuals and companies may obtain hard currency through the informal market and commercial banks for the payment of purchases or the repatriation of dividends. If the bank has hard currency available, there is no delay in effect for remitting investment returns. However, if the bank does not have sufficient reserves, the hard currency must be obtained from the Central Bank in order to conduct the transfer. The Central Bank is required to prioritize government transfers, which could present further delays. Delays of one to three weeks, although relatively uncommon, have been reported. Between January 2016 and September 2017, nominal depreciation reached 5.8 percent, bringing the exchange rate closer to its medium-term equilibrium.

In January 2018, the government of Mauritania introduced a new currency. The new currency drops a zero from the country’s old currency; however, the value and the name of the currency remain unaffected by the change. The banking institutions had to adapt their software, change their checkbooks, and reconfigured their ATMs to bring them into compliance with the new currency.

Remittance Policies

There are no legal parallel markets in Mauritania that would allow investors to remit investments through other means. There is no limit on the inflow or outflow of funds for remittances of profits, debt service, capital or capital gains.

Businesses transfer money through the traditional Hawala system—they deposit their money in a Hawala store operator to a designated beneficiary for pick up. The Hawala system has become a reliable substitute to the high interest rate, long wait period and transaction fees imposed by local banks.

In 2017 the central bank was very interventionist on the exchange rate markets. To deal with pressures on liquidity and exchange rate, and in the absence of monetary policy instruments, the central bank resorted to rationing by not sterilizing operations and imposing caps on supply and prices of foreign exchange while mandating banks to remit their foreign exchange earnings.

Sovereign Wealth Funds

The Central Bank administers the National Fund for Hydrocarbon Reserves, a sovereign wealth fund (SWF), which was established in 2006. The SWF is funded from the revenues received from the extraction of oil, any royalties and corporate taxes from oil companies, and from the profits made through the fund's investment activities. The fund’s mandate is to create macroeconomic stability by setting aside oil revenues for developmental projects. However, the fund's management is considered to lack transparency and the projected revenue streams remain unrealized.

7. State-Owned Enterprises

SOEs and the parastatal sector in Mauritania represent an important portion of the economy. They have an impact on employment, service delivery, and most importantly fiscal reserves given their size in the economy and state budget. However, they are constrained by weak institutional capacity and lack of reliable available data. In recent years, parastatal companies and SOEs have experienced significant business and financial problems in terms of increasing levels of debt, operational losses, and payment delays. This increase in fiscal reserve risk has led the government to provide subsidies to SOEs.

In 2017, the government announced its plan to privatize its giant SOE Company, SONIMEX (La Societe Nationale d'Importation et d'Exportation). SONIMEX is an import/export company involved in food distribution commodities (wheat, rice, tea, sugar, milk, vegetable oil) in Mauritania.

Hard budget constraints for SOEs are written into the Public Procurement Code, but are not enforced. SOMELEC, the state-owned electricity company, has been operating in a precarious financial situation for many years. The company relies on government financial support to remain operational.

Most state-owned enterprises in Mauritania have independent boards of directors. The directors are usually appointed based upon political affiliations; however, you will find some who are qualified for their positions.

There are about 120 SOEs and parastatal companies operating in the commercial sector with engagements in a wide range of sectors including energy, network utilities, mining, petroleum, telecommunications, transportation, commerce, and fisheries. Parastatal and wholly owned SOEs remain the major employer in the country. This includes the National Mining Company (SNIM), which is by far the largest Mauritanian enterprise and the second largest employer in the country after public administration.

The publically available financial information on parastatal and wholly owned SOEs is incomplete and outdated, with the exception of budget transfers. There is no publication of the expenditures SOEs allocate to research and development. In addition, they execute the largest portion of government contracts, receiving preference over the private sector. According to the Public Procurement Code, there are no formal barriers to competition with SOEs. However, informal barriers such as denial of access to credit and/or land exist.

Privatization Program

Not applicable.

8. Responsible Business Conduct

Historically, there has been little local awareness of corporate social responsibility in Mauritania, either on the part of producers or consumers. However, awareness is growing, particularly as more foreign-owned companies enter the Mauritanian market. Certain state-run industries have been active in providing basic educational and training opportunities for the children of their employees and scholarships for their employees to study abroad, but this is usually the extent of social responsibility initiatives. Companies in the mining and hydrocarbon industries send young Mauritanians overseas to complete their studies on scholarship programs; many of the scholarship recipients have family ties to powerful individuals in the companies. The larger fishing companies have recently started to provide more opportunities for qualified youth to study at the fishing and naval training school in Nouadhibou to prepare them for careers in the fishing industry. Current projects by foreign-owned companies include providing free water to local communities; building vocational training centers, health clinics, and roadways; and providing healthcare equipment and medicines to towns near company operations.

Since 2011, three of Mauritania’s largest mining companies—Kinross, Mauritanian Copper Mines (MCM), and SNIM—fund a School of Mining with the goal of increasing the number of qualified Mauritanians to serve in the mining industry. The school has a partnership with the Ecole Polytechnique in Montreal and with the mining companies. The school is considered a public entity under the Ministry of Oil, Energy, and Mines. In 2017, Kosmos Energy provided financial support to the national Diawling Park in the southern part of country.

9. Corruption

Despite the current push to fight corruption, wealthy business groups and government officials reportedly receive frequent favors from authorities, such as unauthorized exemption from taxes, special grants of land, and favorable treatment during bidding on government projects. Mauritanian and non-Mauritanian employees at every level and in every organization are believed to flout Mauritanian tax laws and filing requirements. The only exceptions are civil servants, whose income taxes are automatically deducted from their pay. Such widespread tax evasion and corruption has deprived the government of a significant source of revenue, weakening its capacity to provide necessary services. In 2009, the government passed a law requiring all high-ranking government employees to publicly declare their assets, although this law is not fully enforced.

In the July 2009 presidential election, President Aziz ran on an anti-corruption and populist platform. Donor partners applauded the release of the first-ever Mauritanian anti-corruption strategy in November 2009, and a number of high-profile anticorruption cases have demonstrated at least nascent efforts to fight corruption. As of April 2017, about 20 individuals have been detained on embezzlement and corruption charges. Although progress has been made, laws and regulations are still not evenly and effectively enforced, largely because corruption is endemic in a society that is still largely based on familial and tribal relationships rather than strict adherence to the rule of law.

Corruption is an obstacle to foreign direct investment in Mauritania, but firms generally rate access to credit, an underdeveloped infrastructure, and a lack of skilled labor as even greater impediments. Corruption is most pervasive in government procurement, bank loans, fishing license attribution, land distribution, access to port facilities and tax payments. Giving or accepting a bribe is a criminal act punishable by two to 10 years imprisonment and fines up to USD 700, but there is little application of this law. Firms commonly pay bribes to obtain telephone, electricity, and water connections, and construction permits more quickly.

There are several organizations that track corruption within Mauritania. Transparency International has a representative who reports on local corruption policies and events.

In practice annual auditing of government accounts are not enforced and therefore rarely conducted. However, the government rectified previously misreported financial data in an effort to be more transparent, such as publishing quarterly financial statements on a government treasury website www.tresor.mr.

In April 2016, a new anti-corruption bill was introduced to address the provisions of the UN Convention Against Corruption and to provide protection to NGOs involved in investigating corruptions cases. Corruption is most pervasive in government procurement, bank loans, fishing license attribution, land distribution, tax payments, and mining licenses.

Resources to Report Corruption

Contact at government agency or agencies are responsible for combating corruption:

Cour Des Comptes Mauritanie
Email [email protected]
Telephone: +222 4525 34 04
Fax: +222 4525 49 64

Contact at "watchdog" organization:

“Publiez ce que vous payez” (Publish What You Pay)
Executive Office
+222 4525-0455
+222 4641-7702

10. Political and Security Environment

Mauritania is a highly centralized Islamic Republic with a president as head of state and a constitution grounded in French civil law and sharia (Islamic law). The Senate and National Assembly exercise legislative functions but were weak relative to the executive.

Mauritania has a strong authoritarian tradition. Coups d’etat have served as the usual means of changing its government. There has never been a transition from one democratically elected president to another. After taking power via a coup in 2008, General Mohamed Ould Abdel Aziz ran as a civilian candidate and won in the generally free and fair elections that took place in July 2009. In 2014, he was re-elected for a second and final term in office, which ends in 2019. Tawassoul, an Islamist party with links to the Muslim Brotherhood, leads the political opposition in parliament.

The ruling party, some minor allied parties, a small moderate opposition party, and several micro-parties, some unregistered, participated in a “National Political Dialog” held in Nouakchott 29 September through 20 October 2016. All the major hardline opposition parties declined to participate. The final document, which called for some constitutional reforms, including the abolition of the Senate (an indirectly elected body) and changes to the National Anthem and Flag was rejected by the Senate on March 17, 2017. Thirty-three senators, out of a total of fifty-six, voted against the amendment package after lawmakers in the lower house (National Assembly) passed the same proposal by 121 votes to 19 on March 9, 2017.

While Al-Qaeda in the Islamic Maghreb (AQIM) has perpetrated a number of terrorist attacks in Mauritania, the last attempted attack was in 2011, when the Mauritanian military successfully countered a would-be truck-bomb near Nouakchott. Previous attacks included the murder of a U.S. citizen in Nouakchott in 2009 and kidnappings and murders of European citizens. Mauritania successfully prosecuted and sentenced the terrorists involved in the 2009 murder of the U.S. citizen. Also, in 2009, there was a suicide bombing outside the French Embassy and another such attempt in 2010 against a military base in the southeastern city of Nema. The Mauritanian government has remained vigilant since 2011 in its efforts to counter terrorist threats, including in July and October 2011, when it conducted operations against AQIM militants in neighboring Mali. Mauritanian authorities have also arrested and prosecuted terrorists. The Mauritanian judiciary convicted five terrorists in 2013 and 2014, bringing total convictions to 149 since 2009.

The United States, France, Spain, NATO, and others provide assistance and training to Mauritania’s security forces.

11. Labor Policies and Practices

While labor is abundant, there is a shortage of skilled workers and well-trained technical and managerial personnel in most sectors of the economy. As a result, there are few sectors of the economy that use advanced technologies because the skilled labor required to operate them is not readily available. While labor is relatively inexpensive, labor productivity is very low, even compared to neighboring countries. The mining sector is an exception, where the national mining company, SNIM; the subsidiary of a Canadian gold mining company, Kinross-Tasiast; and the subsidiary of a Canadian company, MCM; provide advanced training for their employees. Additionally, responding to the dire need for human capacity development in Mauritania, representatives of these three companies established jointly with the Ministry of Oil, Energy and Mines, a USD 18 million fund for the construction of a mining school in Akjoujt in 2011. Currently, 30 students are enrolled in training at the school. The school is expected to hold 340 students when it is at full capacity.

The law requires that employers give priority to citizens over foreign workers, unless the skills required for the position cannot be filled by the national labor force, especially in security-related fields. In this case the employer should create a plan of “Mauritanization” to transfer skillsets to local workers within a period of two years.

There is no restriction on employers resorting to reducing their workforce in periods of unfavorable market conditions. However the law requires that compensations are granted to laid-off employees.

Mauritania has ratified all eight fundamental conventions of the International Labor Organization (ILO). However, gaps remain both in law and practice. Although the law recognizes the workers' rights to establish and join unions of their own choosing, to collectively bargain, and to conduct legal strikes, miners must notify their employers before exercising the right to organize. Magistrates are prohibited from going on strike or joining labor unions by law, however, they organize through informal internal groups called “Club de Concertation.” The law continues to require that any change in the administration or management of a union must be formally communicated and approved by either the Prosecutor-General or the courts. The Labor Code continues to restrict the right to strike by imposing compulsory arbitration to disputes in non-essential services sectors.

Over 18 percent of children in Mauritania are engaged in child labor in agriculture and herding and in the worst forms of child labor in indentured and hereditary servitude. Cattle and goats are included on the U.S. government's List of Goods Produced by Child Labor or Forced Labor.

Although officially outlawed, de facto slavery continues to exist in Mauritania, particularly in domestic situations and in rural and agricultural settings. Foreign investors should be aware that local suppliers or contractors might – at some point in their supply chain – involve slave labor.

In 2018, the Anti-Slavery Court of Nouadhibou sentenced three people to 10 - 20 years in prison for slavery crimes.

12. OPIC and Other Investment Insurance Programs

Mauritania signed an agreement with Overseas Private Investment Corporation (OPIC), but its program is limited. Potential investors should contact OPIC directly for guidance. Mauritania is a member of the Multilateral Investment Guarantee Agency (MIGA), which protects foreign direct investment against political risk. A British-Mauritanian insurance company, Atlantic Londongate, offers broad commercial coverage.

13. Foreign Direct Investment and Foreign Portfolio Investment Statistics

Table 2: Key Macroeconomic Data, U.S. FDI in Host Country/Economy

	Host Country Statistical Source		USG or International Statistical Source		USG or International Source of Data: BEA; IMF; Eurostat; UNCTAD, Other
Economic Data	Year	Amount	Year	Amount
Host Country Gross Domestic Product (GDP) (M USD)	2012	USD 4,562	2013	USD 4,158	www.worldbank.org/en/country
Foreign Direct Investment	Host Country Statistical Source		USG or International Statistical Source		USG or International Source of Data: BEA; IMF; Eurostat; UNCTAD, Other
U.S. FDI in partner country (M USD, stock positions)	N/A	N/A	2008	USD -3	BEA data available at http://bea.gov/international/direct_investment_ multinational_companies_comprehensive_data.htm
Host country’s FDI in the United States (M USD, stock positions)	N/A	N/A	2008	USD -1	BEA data available at http://bea.gov/international/direct_investment_ multinational_companies_comprehensive_data.htm
Total inbound stock of FDI as % host GDP	N/A	N/A	N/A	N/A	N/A

投资报告：2018年毛里塔尼亚投资环境报告（英文版）

Executive Summary

1. Openness To, and Restrictions Upon, Foreign Investment

2. Bilateral Investment Agreements and Taxation Treaties

3. Legal Regime

4. Industrial Policies

5. Protection of Property Rights

6. Financial Sector

7. State-Owned Enterprises

8. Responsible Business Conduct

9. Corruption

10. Political and Security Environment

11. Labor Policies and Practices

12. OPIC and Other Investment Insurance Programs

13. Foreign Direct Investment and Foreign Portfolio Investment Statistics

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投资报告：2018年毛里塔尼亚投资环境报告（英文版）

Executive Summary

1. Openness To, and Restrictions Upon, Foreign Investment

2. Bilateral Investment Agreements and Taxation Treaties

3. Legal Regime

4. Industrial Policies

5. Protection of Property Rights

6. Financial Sector

7. State-Owned Enterprises

8. Responsible Business Conduct

9. Corruption

10. Political and Security Environment

11. Labor Policies and Practices

12. OPIC and Other Investment Insurance Programs

13. Foreign Direct Investment and Foreign Portfolio Investment Statistics

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