The Central Bank of Nigeria (CBN) in its latest effort to protect the Naira and the foreign reserve, has doubled down on importers, and those who abuse the Form M system to eliminate over invoicing, transfer pricing, double handling charges and avoidable costs.
The apex bank in a circular referenced: TED/FEM/FP/GEN/01/005, directed to all authorized dealers and general public, dated August 24, 2020 and signed by the Director of Trade and Exchange, Dr Ozoemena Nnaji, instructed all authorized dealers to stop opening Forms M whose payments are routed through a buying company/agent or any third party with immediate effect.
Also in the circular, CBN said it will be immediately introducing a Product Price Verification Mechanism, to prevent over-pricing and mispricing of goods and services imported into the country.
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The circular read; “As part of continued efforts by the CBN to ensure prudent use of our foreign exchange resource and eliminate over-invoicing, transfer pricing, double handling charges, and avoidable cots that are ultimately passed to the average Nigerian consumers, authorized dealers are hereby directed to desist from opening Form M whose payments are routed through a buying company/agent or any third parties.
“Accordingly, all authorized 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 suppliers of the product or service. This directive is with immediate effect.
“Additionally, in line with best practices around the world, the CBN will be immediately introducing a Product Price Verification Mechanism to forestall over-pricing and/or mispricings of goods and services imported into the country. All authorized dealers shall use this mechanism to verify quoted prices before Form M is approved.”
CBN told all Authorized Dealers to ensure strict compliance.