MADAGASCAR Law and Practice Contributed by: Herisoa Raharimamonjy and Mialy Solofohery, John W Ffooks & Co
period of up to five years. Permit holders can request more favourable measures that would have come about after the date of exercising the stability option. Permit holders will not, however, be allowed to derive benefits from the stability guarantee if they fail to fulfil any of the obligations or terms outlined in their mining specifications. 5.2 Foreign Investment Restrictions and Approvals in the Exploration and Mining Sectors In Madagascar, foreign investment in the mining sector is encouraged but subject to certain regu - lations. The Mining Code and Investment Code set the framework for foreign participation, with the following key points. • Foreign investment approval: While Madagas - car encourages foreign investment, the gov - ernment screens foreign proposals, especially in critical sectors such as mining. The Ministry of Mines and Strategic Resources is involved in reviewing applications for mining permits and other rights, and the Ministry of Industry and Commerce evaluates broader investment proposals, especially those involving foreign ownership. • National interest and security: The Investment Code specifies that investments that could potentially affect national security or strategic resources (such as critical minerals) will be subject to additional scrutiny. The govern - ment may review any significant transactions, particularly if they relate to the ownership or control of natural resources deemed vital for national development. • Environmental and social impact: The Min - ing Code requires mining projects to obtain environmental and social approval before proceeding, ensuring that the exploration and extraction of resources are in line with sus -
tainable development and responsible mining practices. Foreign investors must meet these criteria to proceed with their projects. 5.3 International Treaties Related to Exploration and Mining Madagascar is a member of the Common Mar - ket for Eastern and Southern Africa (COMESA), with which the United States has an agreement to develop trade and investment relations. In 2017, Madagascar signed the Tripartite Free Trade Agreement (TFFA) in association with the East African Community (EAC), COMESA, and the Southern African Development Community (SADC). Madagascar is one of the signatories to the African Continental Free Trade Area (AfCFTA) but is one of the few countries that has still not ratified the agreement. The AfCFTA came into force on 1 January 2021, ratified by 36 countries. According to the UN Conference on Trade and Development (UNCTAD), Madagascar has con - cluded nine bilateral investment treaties (BITs) – with the Belgium-Luxemburg-Economic Union, China, France, Germany, Mauritius, Norway, South Africa, Sweden and Switzerland – and five treaties with investment provisions (the COMESA EU Economic Partnership Agreement (EPA), the COMESA Investment Agreement, the COMESA US Trade and Investment Framework Agreement (TIFA), the Cotonou Agreement and the COMESA Treaty). As a member of the African, Caribbean and Pacific Group of States (ACP), Madagascar signed the interim Economic Partnership Agree - ment (APEi) with the EU in January 2013 to ensure easy access to the EU market and obtain progressive tariff reductions. In reciprocation, European goods, except certain specified ones, are now entering Madagascar without payment of any duty.
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