Transparency of the Regulatory System
As reflected in agreements with the IMF and World Bank, Mali has adopted a generally transparent regulatory policy and laws to foster competition. Mali’s laws related to commerce, labor, and competition are designed to meet the requirements of fair competition, ease bureaucratic procedures, and facilitate the hiring and firing of employees. In practice, however, many international firms complain of lack of transparency in the regulatory system and challenges in enforcing regulatory requirements to the detriment of business prospects. There is no public comment period or other opportunity for citizens or businesses to comment upon proposed laws.
Mali is a member of UNCTAD’s international network of transparent investment procedures. Mali is also a member of the African Organization for the Harmonization of Business Law (OHADA) and implements the Accounting System of West African States (SYSCOA), which harmonizes business practices among several African countries consistent with international norms. There are no informal regulatory processes managed by nongovernmental organizations or associations.
Mali’s Public Procurement Regulatory Authority (Autorité de régulation des marchés publics or ARMDS) is tasked with ensuring transparency in public procurement projects and may receive complaints from businesses on public procurement-related issues. ARMDS publishes information about its decisions in disputes as well as key laws relating to public procurement on its website at http://www.armds.ml/ .
The Government of Mali regularly reviews regulations in order to adapt them to the current national context or to international standards or commitments. The new mining code and its implementing decree adopted respectively in 2019 and in 2020 will apply to future mining projects. Reforms to the investment code and the customs code are ongoing. The tax code and the tax procedures book (Livre de procédures fiscales) were substantially amended in September 2020, mainly to introduce a mandatory registration of all taxpayers, to operate changes in the VAT refund, to classify companies in terms of risks for the tax office, to digitalize tax return and payment. The tax office has also planned to obligate the use of e-services by June 2021 for online tax return and online tax check. More information is available on the tax office’s website here .
Mali makes public finance documents, including the budgets for all government ministries and offices, available on the Ministry of Economy of Finance’s website ( https://www.finances.gouv.ml/lois-des-finances ). Mali’s national budget provides details on the expenditures of government entities (including the presidency and prime minister’s office) and the revenues of tax collection authorities, including customs, the public debt directorate, the land administration directorate, and the treasury and public accounting directorate. The budget also includes information on public debt, as well as government subsidies to petroleum products and to the state-owned utility company (Energie du Mali or EDM). Mali also publishes a simplified version of the budget known as the citizen’s budget. Mali has multiple audit institutions tasked with monitoring public spending. The Malian supreme court’s accounts section is responsible for reviewing and approving the financial statements of all of Mali’s government departments. The Office of the Auditor General (Bureau du Verificateur General or BVG) is authorized to audit the accounts of all government entities as well as private companies or other entities that receive public funds. Its reports are made public and can be accessed at http://www.bvg-mali.org/ . Mali has other auditing institutions, including the Office to Fight against Illicit Enrichment (Office central de Lutte contre l’Enrichissement illicite or OCLEI), the General Comptroller of Public Services (Contrôle Général des Services Publics or CGSP), and the Support Unit for Administrative Auditing Bodies (Cellule d’Appui aux Structures de Contrôle de l’Administration or CASCA). Despite the existence of multiple audit institutions, management of public funds remains opaque and subject to corrupt practices, particularly in public procurements. In 2020, the Department of State determined that Mali did not meet the minimum requirements of fiscal transparency despite significant progress.
Mali has multiple audit institutions tasked with monitoring public spending. The Malian supreme court’s accounts section is responsible for reviewing and approving the financial statements of all of Mali’s government departments. The Office of the Auditor General (Bureau du Verificateur General or BVG) is authorized to audit the accounts of all government entities as well as private companies or other entities that receive public funds. Its reports are made public and can be accessed at http://www.bvg-mali.org/ . Mali has other auditing institutions, including the Office to Fight against Illicit Enrichment (Office central de Lutte contre l’Enrichissement illicite or OCLEI), the General Comptroller of Public Services (Contrôle Général des Services Publics or CGSP), and the Support Unit for Administrative Auditing Bodies (Cellule d’Appui aux Structures de Contrôle de l’Administration or CASCA). Despite the existence of multiple audit institutions, management of public funds remains opaque and subject to corrupt practices, particularly in public procurements. In 2020, the Department of State determined that Mali did not meet the minimum requirements of fiscal transparency despite significant progress.
International Regulatory Considerations
As a member of WAEMU and ECOWAS, Mali applies WAEMU and ECOWAS directives.
Mali is a member of the WTO. Mali has not notified the WTO of any measures concerning investments related to trade in goods that are inconsistent with the requirements of Trade Related Investment Measures. Information on other notifications from Mali to the WTO can be found at https://www.wto.org/english/thewto_e/countries_e/mali_e.htm under the “Notifications from Mali” section.
Legal System and Judicial Independence
Mali’s legal system is based on French civil law. Mali uses its investment code, mining code, commerce code, labor code, and code on competition and price to govern disputes. Disputes occasionally arise between the government or state-owned enterprises and foreign companies. Some investors report that certain cases involve wrongdoing on the part of corrupt government officials.
Although Mali’s judicial system is independent, many companies have noted that it is subject to political influence. Numerous business complaints are awaiting an outcome in the courts. The Minister of Justice wields influence over the career paths of judges and prosecutors, which may compromise their independence. Corruption in the judicial system is common, leading to what foreign investors have characterized as flawed decisions.
An independent commercial court was established in 1991 with the encouragement of the U.S. government to expedite the handling of business litigation. Commercial courts, located in Bamako, Kayes, and Mopti, can hear intellectual property rights cases. In areas where there is no commercial court, the local courts of first instance have the jurisdiction to hear business disputes. Decisions made by the courts of first instance are appealable in the court of appeals and/or in the supreme court. Since its inception, the commercial court has handled cases involving foreign companies. The court is staffed by magistrates and is assisted by elected Malian Chamber of Commerce and Industry representatives. Teams composed of one magistrate and two Chamber of Commerce and Industry representatives conduct hearings. The magistrate’s role is to ensure that the court renders decisions in accordance with applicable commercial laws, including internationally recognized bankruptcy laws, and that court decisions are enforced under Malian law.
Laws and Regulations on Foreign Direct Investment
Mali’s investment code gives the same incentives to both domestic and foreign companies for licensing, procurement, tax and customs duty deferrals, export and import policies, and export zone status if the firm exports at least 80 percent of production. Incentives include exemptions from duties on imported equipment and machinery. Investors may also receive tax exemptions on the use of local raw materials. In addition, foreign companies can negotiate specific incentives on a case-by-case basis. Mali has reduced or eliminated many export taxes and import duties as part of ongoing economic reforms; however, export taxes remain for gold and cotton, Mali’s two primary exports. The government applies price controls to petroleum products and cotton, and occasionally to other commodities (such as rice) on a case-by-case basis.
In most cases, foreign investors may own 100 percent of any business they create, except in the mining and media sectors. Foreign investors may also purchase shares in parastatal companies. Foreign companies may also start joint-venture operations with Malian enterprises. The repatriation of capital and profit is guaranteed.
Despite having a generally favorable investment regime on paper, foreign investors have complained of facing challenges in practice, including limited access to financing, high levels of corruption, poor infrastructure (including inconsistent electricity access), a non-transparent judicial system, and the lack of an educated workforce.
The following websites provide additional information relating to investments in Mali:
Investment Promotion Agency: https://apimali.gov.ml/ and http://mali.eregulations.org/
Mali Trade Portal: https://tradeportal.ml/
National Council of Employers: http://www.cnpmali.org/index.php/lois-et-reglements/codes
Niger River Authority (Officer du Niger): https://www.on-mali.org/on/
Chamber of Commerce and Industry: http://www.cci.ml
Ministry of Economy and Finances: http://www.finances.gouv.ml
Public Procurement Regulatory Authority: http://www.armds.ml/
Competition and Antitrust Laws
The Ministry of Commerce and Industry is responsible for reviewing free competition in the Malian marketplace. Mali’s national competition law (Law 2016-006 and Decree 2018-0332) and the WAEMU 2002 anti-trust rules are the primary judicial documents that govern competition in Mali. The competition law bans any agreements restricting competition or market access. It also bans control or fixation of prices through agreements. Abuses of dominance are prohibited. The commercial court (Tribunal of Commerce) and ARMDS are the primary judicial bodies that oversee competition-related concerns.
Mali’s Organization of Industrial Entrepreneurs (Organisation Patronal des Industriels or OPI) has criticized corruption and smuggling as significant hurdles to fair competition. Contacts report that Mali struggles to limit illegal imports of products such as sodas, juices, tobacco, medicines, and textiles (including fabrics). The General Directorate of Customs, the National Directorate for Commerce and Competition, and the Agency for the Sanitary Security of Foods occasionally intervene to address the import and commercialization of smuggled goods but have limited capacity to effectively address the problem.
Expropriation and Compensation
Expropriation of private property other than land for public purposes is rare. In January 2021, the Malian authorities launched an operation to demolish unlawful construction in the areas surrounding Bamako’s international airport. According to the transition government, illegal construction covering a total surface area of 7,192 hectares in the vicinity of the airport is slated to be destroyed.
Mali has not unfairly targeted U.S. firms for expropriation. Under Malian law, the expropriation process must be public and transparent and follow the principles of international law. Compensation based on market value is awarded by court decision.
The government may exercise eminent domain in various situations, including when undertaking large-scale public projects, in cases of bankrupt companies that had a government guarantee for their financing, or when a company has not complied with the requirements of an investment agreement with the government.
In cases of illegal expropriations, Malian law affords claimants due process in principle. However, given reported corruption in the land administration sector, impartial adjudication of court cases involving land disputes is rare.
ICSID Convention and New York Convention
Mali is a member of the International Center for the Settlement of Investment Disputes (ICSID). Malian law (Decree No. 09/P-CMLN promulgating Order No. 77-63/CMLN of November 11, 1977 and Order No. 77-63/CMLN) authorizes implementation of the ICSID Convention. Mali is also a signatory of the Convention on the Recognition and Enforcement of Arbitral Awards (the New York Convention).
Investor-State Dispute Settlement
Investors engaged in disputes with the state are supposed to undertake amicable negotiations before engaging Mali’s Public Procurement Regulatory Authority (ARMDS) or the courts. Failure to reach an out-of-court agreement will lead to the case being transferred to the Court of First Instance, the commercial court, or international arbitration. The decisions of foreign courts are enforced so long as they are specified and recognized by Malian law.
Mali’s investment code allows a foreign company that has a signed agreement with the government to refer to international arbitration any case that the local courts are unable to resolve. Mali’s 2019 mining code specifies that if there is a disagreement between the Malian government and a mining company related to application of the mining code, the disagreement may be referred to Malian courts, regional courts, and international courts.
Investors have reported that the dispute resolution process is often unfair, cumbersome, and time-consuming. Dispute resolution can take multiple years and is reportedly often fraught with corruption, political influence, and demands for payments to facilitate the legal process.
International Commercial Arbitration and Foreign Courts
Mali is a member of the African Organization for the Harmonization of Business Law (OHADA) and has ratified the 1993 treaty creating the Common Court of Justice and Arbitration. OHADA has a provision allowing litigation between foreign companies and domestic companies or with the government to be tried in an appellate court outside of Mali.
Mali’s bankruptcy law is found in its commerce code, which does not criminalize bankruptcy. According to the World Bank’s 2020 Doing Business Report, resolving insolvency takes 3.6 years on average and costs 18 percent of the debtor’s estate. Generally, a bankrupt company will be sold piecemeal. The average recovery rate is 28.3 cents on the dollar.