2010 Investment Climate Statement
Bureau of Economic, Energy and Business Affairs
May 2010
Report

Angola offers both high returns and great risks to investors and exporters. Oil and diamond revenue and intensive infrastructure rebuilding following the end of civil war in 2002 create business opportunities. From 2004 to 2008, the Angolan economy had double digit growth rates, but the collapse of the oil and diamond market kept overall growth flat in 2009. Although the global financial crisis slowed Angola’s heretofore explosive growth in 2009, projections are that Angola will return to double-digit growth for 2010. The business environment, however, is one of the most difficult in the world. Investors must factor in pervasive corruption, an underdeveloped financial system, poor infrastructure and high on-the-ground costs. Surface transportation inside the country is slow and expensive while bureaucracy and port inefficiencies complicate imports.

The National Private Investment Agency (ANIP) helps facilitate new investment under the 2003 Basic Law for Private Investment (Law 11/03). Law 11/03 lays out the general parameters, benefits, and obligations for foreign investors, provides for equal treatment, offers fiscal and custom incentives, simplifies the investment application process and sets capital requirements. However, investments in the energy, diamond, telecommunication and financial sectors continue to be governed by legislation specific to each sector. Decrees and regulations issued by other government ministries may take precedence over the 2003 Law. Present or future rules may erode or negate investment protections offered by the 2003 Investment Law. The 2003 investment law was part of an overall effort by the Government of the Republic of Angola (GRA) to create a more investor-friendly environment. Other legislative measures include the Company Law and the Voluntary Arbitration Law. The Company Law consolidates the rules that apply to the incorporation of commercial companies in Angola, and the Voluntary Arbitration Law provides a legal framework for non-judicial resolution of disputes.

In 2008, President dos Santos created a commission consisting of senior economic advisers tasked to overhaul ANIP. As part of its mandate, the commission explored changes impacting private investment, including Angola’s tax incentive structure, customs policies, and immigration laws and regulations as they affect business and investment in the country. The commission presented its findings and recommendations to the president in April 2009. Changes to policy will occur during 2009-2010 and prospective investors are advised to monitor ANIP’s website.

ANIP must approve foreign investments of $100,000 to $5 million. The Council of Ministers must approve investments over $5 million as well as any investment that requires a concession (such as oil or mining) or involves the participation of a parastatal. After obtaining contract approval from ANIP or the Council of Ministers, the investor must register the company, publish the company’s statutes in the official gazette (Diário da República), obtain a business license, and register with the fiscal authorities. Foreign investments under $100,000 do not require ANIP approval.

Obtaining the proper permits and business licenses to operate in Angola can be time-consuming. The World Bank Doing Business in 2010 report identified Angola as one of the most time-consuming countries surveyed for establishing a business (169 out of 181). Launching a business typically requires 68 days compared with a regional average of 45 days. The government established the “Guichet Único,” or one-stop shop, under the Ministry of Justice, bringing together representatives of various ministries in one place, in an effort to simplify and speed up company registration time. However, the Ministry of Justice lacks authority over the other government ministries, and the process remains slow. With the assistance of advisors from the Portuguese Ministry of Justice, the GRA Ministry of Justice is in the process of reorganizing the Guichet to increase its efficiency.

While no formal discrimination against foreign investment exists, Angolan or other companies familiar with the bureaucratic and legal complexities of the business environment often hold an advantage. The Promotion of Angolan Private Entrepreneurs Law gives Angolan-owned companies preferential treatment in tendering for goods, services and public works contracts.

The government continues to work on the creation of a stock exchange, the “Bolsa de Valores.” No visible progress has been made during the year; however, the government issued an announcement saying that it hoped the stock exchange would start operations in mid 2010.

Conversion and Transfer Policies

Economic and financial reform measures in recent years have improved local access to foreign exchange and facilitated remittance and transfer of funds. However, in response to the global financial crisis, in which Angola saw its oil revenues decline by over 60 percent, the government sharply reduced the amount of U.S. dollars auctioned off to the commercial banking system from March until November of 2009. While Investment Law 11/03 guarantees the repatriation of profits for officially approved foreign investments, and investors can remit funds through local commercial banks, under Central Bank Order 4/2003, the Central Bank (BNA) must authorize the repatriation of profits and dividends exceeding $300,000. In addition, the Central Bank can temporarily suspend repatriation of dividends or impose repatriation in installments if immediate repatriation would have an adverse effect on the country's balance of payments. In 2009, the BNA temporarily stopped all foreign wire transfers of U.S. dollars and other currencies in an effort to help stem the flow of foreign exchange reserves out of the country during the crisis. While the BNA is again approving wire transfers, it is requiring much more detailed information from the transferring entity, including copies of employment contracts for any individuals paid off-shore with U.S. dollars. These new documentation requirements are expected to be permanent, and have significantly increased the BNA’s approval time for transfers.

Expropriation and Compensation

The Government of Angola is unlikely to expropriate the assets of foreign investors directly. Starting in April 2009, however, the GRA stopped paying its contractors as a result of the loss of oil revenues during the financial crisis. The GRA began paying its contractors again in August 2009, but only partially, and as of February 2010 had an estimated USD 4 billion in arrears. In 2007, the GRA cancelled quarrying permits for several companies, including an American-owned company, without compensation or adequate explanation. Prior to 1992, the government used failure to fulfill contractual or other obligations as justification for expelling foreign investors and expropriating their facilities. Changes in legislation and enforcement of existing laws pose some risk of reducing company profits. This is especially true in the petroleum sector, which has been subject to local content regulations and three petroleum laws promulgated in 2004. The legislative process is generally secretive and closed to public review. Additionally, vague provisions in some laws permit varying interpretations.

Dispute Settlement

Angola's legal and judicial system lacks capacity and is inefficient. Legal fees are high, and most businesses avoid taking commercial disputes to court. The World Bank’s Doing Business in 2010 survey ranks Angola at 181 out of 181 on contract enforcement, and estimates that commercial contract enforcement, measured by time elapsed between filing a complaint and receiving restitution, typically takes 1,011 days in Angola at an average cost of 44 percent of the claim. The Voluntary Arbitration Law (VAL) provides a general legal framework for faster, non-judicial arbitration of disputes, except for cases expressly excluded by the law. The VAL has been published in the official gazette, the Diário da República, and is in effect. Angola is not a signatory to the United Nations New York Convention, the World Bank’s International Center for Settlement of Investment Disputes (ICSID), or the United Nations Convention on the International Sale of Goods (CISG). In 2008, the Attorney General ruled that Angola’s specialized tax courts were unconstitutional. This effectively left businesses with no legal recourse to dispute taxes levied by the Ministry of Finance as the general courts consistently rule that they have no authority to hear tax dispute cases and refer all cases back to the Ministry of Finance for resolution. Angola is a member of the Multilateral Investment Guarantee Agency (MIGA), which provides dispute settlement assistance. Past MIGA efforts to resolve foreign investment disputes have proven successful, but no cases involving U.S. companies were referred to MIGA in 2009. The Angolan and U.S. Governments have successfully negotiated a Trade and Investment Framework Agreement (TIFA).

Performance Requirements and Incentives

Angola's investment law gives foreign and domestic investors equal access to investment incentives. Incentives for such high-priority sectors as agriculture, manufacturing, energy, water and housing include exemption from industrial and capital gains taxes for up to 15 years and from customs duties for up to 6 years. Many foreign companies now operating in Angola enjoy some form of tax or duty waiver. Companies need to apply for such incentives when submitting an investment application to ANIP. ANIP and other government ministries are willing to accommodate large foreign investments.

While Angola does not impose or enforce many specific performance requirements on foreign investments, the government encourages "Angolanization" of companies and greater use of Angolan suppliers of goods and services. Decrees 5/95 and 6/01 limit expatriate staffing of local companies set up in Angola by national or foreign investors to 30 percent of the workforce and require Angolan and expatriate staff with the same jobs and responsibilities to receive the same salaries and social benefits. A decree promulgated on October 14, 2008 requires oil companies to first seek Angolan employees to fill any vacant position prior to seeking expatriate appointment, which must first be authorized by the Ministry of Petroleum. International oil companies are working with the government on a new local-content initiative that will establish more explicit sourcing requirements for the petroleum sector. Oil service companies may meet these requirements by partnering with local Angolan firms, hiring more Angolan employees or substituting local products for imports. Foreign investors can set up fully-owned subsidiaries in many sectors and frequently are encouraged, but not required, to take on local partners. In 2009, the GRA began to more strictly enforce Decree 5/95. Expatriate employees can now expect to receive no more than three renewals to their one year work visas for a total of four years. Approval for the fourth year is contingent upon the foreign investor identifying the Angolan employee who will take over the position after the expatriate leaves at the end of the fourth year.

In the oil and diamond sectors, contracts with the government spell out the commitments companies make to invest in infrastructure and social services to benefit local communities, such as building schools, equipping hospitals or funding microcredit programs. The government also encourages downstream investments in facilities such as refineries and diamond-processing plants.

The Angolan government requires an Environmental Impact Study for investments in petroleum, mining, road construction or power stations. The Ministry of Environment must approve all Environmental Impact Studies before projects can be licensed.

Right to Private Ownership and Establishment

Foreign and domestic private entities have the right to establish, acquire and dispose of interests in business enterprises. Public enterprises hold some practical advantages in access to markets and credit. All non-urban and some urban land is ultimately under State ownership, but can be leased to private entities. Regulations to implement the 2004 land-tenure law should clarify land use and ownership, but have not yet been issued. Oil and diamond production and exploration rights are granted for limited periods of time and only as partnerships between private companies and the resource owners, Sonangol and Endiama, respectively. Diamond-exploration concessions normally last three to five years, with the possibility of extension. Diamond-production contracts are negotiated following a viable discovery. Oil-exploration concessions normally last for 10 years. The government allows and encourages public-private partnerships and participation of private investors in public utilities like electricity and water. Private companies have concessions to operate hydroelectric dams and shipping terminals in the Port of Luanda.

Protection of Property Rights

Intellectual Property

Angola has basic intellectual property rights protection. Angola’s National Assembly adopted the Paris Convention for the Protection of Industrial Intellectual Property in August 2005, incorporating the 1979 text and the patent cooperation treaty concluded in 1970 and amended in 1979 and 1984. The Ministry of Industry administers intellectual property rights for trademarks, patents and designs under Industrial Property Law 3/92. The Ministry of Culture regulates authorship, literary and artistic rights under Copyright Law 4/90. No court case involving U.S. intellectual property has tested the strength of these laws. Angola is a member of the World Intellectual Property Organization (WIPO) and follows international patent classifications of patents, products and services to identify and codify requests for patents and trademark registration. The fee for each patent petition varies by type of request.

Real Estate

Angola’s Law on Land and Urban Planning affirms that all land ultimately belongs to the State, but permits most urban and some non-urban land to become effectively privately owned through long-term renewable leases from the Angolan government. Registering parcels of land over 10,000 hectares must be approved by the Council of Ministers. Registering property takes 6 months, according to the World Bank’s “Doing Business in 2010 Survey, with fees reaching 11.4 percent of property value. Owners must also wait five years after purchase before selling land. Implementing regulations, when written, are supposed to set out guidelines defining different forms of land occupation, including commercial use, traditional communal use, leasing and private homes.

Transparency of Regulatory System

The government is making progress in establishing clearer written regulations. Traditionally, the regulatory system has been complex, vague and inconsistently enforced. In many sectors, no effective regulatory system exists, due to lack of capacity. The Angolan Communications Institute (INACOM) sets prices for telecommunications services and is the regulatory authority for the telecommunications sector. Revised energy-sector licensing regulations have improved legal protection for investors to attract more private investment in electrical infrastructure, such as dams, power plants and distribution grids. A 2005 banking supervision law continues to wait for National Assembly action.

Efficient Capital Markets and Portfolio Investment

Angola’s financial sector, though still underdeveloped, has grown rapidly and key indicators have improved in recent years. By December 2008, total deposits exceeded $18 billion, up from $6.5 billion in 2007. Most banks focus their operations on such short-term commission-related activities as currency trading and trade finance. Foreign investors do not normally access credit locally, and local investors either self-finance or seek financing from non-Angolan banks and investment funds. Subsidized government loan programs to promote economic development are available only to majority-owned Angolan companies and on a very selective basis. Local businesses must take loans in kwanzas, the Angolan currency, though exceptions are granted.

In the past, triple-digit inflation resulted in a high level of dollarization in the economy and banking system, with 70 percent of banking assets held in dollars. Since the end of the civil war in 2002, the Central Bank has devoted considerable effort to rebuilding trust in the kwanza, bringing inflation down to 12 % in 2006, 11.8 % in 2007, and 13.2 % in 2008; however, inflation rose to 13.99 % in 2009. The mandatory reserve requirement for non-government deposits whether in kwanzas or foreign currency, is 30 percent. The reserve requirement for government deposits is 100 percent, a measure that seriously limits lending by state-owned banks.

The number of private banks has been growing since 2003, transforming a sector previously dominated by State-owned banks. Two of Angola’s three largest banks are privately owned. As of late 2009, Angola had 18 commercial banks, three of them State-owned. While every provincial capital has at least three bank branches, only 7.5 percent of the population uses banks, and few businesses even apply for loans. By mid-2009, credit to the private sector amounted to just 15.4 percent of GDP; while bank deposits totaled only 17.9 percent of GDP.

Banks have begun to offer a more diverse array of financial products and instruments. However, banks in Angola extend little unsecured credit, requiring instead significant amounts of collateral in the form of property or dollar deposits from the borrower. The GRA’s non-payment of contracts for most of 2009 strained the commercial banking system, as government spending drives the non-petroleum economy, resulting in an increase of non-performing loans on bank balance sheets. At present commercial credit in Angola remains tight. Unclear land titles and ill-defined property rights may, in some instances, complicate and lengthen the process of applying for a mortgage. In other financial services, four new insurance companies, Nossa Seguros, Global Seguros, Mundial Seguros and GA Seguros began operations in 2006. In 2009 Garantia Seguros also began operating.

Banks had a low lending rate of 51 percent of deposits in 2009. Banks are blocked from identifying customers and requiring collateral because State-owned property cannot be offered as collateral, the judicial system is weak, credit histories cannot be tracked and few houses have street addresses. Banks profit from transactions, short-term trade financing and investments in high-interest government bonds, but also increasingly from loans, especially in the construction sector. In the past, State and State-affiliated companies enjoyed privileged access to loans, often at concessionary rates, leading to several bank failures.

The Central Bank has developed a market for short-term bonds called Títulos do Banco Central and long-term bonds called Obrigações do Tesouro. Most of these bonds are bought and held by local Angolan banks. The Obrigações have maturities ranging from 1 to 7.5 years, whereas the Títulos have maturities of 91 to 182 days. For up-to-date information on current rates, see www.bna.ao. In 2007, the government issued $3.5 billion in a single issue subscribed by a number of Angolan commercial banks. In 2009, the government attempted to issue $9 billion worth of Kwanza denominated bonds, but sold only $600 million of the bonds. In November 2009 the government approved the issuing into international markets of medium term treasury bonds, at an estimated nominal value of $4 billion. The bonds will be placed in two parts of $2 billion between April 2010 and December 2010.

In December 2005, the government announced plans to develop a stock market and appointed a commission to oversee its creation. It had not opened as of the end of 2009. The government may privatize some state-owned companies and list them on the stock exchange. The state oil company SONANGOL and the state diamond company ENDIAMA are expected to be listed on the stock exchange.

Below is a chart listing commercial banks operating in Angola.

If a scroll bar appears below the following table, swipe the table to move left/right of the dashed line.
LIST OF COMMERCIAL BANKS OPERATING IN ANGOLA

BANKS
CONTACT INFORMATION
SHAREHOLDERS
CAPITALIZATION
PRINCIPLE CLIENTS
1
BCI, Banco de Comercio e Industria
Adriano Rafael Pascoal, CEO, tel. 244 2 330769 Fax 244 2 331498 e-mail secretariado@bci.ebonet.net
State
Kz 615.034.394,60 = USD 7.687.930
Public Enterprises
2
BPC, Banco de Poupança e Credito
Paixao Junior, CEO tel. 244 2 334280 Fax 244 2 391580 e-mail bpc@bpc.ebonet.net
State
KZ 783.000.000.00 = USD 9.787.500
Macro/Micro credit loans. Public Administration
3
BAI, Banco Africano de Investimentos
Jose Calos de Castro Paiva, CEO, tel. 244 222 335127 Fax 244 222 335486 e-mail rabreu@bainet.ebonet.net
Sonangol, Deputy Prime Minister Aguinaldo Jaime, Minister of Petroleum, Disiderio da Costa
Kz 6.531.817.500.00 = USD 32.500.000.00
Oil companies. Private companies/ individuals
4
BFA, Banco de Fomento Angolano
Emidio Pinheiro, CEO, tel. 244 2 638900 fax 244 2 638110
BPI,Portuguese Bank of Investments
Kz 2.800.000.000.00=USD 35.000.000.00
Macro credit loans,Private companies and individuals
5
BCA, Banco Comercial Angolano
Benvindo Pitra, CEO, tel. 244 2 449548 fax 244 2 449516 e-mail bca@snet.co.ao
South African Bank (ABSA), and some private Angolan Businesses
Kz 938.700.000.00 = USD 11.733.750
Personnal loans, private medium size companies
6
Banco Sol
Sebastiao Lavrador, CEO, tel 244 2 440330 fax 244 2 440226 e-mail banco.sol@ebonet.net
Mr. Lavrador, Ana Paula dos Santos, (President Dos Santos wife)
Kz 969.339.000.00 = USD 12.116.737
micro credit loans, private small companies
7
Banco Regional do Keve
Amilcar Silva, CEO, Tel. 244 2 394161 Fax 244 2 395101, e-mail servicoscentrais@bankeve.com
Mr. Amilcar Silva, Dr. Carlos Gomes member of the board, Minister Higino Carneiro is the principal shareholder
Kz 456.000.000.00 = USD 5.700.000
Agro Industry
8
Banco Totta de Angola
Mario Nelson Maximo, CEO, tel. 244 222 332729 fax 244 222 333233, e-mail tottango@ebonet.net
Portuguese group Bank Totta & Açores
Kz 793.609.000.00 = USD 9.920.000
Private investment
9
Banco Millennium Angola
Maria Nazare Dang, General manager, tel. 244 222 397922 Fax 244 222 397397
Portuguese Group Millennum BCP
Kz 509.807.334.00 = USD 6.372.500
Corporate, Banking Investments
10
Banco Espirito Santo Angola (BESA)
Ricardo Espirito Santo, CEO, tel. 244 222 333776 Fax 244 222 333772
Portuguese, Group Espirito Santo
Kz 800.000.000.00 = USD 10.000.000
Corporate, Banking Investments
11
Banco de Credito Internacional (BIC)
Fernando Teles, CEO, tel. 244 222 371227 Fax 244 222 395099
Portuguese Group Amorim, Isabel dos Santos (President Dos Santos daughter)
Kz 807.941.050.00 = USD 10.099.000
Corporate, Macro credit loans, Individuals
12
Novo Banco
Tom Mitro, General Manager, tel. 244 222 244 912 509159
Chevron, World Bank
Kz 391.058.220.00 = USD 4.888.000
Micro credit loans
13
Banco de Negocios Internacional (BNI)
Mario Palhares, President
Private Angolan businesses
Kz 1.600.000.000.00 = USD 20.000.000
Corporate, Private banking investments
14
Banco Privado Atlantico (BPA)
Carlos da Silva, CEO
Global Pactium (Angolan Capital Investors), AAA Insurance Company (Sonangol Group)
Kz 800.000.000.00 = USD 10.000.000
Corporate, Management of assets, banking investments
15
BDA, Angolan Development Bank
Paixão Franco Junior, President
State
Kz 4.000.000.000.00 = USD 50.000.000
Macro/micro credit loans, Private banking investments
16
BANC
Sergio de Sousa Tel. 222 339285
Private Angolan businesses
USD 10.000.000
Private banking investments
17
VTB Afica
Lukianenko Vassillievitch Tel. 222 393634
Russian Investment
USD 20.000.000
corporate banking
18
Finibanco Angola
Humberto Leite 222 636021
Portuguese investment
USD 10,000,000
Private banking investments



Political Violence

Political violence is not a substantial risk in Angola. However, the security situation in its oil-rich enclave of Cabinda has worsened somewhat in the last year although it remains better than it was before the 2006 peace accord between the leading separatist movement and the central government. Cabinda has continued to experience violence, often targeted at foreigners.

Corruption

Corruption, including bribery, raises the costs and risks of doing business. Corruption has a corrosive impact on both market opportunities overseas for U.S. companies and the broader business climate. It also deters international investment, stifles economic growth and development, distorts prices, and undermines the rule of law.

It is important for U.S. companies, regardless of their size, to assess the business climate in the relevant market in which they will be operating or investing, and to have an effective compliance program or measures to prevent and detect corruption, including foreign bribery. U.S. individuals and firms operating or investing in foreign markets should take the time to become familiar with the relevant anticorruption laws of both the foreign country and the United States in order to properly comply with them, and where appropriate, they should seek the advice of legal counsel.

The U.S. Government seeks to level the global playing field for U.S. businesses by encouraging other countries to take steps to criminalize their own companies’ acts of corruption, including bribery of foreign public officials, by requiring them to uphold their obligations under relevant international conventions. A U. S. firm that believes a competitor is seeking to use bribery of a foreign public official to secure a contract should bring this to the attention of appropriate U.S. agencies, as noted below.

U.S. Foreign Corrupt Practices Act: In 1977, the United States enacted the Foreign Corrupt Practices Act (FCPA), which makes it unlawful for a U.S. person, and certain foreign issuers of securities, to make a corrupt payment to foreign public officials for the purpose of obtaining or retaining business for or with, or directing business to, any person. The FCPA also applies to foreign firms and persons who take any act in furtherance of such a corrupt payment while in the United States. For more detailed information on the FCPA, see the FCPA Lay-Person’s Guide at: http://www.justice.gov/criminal/fraud/docs/dojdocb.html.

Other Instruments: It is U.S. Government policy to promote good governance, including host country implementation and enforcement of anti-corruption laws and policies pursuant to their obligations under international agreements. Since enactment of the FCPA, the United States has been instrumental to the expansion of the international framework to fight corruption. Several significant components of this framework are the OECD Convention on Combating Bribery of Foreign Public Officials in International Business Transactions (OECD Antibribery Convention), the United Nations Convention against Corruption (UN Convention), the Inter-American Convention against Corruption (OAS Convention), the Council of Europe Criminal and Civil Law Conventions, and a growing list of U.S. free trade agreements. Angola is not a part of any of these conventions, but generally all countries prohibit the bribery and solicitation of their public officials.

OECD Antibribery Convention: The OECD Antibribery Convention entered into force in February 1999. As of December 2009, there are 38 parties to the Convention including the United States (see http://www.oecd.org/dataoecd/59/13/40272933.pdf). Major exporters China, India, and Russia are not parties although the U.S. Government strongly endorses their eventual accession to the Convention. The Convention obligates the Parties to criminalize bribery of foreign public officials in the conduct of international business. The United States meets its international obligations under the OECD Antibribery Convention through the U.S. FCPA. Angola is not a party of the OECD Antibribery Convention.

UN Convention: The UN Anticorruption Convention entered into force on December 14, 2005, and there are 143 parties to it as of December 2009 (see http://www.unodc.org/unodc/en/treaties/CAC/signatories.html). The UN Convention is the first global comprehensive international anticorruption agreement. The UN Convention requires countries to establish criminal and other offences to cover a wide range of acts of corruption. The UN Convention goes beyond previous anticorruption instruments, covering a broad range of issues ranging from basic forms of corruption such as bribery and solicitation, embezzlement, trading in influence to the concealment and laundering of the proceeds of corruption. The Convention contains transnational business bribery provisions that are functionally similar to those in the OECD Antibribery Convention and contains provisions on private sector auditing and books and records requirements. Other provisions address matters such as prevention, international cooperation, and asset recovery. Angola is not a party to the UN Convention.

OAS Convention: In 1996, the Member States of the Organization of American States (OAS) adopted the first international anticorruption legal instrument, the Inter-American Convention against Corruption (OAS Convention), which entered into force in March 1997. The OAS Convention, among other things, establishes a set of preventive measures against corruption, provides for the criminalization of certain acts of corruption, including transnational bribery and illicit enrichment, and contains a series of provisions to strengthen the cooperation between its States Parties in areas such as mutual legal assistance and technical cooperation. As of December 2009, the OAS Convention has 33 parties (see http://www.oas.org/juridico/english/Sigs/b-58.html) Angola is not a party to the OAS Convention.

Council of Europe Criminal Law and Civil Law Conventions: Many European countries are parties to either the Council of Europe (CoE) Criminal Law Convention on Corruption, the Civil Law Convention, or both. The Criminal Law Convention requires criminalization of a wide range of national and transnational conduct, including bribery, money-laundering, and account offenses. It also incorporates provisions on liability of legal persons and witness protection. The Civil Law Convention includes provisions on compensation for damage relating to corrupt acts, whistleblower protection, and validity of contracts, inter alia. The Group of States against Corruption (GRECO) was established in 1999 by the CoE to monitor compliance with these and related anti-corruption standards. Currently, GRECO comprises 46 member States (45 European countries and the United States). As of December 2009, the Criminal Law Convention has 42 parties and the Civil Law Convention has 34 (see www.coe.int/greco.) Angola is not a party to the Council of Europe Conventions.

Free Trade Agreements: While it is U.S. Government policy to include anticorruption provisions in free trade agreements (FTAs) that it negotiates with its trading partners, the anticorruption provisions have evolved over time. The most recent FTAs negotiated now require trading partners to criminalize “active bribery” of public officials (offering bribes to any public official must be made a criminal offense, both domestically and trans-nationally) as well as domestic “passive bribery” (solicitation of a bribe by a domestic official). All U.S. FTAs may be found at the U.S. Trade Representative Website: http://www.ustr.gov/trade-agreements/free-trade-agreements. Angola does not have an FTA with the United States.

Local Laws: U.S. firms should familiarize themselves with local anticorruption laws, and, where appropriate, seek legal counsel. While the U.S. Department of Commerce cannot provide legal advice on local laws, the Department’s U.S. and Foreign Commercial Service can provide assistance with navigating the host country’s legal system and obtaining a list of local legal counsel.

Assistance for U.S. Businesses: The U.S. Department of Commerce offers several services to aid U.S. businesses seeking to address business-related corruption issues. For example, the U.S. and Foreign Commercial Service can provide services that may assist U.S. companies in conducting their due diligence as part of the company’s overarching compliance program when choosing business partners or agents overseas. The U.S. Foreign and Commercial Service can be reached directly through its offices in every major U.S. and foreign city, or through its Website at www.trade.gov/cs.

The Departments of Commerce and State provide worldwide support for qualified U.S. companies bidding on foreign government contracts through the Commerce Department’s Advocacy Center and State’s Office of Commercial and Business Affairs. Problems, including alleged corruption by foreign governments or competitors, encountered by U.S. companies in seeking such foreign business opportunities can be brought to the attention of appropriate U.S. government officials, including local embassy personnel and through the Department of Commerce Trade Compliance Center “Report A Trade Barrier” Website at tcc.export.gov/Report_a_Barrier/index.asp.

Guidance on the U.S. FCPA: The Department of Justice’s (DOJ) FCPA Opinion Procedure enables U.S. firms and individuals to request a statement of the Justice Department’s present enforcement intentions under the antibribery provisions of the FCPA regarding any proposed business conduct. The details of the opinion procedure are available on DOJ’s Fraud Section Website at www.justice.gov/criminal/fraud/fcpa. Although the Department of Commerce has no enforcement role with respect to the FCPA, it supplies general guidance to U.S. exporters who have questions about the FCPA and about international developments concerning the FCPA. For further information, see the Office of the Chief Counsel for International Counsel, U.S. Department of Commerce, Website, at http://www.ogc.doc.gov/trans_anti_bribery.html. More general information on the FCPA is available at the Websites listed below.

Exporters and investors should be aware that generally all countries prohibit the bribery of their public officials, and prohibit their officials from soliciting bribes under domestic laws. Most countries are required to criminalize such bribery and other acts of corruption by virtue of being parties to various international conventions discussed above.

To lower investment risks and provide greater assurance to investors, Angola needs greater progress toward good governance, the rule of law and diminished corruption. Senior officials are widely seen as corrupt while the government’s limited publication of accounting information fuels public suspicions. Since 2006, under pressure from the international community, the government has made significant strides towards greater transparency by publishing financial information and preventing extra-budgetary expenditures. In 2010 Angola published its detailed budget online at www.minfin.gv.ao In recent years, both the amount and quality of budgetary and oil revenue data has gotten better. Angola now publishes online a monthly block-by-block accounting of oil production and revenues at www.minfin.gv.ao. Additionally, Angola has committed to taking greater steps toward transparency, such as publishing the external audits of state oil company Sonangol, in its recent Stand-By Agreement with the IMF, available at www.imf.org. Angola is not a signatory to the OECD Convention on Combating Bribery, but is a participant in the New Partnership for Africa’s Development (NEPAD), which includes a Peer Review Mechanism on good governance and transparency. Angola’s government approved an Audit Court in 2000 to investigate misuse of public funds by public institutions.

Low civil-service salaries and a proliferation of bureaucracy and regulations present opportunities for rent-seeking and encourage corruption. Complicated procedures and long bureaucratic delays sometimes tempt investors to seek quicker service and approval by paying gratuities and facilitation fees. Transparency International's 2009 Corruption Perception Index (CPI) placed Angola at 162 of 180 countries. The Heritage Foundation ranked Angola 143 of 162 countries surveyed on its 2008 Index of Economic Freedom, describing Angola as “repressed.”

Although the nation’s public and private companies historically have not used transparent accounting systems consistent with international norms, Angola, encouraged by the IMF, has invited major international accounting firms to conduct regular audits of its largest public companies. The 2002 Audit Law requires audits for all “large” companies, but the lack of a professional accounting oversight body has impeded enforcement, and the law does not require that the results of the audit be made public. U.S. firms operating in Angola are required to adhere to the Foreign Corrupt Practices Act.

Anti-Corruption Resources

Some useful resources for individuals and companies regarding combating corruption in global markets include the following:

· Information about the U.S. Foreign Corrupt Practices Act (FCPA), including a “Lay-Person’s Guide to the FCPA” is available at the U.S. Department of Justice’s Website at: http://www.justice.gov/criminal/fraud/fcpa.

· Information about the OECD Antibribery Convention including links to national implementing legislation and country monitoring reports is available at: http://www.oecd.org/department/0,3355,en_2649_34859_1_1_1_1_1,00.html. See also new Antibribery Recommendation and Good Practice Guidance Annex for companies: http://www.oecd.org/dataoecd/11/40/44176910.pdf

· General information about anticorruption initiatives, such as the OECD Convention and the FCPA, including translations of the statute into several languages, is available at the Department of Commerce Office of the Chief Counsel for International Commerce Website: http://www.ogc.doc.gov/trans_anti_bribery.html.

· Transparency International (TI) publishes an annual Corruption Perceptions Index (CPI). The CPI measures the perceived level of public-sector corruption in 180 countries and territories around the world. The CPI is available at: http://www.transparency.org/policy_research/surveys_indices/cpi/2009. TI also publishes an annual Global Corruption Report which provides a systematic evaluation of the state of corruption around the world. It includes an in-depth analysis of a focal theme, a series of country reports that document major corruption related events and developments from all continents and an overview of the latest research findings on anti-corruption diagnostics and tools. See http://www.transparency.org/publications/gcr.

· The World Bank Institute publishes Worldwide Governance Indicators (WGI). These indicators assess six dimensions of governance in 212 countries, including Voice and Accountability, Political Stability and Absence of Violence, Government Effectiveness, Regulatory Quality, Rule of Law and Control of Corruption. See http://info.worldbank.org/governance/wgi/sc_country.asp. The World Bank Business Environment and Enterprise Performance Surveys may also be of interest and are available at: http://go.worldbank.org/RQQXYJ6210.

· The World Economic Forum publishes the Global Enabling Trade Report, which presents the rankings of the Enabling Trade Index, and includes an assessment of the transparency of border administration (focused on bribe payments and corruption) and a separate segment on corruption and the regulatory environment. See http://www.weforum.org/en/initiatives/gcp/GlobalEnablingTradeReport/index.htm.

· Additional country information related to corruption can be found in the U.S. State Department’s annual Human Rights Report available at http://www.state.gov/j/drl/rls/hrrpt/.

· Global Integrity, a nonprofit organization, publishes its annual Global Integrity Report, which provides indicators for 92 countries with respect to governance and anti-corruption. The report highlights the strengths and weaknesses of national level anti-corruption systems. The report is available at: http://report.globalintegrity.org/.
Bilateral Investment Agreements

In May 2009 Angola signed a Trade Investment Framework Agreement (TIFA) with the United States. The TIFA will provide a forum to address trade issues and help enhance trade and investment relations between the United States and Angola. Angola has signed bilateral investment agreements with Italy, Germany, Portugal, South Africa and the United Kingdom, but has not ratified or implemented any of those agreements. Angola ratified a bilateral investment agreement with Cape Verde in 2004. A list of current bilateral investment treaties and their status can be found at the United Nations Conference on Trade and Development (UNCTAD) website: www.unctad.org.

OPIC and Other Investment Insurance Programs

The Overseas Private Investment Corporation (OPIC) has provided investment insurance to projects in Angola in recent years, and U.S. investors can apply for OPIC insurance, including coverage under its “Quick Cover” program for projects valued at less than $50 million in certain sectors.

Angola is a member of the Multilateral Investment Guarantee Agency (MIGA), which provides insurance to foreign investors against such risks as expropriation, non-convertibility, war or civil disturbance. MIGA also provides investment dispute resolution on a case-by-case basis.

Labor

Angola’s General Labor Law (Law No. 2/00) provides significant protection and benefits to workers. The law expands maternity and other leave and provides the right to strike and bargain collectively. The law spells out proper procedures for hiring workers. For work contracts of indefinite duration, the law provides for a basic probationary period of up to six months, during which the worker or employer can terminate the contract without notice or justification. After the probationary period ends, dismissed workers have the right to appeal to a Labor Court. Many employers prefer to reach a monetary settlement with workers when a dispute arises rather than bring cases before the Court. The World Bank Group’s 2010 Doing Business report placed the average cost of firing a worker in Angola at 58 weeks worth of wages.

The local labor force has limited technical skills, English language ability and managerial ability. Many employers invest heavily in educating and training their Angolan staff.

The government conducts annual surveys of the oil industry to implement a requirement that oil companies hire Angolan nationals when qualified applicants are available. If no qualified nationals apply for the position, then the companies may request the government’s permission to hire expatriates. This rule also requires equal pay and benefits for equal work. Outside of the petroleum sector, policies to encourage Angolanization of the labor force discourage bringing in expatriate labor. This has extended to delays in approving visas for technicians to visit for a few weeks. In late 2008, the GRA began a more rigorous enforcement of its Angolanization policy. An announcement was issued by the government directed at the international oil companies. A similar announcement for companies outside the petroleum sector was not released, however, evidence strongly indicates that the GRA has steeped up enforcement of Angolanization in the non-petroleum sector as well.

The constitution grants the right to engage in union activities and labor strikes, but the government may intervene in labor disputes that affect national security, particularly strikes in the oil sector. More than 2,000 workers at the port of Lobito, Angola’s second largest, went on strike in November 2008 for two weeks demanding their salaries be increased to $800 a month from as low as $240. The port director accepted their demands, but at the time of this report their demands had not been implemented. There are indications that workers at the port will strike again in the near future. A strike at the Sonils base in Luanda occurred in November 2008. Sonils dock workers were forcibly removed from the base after demanding higher wages.

Foreign-Trade Zones/Free Ports

Angola is a signatory to the SADC Free Trade Protocol that seeks to harmonize and reduce tariffs and establish regional policies on trade, customs and methodology. However, in 2008, Angola announced that it would delay implementation of this protocol until 2010, fearing a flood of imports from other SADC countries, particularly South Africa. The government aims to revive internal production before lowering its tariff barriers. In September 2004, the government announced reduced customs duties on imported goods and in December exempted businesses and individuals in the enclave of Cabinda from all customs duties. In early 2009, the newly expanded port of Cabinda began operations. An initial investment of $100 million was made to deepen the port and increase port capacity. These reductions and exemptions do not apply to the oil industry. Angola has signed customs cooperation agreements with Portugal and São Tomé and Principe, and more recently (December 2006) with neighboring Namibia. Other agreements are expected with South Africa and members of the Community of Portuguese-Speaking Countries (CPLP). Angola is also currently negotiating customs agreements with two other neighbors, Zambia and the Democratic Republic of Congo, both fellow SADC members.

Foreign Direct Investment Statistics

According to the UN Conference on Trade and Development’s (UNCTAD) 2008 World Investment Report, Angola had a total of USD 12.1 billion in FDI in 2006 or 25.7% of GDP. During 2000-06, average annual inflows of FDI were $1.9 billion. In 2007 FDI stock stood at 12.2 billion, or 19.9 percent of GDP. The petroleum industry accounts for most FDI, with annual amounts varying, depending on the size and number of projects underway. Most of Angola’s FDI comes from the United States, followed by France and the Netherlands. FDI outflow and stock have been negligible. In 2002, FDI outflow from Angola was less than $10 million.

Angola is a recipient of several lines of credit from the following countries:

China (Export-Import Bank) USD 4.5 billion
China (Chinese Investment Fund) USD 2.9-9.0 billion.
Brazil USD 1.8 billion Spain USD 600 million
Germany USD 500 million EU USD 200 million
India USD 50 million Portugal USD 1.4 billion
USA (Export-Import Bank) USD 120 million

Web Resources

National Investment Agency of Angola: http://www.investinangola.com
US-Angola Chamber of Commerce: http://www.us-angola.org
Official Republic of Angola Website: http://www.angola.org
National Bank of Angola: http://www.bna.ao
Ministry of Finance: http://www.minfin.gv.ao
Ministry of Public Administration, Employment and Social Security:
http://www.mapess.gv.ao
Commercial Directory of Angola: http://www.dcda.net
National Directory of Internal Commerce: http://www.dnci.net
AngoAccomodation: http://www.angoalojamento.com
2/16/2006
AngolaHosting: http://www.angolahosting.com
LuandaOnline: http://www.luandaonline.com
AngolaPress Agency: http://www.angolapress-angop.ao

[This is a mobile copy of Angola]