Transparency of the Regulatory System
Although parts of the government are working to create more transparent policies for fostering competition, Burundi lacks clear rules of the game. Many policies for foreign investment are not transparent, and laws or regulations on the books are often ineffective or unenforced. Burundi’s regulatory and accounting systems are generally transparent and consistent with international norms on paper, but a lack of capacity or training for the staff and political constraints sometimes limit the regularity and transparency of their implementation.
Rule-making and regulatory authority is exercised exclusively at the national level. Relevant ministries and the Council of Ministers exercise regulatory and rule-making authority, based on laws passed by the Senate and National Assembly. In practice, government officials sometimes exercise influence over the application and interpretation of rules and regulations outside of formal structures. The government sometimes discusses proposed legislation and rule-making with private sector interlocutors and civil society, but does not have a formal public comment process. There are no informal regulatory processes managed by non-governmental organizations (NGOs) or private sector associations.
Accounting, legal, and regulatory procedures are generally transparent or consistent with international norms on paper but are unevenly implemented in practice.
Draft bills or regulations are not subject to a public consultation process. There are no conferences that involve citizens in a consultation process to give them an opportunity to make their comments or contributions, especially at the time of project development, and, even if this were the case, the public does not have access to the detailed information needed to participate in this process.
Burundi does not have a centralized online location where key regulatory actions are published; however, regulatory actions are sometimes posted on the websites of GoB institutions (typically that of the Office of the President or ministries).
Burundi has sectoral regulatory agencies covering taxes and revenues, mining and energy, water, and agriculture. Regulatory actions are reviewable by courts. There have been no recent reforms to the regulatory enforcement system.
The government generally issues terms of reference and recruits private consultants who prepare a study on the draft legislation for review and comment by the private sector. The government analyzes these comments and takes them into consideration when drafting new regulations. New regulations can be issued by a presidential decree or Parliament can make them into a law. This mechanism applies to laws and regulations on investment.
Information on public finances and debt obligations (including explicit and contingent liabilities) is published in the Burundi Central Bank’s Reports and on its website: https://www.brb.bi/ ; however, some publications are not up to date.
International Regulatory Considerations
Burundi is a part of the East African Community (EAC), a regional economic bloc composed by six member states, the republics of Burundi, Kenya, Rwanda, South Sudan, Tanzania, and Uganda. The EAC Integration process is anchored on four pillars: Customs Union, Common Market, Monetary Union, and Political Federation. Each member state must harmonize its national regulatory system with that of the EAC. At the moment, several milestones have been realized under the EAC Pillars; some countries are ahead of others, but the process of harmonization of regulatory systems (national and regional) continues to progress, as does regional integration (progress of the East African Customs Union, the creation of the Common Market and the implementation of the Monetary Union Protocol, etc.).
Burundian law and regulations reference a number of standards, including the East African Standards, Codex Alimentarius Standards, the International Organization for Standardization (ISO), and its own standards. ISO remains the main reference.
The country joined the WTO on July 23, 1995. According to the Ministry of Commerce, Industry, and Tourism, Burundi has not notified the WTO Committee on TBT of all draft technical regulations.
Legal System and Judicial Independence
The country’s legal system is civil (Roman), based on German and French civil codes. For local civil matters, customary law also applies. Burundi’s legal system contains standard provisions guaranteeing the right to private property and the enforcement of contracts. The country has a written commercial law and a commercial court. The investment code offers plaintiffs recourse in the national court system and to international arbitration.
The judicial system is not effectively independent of the executive branch. A lack of capacity hinders judicial effectiveness, and judicial procedures are not rigorously observed.
The investment code offers plaintiffs recourse in the national court system and to international arbitration when necessary.
Laws and Regulations on Foreign Direct Investment
There were no major laws, regulations, or judicial decisions pertaining to foreign investment in the past year. In 2009, the GoB created an Investment Promotion Authority (API) in charge of promoting investment and facilitating market entry for investors in Burundi. API offers a range of services to potential investors, including assistance in acquiring the licenses, certificates, approvals, authorizations, and permits required by law to set up and operate a business enterprise in Burundi. In 2014, API created a follow-up mechanism to make sure that investors are implementing projects for which they received tax exemptions and other advantages provided in the investment code.
In 2018, the Council of Ministers reviewed draft legislation updating the investment code and then referred it to a technical committee for review and improvement; it remains a work in progress. Among other changes, the draft contains new measures to ensure the protection of the property of foreign investors and penalties for malfeasance by foreign investors.
Competition and Anti-Trust Laws
There is no Burundian agency in charge of reviewing transactions for competition-related concerns.
Expropriation and Compensation
Burundian law allows the GoB to expropriate property for exceptional and state-approved reasons, but the GoB is then committed to provide a legal prior fair compensation allowance based on the fair market value.
There are no recent cases involving expropriation of foreign investments nor do any foreign firms have active pending complaints regarding compensation in Burundian courts.
ICSID Convention and New York Convention
Burundi is a full member of ICSID Convention since 1969 and became the 150th country to sign the Convention on the Recognition and Enforcement of Foreign Arbitral Awards (1958 New York Convention). Burundi’s commercial law allows enforcement of judgments in foreign courts by local courts.
Investor-State Dispute Settlement
Burundi is a signatory of International Centre for Settlement of Investment Disputes (ICSID) and Multilateral Investment Guarantee Agency (MIGA) in which international arbitration of investment disputes is recognized. Burundi has no bilateral investment treaty with the United States.
There have been limited instances of foreign investors seeking restitution from the GoB over allegations of breach of contract and corruption.
In cases involving international elements, the GoB accepts international arbitration and recognizes and enforces foreign arbitral awards. There is no history of extrajudicial action against foreign investors.
International Commercial Arbitration and Foreign Courts
In rare cases involving international elements, the GoB accepts international arbitration and recognizes and enforces foreign arbitral awards. In commercial disputes between private parties, international arbitration is accepted as a means of settlement provided one of the parties is an extra-national. In 2007, the GoB created a Center for Arbitration and Mediation (CEBAC) to handle such disputes, but it is not very active.
There is no operational commercial arbitration body in the country besides CEBAC. Foreign arbitral awards are recognized, but local courts are not legally equipped to enforce them. No Burundian private entity has been involved in a foreign arbitration. In the past, one registered case involved the GoB and a private gold refining company. The ICSID ruling was enforced by GoB, which lost the case.
Although there are complaints about the discriminatory and opaque nature of Burundian court processes in general, there are no known cases involving State-Owned Enterprises (SOEs) in investment disputes.
Burundi has two laws governing or pertaining to bankruptcy: Law N°1/07 of March 15, 2006, on bankruptcy and Law N°1/08 of March 15, 2006, on legal settlement of insolvent companies. Under Burundian law, creditors have the right to file for liquidation and the right to request personal or financial information about the debtors from the legal bankruptcy agent. The bankruptcy framework does not require that creditors approve the selection of the bankruptcy agent and does not provide creditors the right to object to decisions accepting or rejecting creditors’ claims.