Now Reading:

CBN Automates Nigerian Export Proceeds Form ("Form NXP") for Commercial Exports

Business Regulations, Law & Practice	1535 VIEWS
Business Regulations, Law & Practice
1535 VIEWS

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'.

Form 'NXP' for commercial exports are only processed electronically on the CBN's TRMS;
Every export-customer obtains a valid Tax Identification Number ("TIN") from the Federal Inland Revenue Service /Joint Tax Board, as the TIN shall constitute a condition for access to the TRMS;
Adequate web-based system is put in place in order to allow exporters to initiate and generate the e-Form 'NXP' from the comfort of their various locations;
A direct debit mandate is emplaced whereby the fee charged for each declaration for e-Form 'NXP' will be debited first to the relevant Authorized Dealer's current account before the charge is subsequently recovered by the Authorized Dealer from the export-customer; and
Charges imposed on export-customers in relation to the e-Form 'NXP' are separated from other charges levied by the Authorized Dealer.

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.

Recent Articles By Banwo & Ighodalo

1. Patents: The Fitness and Wellness Industry - October 23, 2019

2. Ownership of Trademarks in Nigeria - October 06, 2019

3. Companies Operating In Nigeria To Pay 0.005% Net Profit Levy Under The NPTF (Establishment) Act 2018 - September 17, 2019

4. NAFDAC-Regulated Products Imported Into Nigeria Now To Be Processed On The Nigeria Trade Portal - September 06, 2019

5. National Identity Management In Nigeria: NIMC and Matters Arising - Jul 29, 2019

6. Drilling Rigs Are Not Vessels: Court Of Appeal Pronounces - Jul 25, 2019

7. Nigeria: What You Need To Know About The New Minimum Capital Requirement For Insurance - Jun 03, 2019

8. National Housing Fund Act 2018: Analysis And Recommendations For Legislative Review - May 03, 2019

Contact Persons

Proshare Nigeria Pvt. Ltd.

KEHINDE OJUAWO OLUWATOBA OGUNTUASE

kojuawo@banwo-ighodalo.com ooguntuase@banwo-ighodalo.com

The Grey Matter Concept is an initiative of the law firm, Banwo & Ighodalo.

DISCLAIMER: This article is only intended to provide general information on the subject matter and does not by itself create a client/attorney relationship between readers and our Law Firm or serve as legal advice. We are available to provide specialist legal advice on the readers' specific circumstances when they arise.