CBN to ban defaulting exporters over dollar remittances

Banks’ Chief Executive Officers (CEOs) have been asked to compile and submit to the Central Bank of Nigeria (CBN) the names of exporters with unremitted foreign exchange (forex) proceeds.

The submission is to prepare the ground for the expulsion the defaulting exporter from the banking system.

Official documents showed that the apex bank has tightened the noose on exporters allegedly engaging in sharp practices as part of efforts to stem forex shortage and stabilise forex management.

The CBN move is part of a monetary control mechanism to boost forex positions, especially after the pandemic created a wide disparity between the official exchange and the parallel market rates, eliminating incidences of over-invoicing, transfer pricing, double handling charges.

The CBN has set January 31 deadline for the remittance, failing which erring exporters shall be banned from accessing further banking services.

The exporters have four working days to comply with the directive.

CBN standing policy mandates exporters to repatriate proceeds within 90 days for oil and gas and 180 days for non-oil exports constitute a breach of the extant regulation.

Many of the banks have written to the affected customers, advising them to comply before the deadline of January 31, 2021.

“All customers with un-repatriated export proceeds are therefore required to comply with this directive before the specified date,” a letter sent to customer by a bank stated.

In the letter titled: “Re: Non-Repatriation of Export Proceeds by Exporters” and sent to one of the bank’s CEO, the apex bank said it carried out spot checks and discovered various amount of pending foreign exchange proceeds with the commercial banks.

The apex bank stated that it conducted spot check and discovered that there were unremitted export proceeds amounting to $26.14 million for non-oil in a bank and directed the bank to ensure the full remittance of the outstanding amounts.

However, after reviewing responses received at the expiration of the initial grace period ended October 31, 2020, the apex bank approved additional grace period ending January 31, 2021.

It reads: “Consequently, you are by this letter mandated to request your customers with outstanding export proceeds to repatriate, failing which the customer would be barred from accessing all banking services in line with the provisions of the circular dated 26th October, 2017.

“Accordingly, you are to submit to the Director, Trade and Exchange Department, status report on compliance with this directive by each exporter  before the close of business on Friday, February 5, 2021,”” the letter signed by CBN Director, Trade and Exchange Department, O.S Nnaji, stated.

The CBN had accused shipping and airline companies of not remitting export proceeds to the economy, depriving Nigeria of the much-needed dollar earnings.

The CBN’s Foreign Exchange Manual mandates all exporters to repatriate export proceeds back to the country to increase foreign exchange liquidity, support the naira and lift the economy.

The regulator has been monitoring non-oil exporters, especially airlines and shipping firms and assessing their compliance with the export proceeds repatriation policy.

In a circular to authorised dealers, Nigerian Custom Service, Nigerian Shippers Council, and other stakeholders, Nnaji, said the apex bank had observed with dismay, the non-compliance by shipping and airline companies to its directive on export proceeds remittance.

The CBN guidelines required that Bills of Lading /Airway Bill in respect of exports from Nigeria carry the Central Bank Of Nigeria Automates Nigerian Export Proceeds Form (Form NXP) number in respect of the underlying cargoes.

It also mandated electronic processing of Form NXP on the Trade Monitoring System (TRMS) has not been complied with.

“Shipping and Airlines companies are required to access the TRMS platform to generate Form NXP numbers for capture on the Bill of Lading for export cargoes,” Nnaji said.

The apex bank said all shipment of export cargoes from Nigeria shall henceforth, be in accordance with aforementioned procedures.

The apex bank directed that henceforth, it shall be a breach of extant regulations for any shipping or airline company to take on-board any cargo for which form NXP is not duly completed and approved on the TRMS platform.

The CBN also directed all Nigerian banks to submit the names, addresses and Bank Verification Numbers (BVN) of exporters that have defaulted in repatriating their exports proceeds, for further action.