CBN, EFCC Set To Investigate, Sanction Defaulters Of Prohibited 42 Items

* As CBN Indicts Banks, Importers, Includes Fertilizers In Prohibition List

By CLEMENT NWOJI, Abuja

The Central Bank of Nigeria (CBN) and the Economic and Financial Crimes Commission (EFCC) are to investigate and sanction companies and banks which have either circumvented the foreign exchange restriction on importation of 42 items into Nigeria.

CBN in a circular to all banks Monday, expressed concern that since the introduction of the policy in July 1, 2015, it has been circumvented by companies thereby making Nigeria dumping ground for such items while some banks had aided the defaulting companies or importers.

In the circular referenced FPR/DIR/GEN/CIW0/019/, dated December 10, 2018 and signed by Kelvin Amugo, Director, financial policy and regulation department of the CBN, the apex bank regretted that the objectives sought to be achieved by the restriction were being eroded through the circumvention.

This even as the apex bank has notified all Authorised Dealers and the general public of the inclusion of “Fertilizer” on the list effective Friday December 07, 2018.

In another circular signed by the CBN Director, Trade and Exchange department, Ahmed B. Umar, notifying the inclusion of fertilizers in the prohibited list, it however assured that “CBN will ensure that transactions (Form ‘M’) on fertilizer for which payments are outstanding are settled at the appropriate settlement dates.”

According to CBN on the circumvention of the prohibited list, “The CBN views this development with trepidation. The Economic Intelligence Unit of the Bank in collaboration with the Economic and Financial Crimes Commission would commence immediate investigation of the accounts of the corporates and entities engaged in this unwholesome act with a view to visiting severe sanctions on all the culprits.

“Such sanctions would among others include blacklisting the corporates and their directors; closure of their bank accounts; and restricting them from maintaining any bank accounts in any bank under the CBN remit.

“Banks that provided their platforms for such economic abuses would also be appropriately sanctioned.”

The full text of the circular reads:

“FOREIGN EXCHANGE RESTRICTION ON THE IMPORTATION OF 42 ITEMS

The Central Bank of Nigeria as part of its developmental objective of employment generation and inclusive growth in Nigeria, on July l, 2015, restricted the availability of foreign exchange to the importation of 41 items, which could be competitively produced within the economy.

This policy has resulted in massive investments and the establishment of cottage industries that now engage in the production of the restricted items across the country. The growth and employment benefits have been phenomenal.

Unfortunately, trade information available to the CBN indicates the circumvention of the policy as the restricted items are being dumped in the country.

The implications are that the growth and employment benefits arising from the policy may be eroded if not checked.

The CBN views this development with trepidation. The Economic Intelligence Unit of the Bank in collaboration with the Economic and Financial Crimes Commission would commence immediate investigation of the accounts of the corporates and entities engaged in this unwholesome act with a view to visiting severe sanctions on all the culprits.

Such sanctions would among others include blacklisting the corporates and their directors; closure of their bank accounts; and restricting them from maintaining any bank accounts in any bank under the CBN remit.

Banks that provided their platforms for such economic abuses would also be appropriately sanctioned. Banks are by this notice advised on strict compliance with the Know Your Customer (KYC) and Know Your Customer Business (KYB) requirements and to be properly guided, please.

Kelvin Amugo, Director, financial policy and regulation department”