Regulatory Alerts2011-10-06 | TED.FEM.FPC.GEN.01.018Rising Demand for Foreign Exchange at WDAS
The Central Bank of Nigeria has observed that oil companies with swap arrangements with the Nigerian National Petroleum Corporation (NNPC) and/or the Petroleum Products Marketing Company (PPMC) are still accessing the WDAS to fund refined petroleum product imports. This is despite having established standby Letters of Credit for lifting crude oil. To address this issue, authorized dealers are now required to ensure that such companies present documentary evidence of NESS fee payment and submit a monthly report on these transactions. Non-compliance may result in suspension of the Authorised Dealership License.
TRADE & EXCHANGE DEPARTMENT 09 46237800 Tel ...
Fax: 09 46237811 Email address:ted@cbn.gov.ng October 5, 2011 TED/FEM/FPC/GEN/01/018 TO: ALL AUTHORISED DEALERS, NNPC, PPMC AND THE GENERAL PUBLIC
Rising Demand For Foreign Exchange At Wdas
It has been observed that Oil companies that have SWAP arrangements with Nigerian National Petroleum Corporation (NNPC) and or Petroleum Products Marketing Company (PPMC) (for which standby letters of credit have been established to lift crude oil for delivery of refined products) still access WDAS to fund the importation of the refined petroleum products, rather than utilize the foreign exchange proceeds from their exports. Consequently, companies engaged in product SWAP arrangements with NNPC/PPMC are not allowed to access WDAS funds for negotiating refined petroleum products import transactions, whether through standby Letters of Credit or Bills for Collection.
Authorized Dealers are therefore, 1. to ensure that such companies show documentary evidence of the payment of the NESS fee of 0.2% of the Free on Board (FoB) value of the crude oil export and copy of the NXP form registered with a bank for the export of the crude oil.
- to submit a monthly report on such transactions upon negotiation to Director, Trade and Exchange Department, CBN Abuja stating:
Name and address of Company
RC No of the Company
Copy each of Form M and NXP
L/C instrument or Bills of Exchange
Copy of NESS fee payment receipt.
Copy of CCI.
- to bring the provisions of the circular to the attention of their customers and ensure strict compliance, as any breach will be sanctioned appropriately, including suspension of Authorised Dealership License.
: DIRECT ADE AND EXCHANGE DEPARTMENT