CBN reverses self on third party Form M policy

Harboursandport.com: Lagos - The Central Bank of Nigeria, CBN has reversed its earlier decision of restricting its third party opening of ‘Form M’ for import purposes following complaints Organised Private Sector (OPS).

The CBN in a circular with ref. No TED/FEM/FPC/GEN/01/005 of August 24, 2020, that the provision of “Ultimate Supplier of products” shall be construed to mean “the direct party selling the goods to the Importer Irrespective of whether the party involved is the manufacturer or internationally recognized buying company/ supplier/agent”.  

The circular further stated that “the name of the “Ultimate Supplier of products” should be the same as the beneficiary on the Form “M’, Invoice, Bill of Exchange, Letter of Credit Instrument and any other relevant document to the transaction.

“That Authorised Dealers should ensure that payments are made only to the beneficiary whose name appears on the documents stated in (b) above.

 “That where it is unavoidable that an importer chooses to use a buying company (other than the primary manufacturer), the importer shall make available the following documents (as applicable), for consideration and approval by the CBN before opening Form M.

“Detailed KYC and profile of the buying company; Three-Year Audited Financial Statement of the buying company; Letter of reference from the Buying Company's banker stating relationship and capacity; Transfer pricing policy & arrangements in the home country.

“Registration with its home country’s Chamber of Commerce Evidence of tax payments in the home country ; Evidence of authorization to act as agents and/or distributor to the Original equipment manufacturer.

“All authorized dealers are to ensure that the list of eligible third parties that

meet the requirements above are submitted to the Bank for authentication before on boarding. Please note and ensure strict compliance.

“THE Organised Private Sector, OPS, has come down hard on the recent policy by the Central Bank of Nigeria, CBN, stopping third party opening of ‘Form M’ for import purposes, noting that it will cripple Small and Medium Enterprises, SMEs. The OPS expressed its concern on the issue in Lagos last week at an interactive function put together by the Nigerian Shippers Council, NSC.