VZCZCXRO2219
OO RUEHLMC
DE RUEHCO #0448 1721444
ZNR UUUUU ZZH
O 211444Z JUN 07
FM AMEMBASSY COTONOU
TO RUEHC/SECSTATE WASHDC IMMEDIATE 9598
INFO RUEHLMC/MILLENIUM CHALLENGE CORP WASHDC IMMEDIATE
RHEHNSC/NSC WASHDC IMMEDIATE

UNCLAS COTONOU 000448 
 
SIPDIS 
 
SENSITIVE 
SIPDIS 
 
DEPARTMENT FOR AF, AF/W, AF/EPS 
PLEASE PASS MCC FOR JONATHAN BLUME 
 
TAGS: EWWT PREL PGOV EAID EFIN MCC BN
SUBJECT: BENIN PROPOSES TO INSTALL PORT SCANNER OUTSIDE MCC COMPACT, 
CITING SECURITY CONCERNS 
 
 
¶1. This is an action message requesting input.  Please see para 8 
below. 
 
¶2. SUMMARY:  President Boni Yayi told the Ambassador on June 20 that 
Benin plans to purchase and install scanners at the Port of Cotonou, 
Cotonou International Airport and other land border posts for 
reasons of security.  This could violate the conditions precedent of 
Benin's Millennium Challenge Corporation (MCC) Compact and therefore 
trigger funding delays in the Access to Market program.  Post seeks 
Washington concurrence to relay to the President that such 
independent action could jeopardize continued funding under the 
Compact, and propose that he delay any such action until an 
MCC-funded study of the scanner proposal can produce conclusions on 
a scanner's effectiveness.  END SUMMARY. 
 
¶3. During a June 20 meeting with the Ambassador, President Yayi 
indicated plans to purchase and install X-ray container scanning 
systems at the Port of Cotonou, the Cotonou airport, and at least 
two terrestrial border crossings.  President Boni's stated purpose 
for the scanning systems related to security and the need to impede 
the flow of weapons and arms across Beninese territory, some of 
which, he claimed, were being smuggled into or through Benin buried 
in containers of loose grains, such as wheat. 
 
¶4. The installation of a scanner system at the Port of Cotonou 
raises concerns for the US because it is contrary to a condition 
precedent to disbursement for the Access to Markets project in the 
MCC's Disbursement Agreement with Benin, one of several documents 
that defines the scope of MCC program activities and their sequence 
of implementation.  Specifically, the condition reads as follows: 
"The Government complies with agreement not to institute a container 
scanning system at the Port (1) until after a study of the 
effectiveness of such a scanning system has been completed pursuant 
to Section 2(a)(ii); or (2) in the event that MCC determines that 
the Government proposed scanning system would be detrimental to the 
effectiveness of MCC investments and activities at the Port." 
 
¶5. As such, should President Yayi implement the scanner system at 
the Port as he has stated, the MCC Access to Markets program in its 
entirety, $169M, could be stopped. 
 
¶6. The MCC included this condition precedent in the disbursement 
agreement to ensure the USG's $169M investment in Cotonou's port 
infrastructure would lead to the intended goals of the project, 
namely increased efficiency and capacity at the port and greater 
revenue for the government of Benin.  At present, the Port is 
plagued by monumental operational problems that result in reduced 
efficiency, vehicular congestion, and dramatic economic losses 
through lost business, corruption, and reduced volume of merchandise 
passing through the port.  Due diligence by MCC and collaborative 
efforts with other agencies, such as the United States Coast Guard, 
have provided abundant evidence that operational improvements must 
occur prior to the implementation of a scanner system at the Port. 
 
¶7. The MCC has included an analysis of X-ray container scanning in 
its Customs Efficiency Study component of year one activities.  That 
study is currently expected to begin by mid-July; the consultant is 
expected to deliver a comparative analysis of scanning systems in 
other ports after three weeks and a report on appropriate scanning 
solutions for the Port of Cotonou after eight weeks.  If these 
reports identify an appropriate mechanism for introducing container 
scanning at the Port of Cotonou the USG could proceed with the MCC 
program confident that its investment will not be made less 
effective by the President's initiative. 
 
¶8.  ACTION REQUESTED: It is recommended that the Department instruct 
Post to remind the President of the condition precedent to continued 
disbursement of MCC funds for Access to Markets in the MCC Compact 
and encourage him to delay purchase of the subject Port scanner 
until the results of the study expected in mid-July. 
 
¶9. COMMENT:   There is abundant evidence worldwide that the addition 
of a scanner before most of these operational problems have been 
addressed will worsen, not improve, these problems and will thus 
negate or reduce the impact of the USG' MCC investment.  Regardless 
of the security benefits of scanning containers, the introduction of 
an X-ray scanner risks reducing container and goods processing 
speeds, decreasing the customs revenue that both MCC and the 
Government of Benin wish to increase.  In addition, an X-ray scanner 
in the prior to MCC-financed institutional reforms introduces a new 
avenue for corruption.  Both the risk of lost revenue and increased 
corruption work against President Yayi's stated focus on improving 
the port and reducing corruption and thus support the USG's decision 
to insist on the successful conclusion of the  MCC Customs study 
before permitting the scanner system at the Port of Cotonou.  END 
COMMENT. 
 
BROWN