Business Regulations, Law & Practice | |
Business Regulations, Law & Practice | |
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Monday, October 04, 2019 / 04:40PM
/ By Kehinde & Oluwatoba of Banwo & Ighodalo / Header
Image Credit: B&I
On Monday, October 28, 2019, the Central Bank of Nigeria ("CBN"), pursuant to powers conferred on it by the Foreign Exchange (Monitoring & Miscellaneous Provisions) Act, 1995 to issue guidelines regulating export and import trade transactions in collaboration with relevant governmental entities, issued a circular tagged "Automation of Form "NXP" on the Trade Monitoring System ("TRMS") (the "Automation Circular").
As provided in the CBN's Revised Foreign Exchange Manual, 2018 (the
"Revised FX Manual"),
any person intending to export
any product from Nigeria shall, in the first instance, process the Nigerian Export Proceeds Form (generally
known as "Form NXP") through an
Authorized Dealer Bank, irrespective of the value and whether or not payment is
involved. Form NXP is used for commercial exports.
Overview of the provisions of the Automation Circular
Pursuant to the Automation
Circular, with effect from Thursday, October 31, 2019, e-Form 'NXP' has replaced the hard copy Form NXP hitherto used for processing
commercial exports (including oil & gas and non-oil & gas exports) from
Nigeria. As from that commencement date of the automation process, a fee in the
sum of Five Thousand Naira (N5,000.00) shall be charged per declaration for
e-Form 'NXP'.
Transitional Matters
The Automation Circular provides
for a 90-day transition period within which all hard copy Forms NXP,
established prior to the commencement of the automated system (that is, on or
before October 30, 2019), must be utilized. Thus, from October 31, 2019, all
existing hard copy Forms 'NXP' are required to be utilized within 90 days of
their establishment, failing which they will be deemed to have been cancelled.
Commentary
We note that the 90-day
transition period aligns with the number of days within which an expired Form
NXP can be extended, in the first instance, under Memorandum
10 of the Revised FX Manual. However, the only difference is that, after the
transition period, such extension will no longer be granted in respect of any
unutilized hard copy Form NXP.
With the establishment of the
automation process, inter-agency inspection and regulation required in export
processing arrangements are expected to become a lot more seamless and the
length of time required to process export documents substantially reduced
because the TRMS, as a digital platform, provides all the agencies and
intermediaries involved online real-time access to uploaded documents, such as
the e-Form 'NXP'.
Depending on the nature of
goods being processed for export from Nigeria, the agencies and intermediaries
involved in the process include the CBN, Authorized Dealer Banks, Nigeria
Customs Service, Pre-shipment Inspection Agents, Shipping Lines & Airlines, National Agency
for Food and Drug Administration and Control ("NAFDAC"), Standard
Organization of Nigeria, Department of Petroleum Resources, Nigerian Port
Authority, National Bureau of Statistics and the Nigerian Export Promotion
Council.
The
TRMS was developed and is being deployed to facilitate automation of all
foreign exchange forms in Nigeria, which include Form 'M' (for Imports); Form
'NXP'; Form 'NCX' (for Non-Commercial exports); and Form 'A' (for Invisible
Trades). Please recall that, in a coordinated regulatory action undertaken by
NAFDAC and CBN (apparently in furtherance of the objectives of the TRMS), all e-permits/licenses/notices
issued by NAFDAC in respect of NAFDAC-regulated products were, in September
2019, integrated with the CBN's e-Form 'M' on the Nigeria Single Window Trade
Portal.
Obviously, automation of Form
'M' and (now) Form 'NXP' will enhance the country's rate of Trading Across Borders - one of the
reform initiatives of the Presidential Enabling Business Environment Council
(PEBEC) being implemented by the Enabling Business Environment Secretariat
(EBES) through the various National Action
Plans on the Ease of Doing Business in Nigeria.
Going forward, exporters are
advised to take immediate steps towards complying with the new regime of e-Form
'NXP' while also ensuring that hard copy Forms NXP already established are
utilized within the 90-day transition period.
Obviously, automation of Form
'M' and (now) Form 'NXP' will enhance the country's.
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