New CBN round clarifies present rule on certificates of capital importation for foreign exchange repatriation, divestment
The Central {Bank} of Nigeria (CBN) has issued a clarification on the necessities for divestments and repatriation of overseas investments associated to the Certificates of Capital Importation (CCI).
In a round signed by Dr. W.J. Kanya, the Appearing Director of the Commerce & Alternate Division, the CBN outlined the documentation required for these transactions, reiterating its dedication to making sure compliance in overseas trade actions.
In keeping with the round, the provisions of the Overseas Alternate Guide, particularly Memorandum 20, part 2(vi), are relevant to each divestments and the repatriation of investments linked to CCI transactions.
CBN calls for transaction proof
To make sure full compliance, the CBN has mandated that each divestment or repatriation of overseas funding—whether or not it entails pre-liquidation or matured investments—should be accompanied by two key paperwork:
- Proof of digital Certificates of Capital Importation: This doc is essential for verifying that the preliminary capital importation was duly recorded and acknowledged.
- Proof of redemption of funding in native forex belongings: This consists of proof of redemption in cash market devices, debt securities, equities, or different related native forex belongings.
The round learn: “That is to make clear that the Overseas Alternate Guide, Memorandum 20 part 2 (vi) applies to each divestments and repatriation of all Certificates of Capital Importation (CCI) associated transactions.
“For the avoidance of doubt, each divestment or repatriation of overseas funding be it a pre-liquidation or matured funding, ought to current the next paperwork:
“a) Proof of digital Certificates of Capital Importation. b) Proof of redemption of funding in native forex belongings (cash market instrument, debt securities, equities, and so forth.).”
The round emphasised the significance of those paperwork in facilitating easy and lawful overseas funding transactions in Nigeria.
The CBN urges all events concerned in such transactions to adjust to these necessities to keep away from any regulatory breaches.
What you must know
The Overseas Alternate Guide of the CBN, which was launched in 1995 and was final revised in 2018, comprises detailed data guiding on overseas trade transactions within the nation.
The apex {bank} earlier stopped Worldwide Oil Firms (IOCs) working in Nigeria from instantly remitting 100% of their foreign exchange proceeds to their guardian firm overseas.
In keeping with the preliminary round, IOCs are allowed to repatriate solely 50% of their proceeds instantly whereas the opposite 50% will likely be repatriated 90 days from the day of influx.
It additional issued clarifications on the utilization of overseas trade proceeds by IOCs and one other round asserting that IOCs can promote 50% stability of their repatriated export proceeds to licensed foreign exchange sellers.
Nairametrics earlier reported that Overseas direct buyers tripled their asset disposals in Nigeria, reaching a staggering $200 million, in keeping with the CBN’s {economic} report for the third quarter of 2023.
This determine highlighted a rising development of overseas subsidiary divestiture, with multinational firms transferring enterprise actions outdoors Nigeria.
