3. Legal Regime
Transparency of the Regulatory System
The government continues to adopt laws and regulations to improve transparency. During the review period, the government made accounting budget bills widely and easily accessible to the general public, including online. The accounting documents provided a substantially complete picture of the government’s planned expenditures and revenue streams, including natural resource revenues. Budget documents were prepared generally according to internationally accepted principles. The government holds full authority in allocating natural resources licenses and manages bulk of its revenues. The criteria and procedures by which the government awards natural resource extraction contracts or licenses are specified in Mauritania’s investment code, mining code, and a new hydrocarbon law. Basic information on tenders are publicly available on government websites. There is no law or policy impeding foreign investment in Mauritania.
The government is moving to streamline bureaucratic procedures for investment. In 2019, the government began to make meaningful progress in implementing the EITI standard.
However, there is a complex and often-overlapping system of permits and licenses required to do business. There continues to be a lack of transparency in implementation of the legal, regulatory policies.
Post is not aware of any informal regulatory processes managed by nongovernmental organizations or private sector associations, and laws and regulations do not discriminate against foreign investment.
International Regulatory Considerations
See section 2 – Bilateral Investment and Taxation Treaties.
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 sometimes 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. Laws and decrees related to commercial and financial sectors exit. However, they are not always publicly available.
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 to reduce the backlog and work through cases in a more efficient manner. In 2017, the Government passed a new small claims law that covers cases valued at less than USD 11,000. In January 2020, the government opened a new international center for mediation and arbitration. The center provides an alternative legal office for settlement of investment disputes and allows arbitration and mediation from international courts
Laws and Regulations on Foreign Direct Investment
There are no new major investment laws or judicial decisions ratified last year. However, to streamline procedure the government launched a new ministry in charge of investment 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 (“Guichet Uniquie” one-stop-shop), do not pay corporate taxes or customs duties.
Competition and Anti-Trust Laws
The Ministry of Economy’s office of “Commission de Passation des Marches des Secteurs de l’Economie et Finance” (Procurement Commission of the Economic and Finance Sectors, 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 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.
Expropriation and Compensation
The revised Investment Code provides more property guarantees and protection to business owners. The Code protects private companies against nationalization, expropriation, and requisition. However, if a foreign enterprise is facing difficulties, the government can propose an expropriation plan to avoid bankruptcy and to protect jobs of local employees, with fair and equitable compensation.
The only known case of expropriation since Mauritania’s independence was the nationalization of the French mining MIFERMA in November 1974. In that case, the two parties agreed on a compensation plan.
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
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.
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. In the past, issues were referred to the International Center for Settlement of Investment Disputes (ICSID), of which Mauritania became a member in 1965.
Settling disputes 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.
Though there are no recent reports on disputes involving State-Owned Enterprises (SOE), it is likely that domestic courts would favor SOEs during a dispute.
The Mauritanian government guarantees companies that the tax, customs, 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 will be applicable to the investor.
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.
5. Protection of Property Rights
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.
The Ministry of Habitat and Urbanism continues to computerize the land licenses 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 need to have their notarized sale agreement along with the title certificate 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. There remains a large percentage (over 10 percent) land without clear title. Even If property is legally purchased there is always a threat the property being occupied by squatters
Intellectual Property Rights
The legal protection of intellectual property rights (IPR) is still a relatively new concept in Mauritania.= 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 IPR.
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 IPR 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 Washington Treaty on Patents, and the Vienna Treaty on the Registration of Trade Names. Mauritania signed and ratified the World Trade Organization (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) in 1994 but has yet to implement it. The government also signed and ratified the World Intellectual Property Organization (WIPO) Convention in 1976, but it has not signed or ratified the WIPO Internet treaties. The government 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 included in the United States Trade Representative (USTR) Special 301 Report or the Notorious Markets List.
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/