CBN moves to crack down on Forex abuse by traders
The Central Bank of Nigeria has said it is removing currency abuses and other practices from dealers affecting goods purchased by the average Nigerian consumer.
CBN said this in a circular Monday to all authorized dealers and the public, which was signed by the director, the trade and exchange department, dr. OS NNaji, and entitled ‘Destination payment for all forms M, letters of credit and other forms of payment’.
Nnaji said, “Authorized dealers are hereby directed to refrain from opening Form M if payments are directed through a buyer company / agent or other third parties.
Accordingly, all authorized resellers are only required to open Form M for letters of credit, invoices for collection and other forms of payment for the benefit of the final supplier of the product or service. The directive has immediate effect. ”
He said the directive was part of CBN’s continued efforts to ensure prudent use of the country’s forex resources and to eliminate instances of overbilling, transfer pricing, double handling costs and avoidable costs that were eventually passed on to average Nigerian consumers. .
Nnaji said in line with best practice worldwide that CBN would immediately introduce a product price control mechanism to prevent overpricing and / or incorrect pricing of goods and services imported into the country.
According to the apex bank, all authorized dealers must use the mechanism to verify the quoted prices before form M is approved.
Form M is a mandatory statutory document to be completed by all importers of goods into Nigeria.
Without the form, goods cannot be approved for import into the country.
The documentation process is in place by the federal government through CBN and Nigeria Customs Service.
Form M or E-form M gives the importer access to partial shipments through the use of bulk form M for a large project.