CBN to clamp down on forex abuse by dealers

The Central Bank of Nigeria (CBN) said it would eradicate the abuse of foreign exchange and other practices by dealers, capable of affecting goods purchased by average Nigerian consumers.

The apex bank made the disclosure in a circular titled, ‘Destination Payment for All Forms M, Letters of Credit and Other Forms of Payment,’ issued on Monday to authorised dealers and the general public, and signed by its Director of Trade and Exchange Unit, Dr O.S. Nnaji.

“Authorised dealers are hereby directed to desist from opening of Form M whose payments are routed through a buying company/agent or any other third parties.

“Accordingly, all authorised dealers are hereby requested to only open Form M for Letters of Credit, bills for collection and other forms of payment in favour of the ultimate supplier of the product or service. The directive is with immediate effect”, Nnaji said.

Read also: CBN forex policy reduced ports business by 62%, 3m jobs lost –Stakeholders

According to him, the directive is part of the efforts by the CBN to ensure prudent use of the country’s foreign exchange resources and avert instances of over-invoicing, double handling charges, transfer pricing and avoidable costs ultimately passed to the average consumer.

The CBN would be instantly launching a product price verification mechanism in accordance with global best practices, Nnaji said, to prevent over-pricing and/or mispricing of goods and services imported into the country.

The regulator requires all authorised dealers to utilise the mechanism to verify quoted prices before Forms M are approved.

Form M is a mandatory statutory document to be completed by importers for all goods imported into Nigeria.

Form M or E-Form M enables importers to access part shipments via the use of bulk FORM M for large projects.

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