Foreign Exchange Manual, 4th Edition

MEMORANDUM 1 Page 8 | Foreign Exchange Manual 4th Edition 1. Residents of Nigeria are allowed, on application and subject to existing regulations and appropriate docu- mentation, to: ``` a) Make any payment to a person resident outside ``` ``` Nigeria; ``` ``` b) Place any sum to the credit of a person resident ``` ``` outside Nigeria; ``` ``` c) Borrow foreign currency from outside Nigeria. ``` 2. Payments in any foreign currency/security to or for the credit of any non-resident shall be subject to the com- pletion of the appropriate forms, where necessary with supporting documents. 3. All payments in respect of import of goods and services, purchases and sales of foreign currencies outside Nige- ria shall be remitted through an Authorised Dealer Bank. 4. All receipts in respect of export of goods and services by residents of Nigeria shall be remitted through an Authorised Dealer Bank. EXTERNAL TRANSACTIONS

MEMORANDUM 2 Page 9 | Foreign Exchange Manual 4th Edition The foreign currencies listed below are instruments of transactions in the Nigerian Foreign Exchange Market: i. Australian Dollar; ii. Canadian Dollar; iii. CFA Franc; iv. Chinese Yuan/Renminbi; v. Japanese Yen; vi. Euro; vii. Indian Rupee; viii. South African Rand; ix. Swiss Francs; x. United Kingdom Pound Sterling; xi. United States Dollar; xii. Any other currency as may be determined from time to time by the Central Bank of Nigeria. SPECIFIED CURRENCIES

MEMORANDUM 3 Page 10 | Foreign Exchange Manual 4th Edition Title TitleDescription of Form Description of Form Form A Form M Form NXP Form NCX Application to pay for service transac- ``` tions (invisible trade transactions). ``` ``` Application to import goods (visible ``` ``` trade transactions). ``` Application for commercial export of goods and services. Application for non-commercial ex- port of goods and services. Form TE Form TM Declaration of export of foreign cur- rency and financial instruments above US$10,000.00 or its equivalent, pre- cious stones, jewellery and works of ``` art (including antiquities) from Nigeria. ``` Declaration of import of foreign cur- rency and financial instruments above US$10,000.00 or its equivalent, pre- cious stones, jewellery and works of ``` art (including antiquities) into Nigeria. ``` 1. The following Forms and any other form as may be introduced from time to time by the CBN shall be used for foreign exchange transactions:- 2. The following forms shall be used for the declaration of foreign currencies above USD10,000.00 or its equivalent in other currencies. FOREIGN EXCHANGE & DECLARATION FORMS

MEMORANDUM 4 Page 11 | Foreign Exchange Manual 4th Edition 1. Authorised Dealer Banks may deal spot, forward, fu- tures or swaps in foreign currency with: a. Market participants; b. Central Bank; c. Their customers; and d. Any other party the CBN may prescribe from time ``` to time; ``` a. Spot Authorised Dealers may engage in spot foreign ex- change transactions among themselves, with their cus- tomers subject to appropriate documentation, or with the CBN, in any acceptable foreign currency, for deliv- ery within a maximum of T+2 days. All interbank spot transactions shall be executed on an electronic trading system duly approved by the CBN. Authorised Dealer Banks shall maintain adequate credit, settlement, and risk limits for all counterparties participating on the approved trading system and shall strictly comply with the NOP limits, ensuring that no breach occurs at the close of any trading session. Authorised Dealer Banks may also conduct spot foreign exchange transactions in any acceptable foreign cur- rency with non-resident customers/clients, for delivery within a maximum of T+2 days. Where an Authorised Dealer Bank is selling foreign exchange to a customer/ client, such transactions shall be eligible and supported by appropriate and verifiable documentation, in line with applicable regulations. All spot transactions shall be subject to applicable reg- ulatory, AML/CFT, and reporting requirements, as may be prescribed by the Bank or other relevant authorities. b. Forward Contract A foreign exchange forward contract is a contract to purchase or sell a foreign currency for delivery at a future date at a pre-determined exchange rate. It shall be reflected in the bank’s foreign currency trading position on the deal date subject to appropriate docu- ``` mentation: ``` a. A forward contract shall exist for the specific ``` forward deal; ``` b. A deal slip evidencing the deal shall be raised; c. A master foreign exchange agreement duly executed shall exist between the counterpar- ``` ties to the foreign exchange transactions; ``` d. The deal shall be so captured on the bank’s approved trading platform and blotter/led- ``` gers; ``` e. A confirmation of the forward deal shall be ``` sent to the counterparty; and ``` f. The transaction shall be reported to the Cen- tral Bank of Nigeria. i. Authorised Dealer Banks may engage in forward transactions among themselves, with their custom- ers, or with the CBN. ii. For a forward contract to be recognised in the bank’s foreign currency position, it shall have the following characteristics: iii. Authorised Dealers may deal forward with non-res- idents on the following basis:- a. any specified foreign currency against the ``` Naira; ``` b. any specified foreign currency against any other foreign currency. iv. In all cases of forward sales/purchases of foreign currency by Authorised Dealer Banks, the tenor of such transactions shall be as mutually agreed by the counterparties, or as may be prescribed by the Central Bank of Nigeria. v. For customer transactions, relevant documenta- tion supporting the underlying transaction shall be in place on the maturity date before delivery of foreign exchange. vi. Forward contracts shall count as contingent liabili- ties when computing single obligor limits. 2. Spot and Derivative Transactions DEALINGS IN FOREIGN EXCHANGE

MEMORANDUM 5 Page 12 | Foreign Exchange Manual 4th Edition a. Net Open Position Limit vii. Banks shall render monthly returns on forward ``` contracts (sales and purchases) entered into, to the ``` Directors, Banking Supervision Department, Trade & Exchange Department and Financial Markets Departments, Central Bank of Nigeria.. i. Authorised Dealers may engage in swap transac- tions among themselves, with their customers, or with the CBN. ii. Both legs of the swap contract – the ‘near’ (spot) ``` and ‘far’ (forward) legs shall be booked on the deal ``` date of the swap transaction by the Authorised Dealer. iii. All FX swap contracts must be governed by an ISDA Master Agreement or a Repo Master Agree- ment, where applicable to ensure standard. iv. For a swap contract to be so recognised in the bank’s foreign currency position, it shall have the following characteristics: v. In all cases of swap by Authorised Dealer Banks, such transactions are restricted to a tenor mutually agreed by the counterparties, subject to any tenor limits that may be prescribed from time to time by CBN. vi. Extension of swap contracts, where necessary, is allowed, subject to mutual agreement by counter- parties. vii. On maturity of the swap contract, it is mandatory that such funds are used for eligible transactions ``` only (subject to customer transaction). ``` viii. Relevant documentation supporting the underlying transaction shall be in place on the maturity date ``` before delivery of foreign exchange (subject to ``` ``` customer transaction). ``` ix. Banks shall render monthly returns on swap con- tracts entered into to the Directors, Banking Su- pervision Department, Trade & Exchange Depart- ment and Financial Markets Department, CBN. The returns shall also capture all cancelled contracts. i. The Net Open Position (NOP) limit of the overall foreign currency assets and liabilities, taking into cognisance both those on and off-balance sheet, the long and short positions of the CBN’s NOP limit shall not exceed proportions of their share- holders’ funds, as prescribed by the Bank from time to time. ii. Reports shall be submitted electronically to the Directors, Banking Supervision Department and Trade & Exchange Department, Central Bank of Nigeria in the prescribed format, not later than 10 a.m. on the day preceding the reporting date ``` (Business Day). ``` a. A master agreement duly executed shall exist between the counterparties to the transac- ``` tion; ``` b. A swap contract shall exist for each swap deal; c. A deal slip evidencing each deal shall be ``` raised; ``` d. Each deal shall be captured on the bank’s ap- ``` proved trading platform and blotter/ledgers; ``` c. Futures Contract A future Contract is a legal agreement, generally made on the trading floor of a futures exchange, to buy or sell a particular commodity or financial instrument at a predetermined price on a specified future date. d. FX Swap Contract A foreign exchange swap contract is an agreement between two parties to buy and sell a specified amount of one currency against another for settlement on an initial date, and to reverse the transaction on a speci- fied future date by a corresponding sale and purchase of the same currencies at agreed rates. 3. Reporting Requirements on Foreign Currency Exposures of Banks

MEMORANDUM 5 - DEALINGS IN FOREIGN EXCHANGE e. A confirmation of the swap deal shall be sent ``` to the counterparty; and ``` f. The transaction shall be reported to the CBN. Page 13 | Foreign Exchange Manual 4th Edition 1. All inbound FX transfers to Nigeria shall be disbursed to beneficiaries’ bank accounts in Naira or any currency as may be determined by the CBN from time to time. 2. Maximum allowable cash withdrawal for inbound mon- ey transfer shall not be more than the Naira equivalent of USD200.00, and any amount in excess of USD200 shall be paid through an account. ``` Note: Reference shall be made to the IMTO guidelines ``` for detailed information on International Inward Money Transfers. 4. International Inward Money Transfers

MEMORANDUM 5 - DEALINGS IN FOREIGN EXCHANGE All IMTOs shall open Naira settlement accounts and ensure that all transactions are routed strictly through their des- ignated settlement accounts, maintained with Authorised Dealer Banks in Nigeria. 5. Settlement Account Page 14 | Foreign Exchange Manual 4th Edition 1. Authorised Dealer Banks may deal in specified foreign currency on their own account at prevailing exchange rates with: i. Other Authorised Dealer Banks; ii. Bureau de Change; iii. Authorised Buyers (Hotels); iv. Resident individual and corporate entities; v. Non-resident individual and corporate entities; vi. Any other entity as may be approved by the CBN. i. Authorised Dealers may buy and sell foreign currency. Authorised Dealers may: - i. Buy or sell foreign currency; ii. Import and export foreign currency into or out of Nige- ria, subject to prior approval of the CBN. Authorised Dealers and Buyers may purchase foreign currency from individuals visiting Nigeria. At the time of their departure, such visitors may exchange the unutilized balance of Nigerian currency for foreign currency, provided there is evidence of initial conversion. Such an exchange is limited to the amount converted at entry if done through an Authorised Dealer, while an Authorised Buyer can exchange the unutilised balance of the converted amount. 2. Transactions with Resident Individu- als and Corporate Entities 4. Transactions with Visitors to Nigeria 3. Transactions with Non-resident Indi- ``` viduals and Corporate Entities (Oth- ``` ``` er than Visitors to Nigeria) ``` PARTIES TO FOREIGN EXCHANGE TRANSACTION

MEMORANDUM 6 Page 15 | Foreign Exchange Manual 4th Edition 1. Import 2. Export 3. Assurance Policies and Annuities a. Foreign currency, either in cash or any other credit instrument, not exceeding US$10,000.00 or its equiva- lent in other foreign currencies, may be imported into Nigeria by a person without declaration. However, any amount above US$10,000.00 or its equiv- alent in other foreign currencies shall be declared at the point of entry. b. Authorised Dealer Banks can import foreign currency to meet their local cash needs, subject to prior approval of the CBN. b. Authorised Dealer Banks may export foreign currency subject to the prior approval of the CBN. c. Authorised Dealer Banks may send for collection, notes, bills of exchange, promissory notes and drafts denomi- nated in foreign currency. a. The following may be exported from Nigeria: Authorised Dealers may remit: i. Without declaration, foreign currency, either in cash or any other credit instruments not exceeding US$10,000.00 or its equivalent in other foreign currencies. ii. Any amount in excess of US$10,000.00 but not more than US$50,000.00 or its equivalent in other foreign currencies, provided the whole amount is declared at the point of exit. iii. Any amount above US$50,000.00 or its equivalent in other foreign currency, subject to evidence of transaction/procurement through an Authorised Dealer. iv. Foreign currency, drafts, etc, brought into the coun- try less expenses incurred, except foreign currency held as a ship or aircraft fund. a. Proceeds of assurance policies and annuities taken by non-residents where such non-residents do not have ``` non-resident accounts, subject to CBN approval; ``` b. Proceeds of assurance policies and annuities denominat- ed in foreign currency owned by residents for collection at maturity or for endorsement and return to Nigeria, subject to CBN approval. IMPORT AND EXPORT OF FOREIGN CURRENCY, BILLS OF EXCHANGE, ASSURANCE POLICIES, ANNUITIES, ETC

MEMORANDUM 7 Page 16 | Foreign Exchange Manual 4th Edition 1. Personal Travel Allowance and Pil- grimage 2. Foreign Medical Treatment 3. Licensed Hotels ``` The allowable limit for Personal Travel Allowance (PTA) is ``` ``` US$4,000.00 (or it’s equivalent in other currencies) per quar- ``` ter, or as may be prescribed by the CBN from time to time. The disbursement of PTA shall be a minimum of 75% via cards and other approved digital channels, while the remaining 25% shall be paid in cash. Authorised Dealers and Buyers may sell foreign exchange to Nigerians, subject to the following documentation require- ``` ments: ``` Note i. Travellers on Pilgrimage and Medical Treatment shall be entitled to PTA. iii. All international air travellers from Nigeria are quali- fied to access PTA. For the avoidance of doubt, the quarters are defined as ``` follows: January – March, April – June, July – September, ``` and October – December. Only persons 18 years old and above are qualified to purchase PTA. Authorised Dealers may sell foreign exchange for medical treatment outside Nigeria, supported with the following ``` documents:- ``` ``` This is in addition to the documents listed in (1a) above. ``` 3.1 Hotels licensed as Authorised Buyers may purchase any foreign currency from foreign guests, subject to:- 3.2 Authorised Dealer Banks are to ensure that hotels obtain an Authorised Buyer License and a Nigerian ``` Tourism Development Authority (NTDA) certificate be- ``` fore opening a Domiciliary account. 3.3 At the time of departure of the foreign guest, any unutilized Naira balance from the initial foreign curren- cy converted may be exchanged, subject to documen- tary evidence of the initial conversion. 3.4 Monthly returns on the total purchases and sales of for- eign currency, including Nil returns, where applicable, shall be submitted not later than 5 days after the end of each month to the Director, Trade and Exchange Department, Central Bank of Nigeria. a. Issuance of a receipt to the guest indicating; b. The proceeds shall be paid into a domciliary account opened for that purpose. Such funds shall be used by the hotel for eligible transactions or sold to any ``` Authorised Dealer bank in the NFEM; ``` c. A maximum limit of US$10,000.00 or its equivalent in other foreign currencies per approved transaction. i. The name, address and passport number; ii. The amount purchased in foreign currency and the rate at which the amount was purchased. i. A letter of referral from a specialist hospital in Nigeria. ii. A letter issued by the overseas specialist doctor/hospital stating the cost of treatment and maintenance, iii. Payment of the medical fees shall be remitted directly to the overseas hospital, while the maintenance cost shall be in favour of the patient. iv. Where a refund is applicable, the overseas hospital shall transfer the funds directly to the remitting bank in Nigeria. a. Personal Travel i. Completed Form A ii. Valid international passport iii. International return ticket iv. Valid visa or foreign passports of Nigerians with dual citizenship/residence permit b. Pilgrimage Subject to the amount approved by the Federal Govern- ment for intending pilgrims. TRAVELS

MEMORANDUM 8 Page 17 | Foreign Exchange Manual 4th Edition ``` Imports into Nigeria shall be on a Cost and Freight (CFR) ``` basis, except for Oil Importation, where the parties may also choose DAP as an INCOTERM. ``` Note: The allowable limit for imports shortfall/excess ``` shall be +/- 10% of the CFR value on the Form M. a. Certificate of Origin, which shall contain the follow - ing information. b. Final/Commercial Invoice; c. Packing List; d. Shipped/Clean on Board Bill of Lading/Airway Bill/Railway Bill/Road Waybill, and other transport ``` documents; ``` e. Manufacturer’s Certificate of production, the Phy - tosanitary Certificate or Chemical Analysis Report, which shall state standards, where applicable, ``` should be made available; ``` f. Laboratory test certificates for chemicals, foods, beverages, pharmaceuticals, electrical appliances and other regulated products, where applicable. a. Letter of Credit A. Guidelines 1. Any person intending to import physical goods into Nigeria shall, in the first instance, process Form ‘M’ through any Authorised Dealer Bank, irrespective of the value and whether or not payment is involved. 2. The initial validity period of an approved Form ‘M’ shall be as follows: i. Form ‘M’ application No; ii. Detailed description of goods; iii. The port of destination should be specified. iv. Shipment identification, date of shipment, Country of Origin, Country of Supply. i. An approved Form “M” with validity not ex- ``` ceeding three years (i.e. 1,080 days). ``` ii. Funds purchased on a Letter of Credit that are subsequently cancelled shall be refunded at the buying rate on the day of purchase or sale ``` (whichever is lower). ``` 3. Supporting documents shall be clearly marked “VALID FOR FOREX” or “NOT VALID FOR FOREX” as appro- priate i.e., whether or not foreign exchange remittance would be involved. 4. All applications for Form ‘M’ for goods subject to Destination Inspection shall carry the “BA” code, while those exempted shall include “CB” in the prefix of the numbering system of the e-Form ‘M’. Payments for goods exempted from Destination Inspection, under the Scheme, shall not be carried out in the Foreign Ex- change Market, without prior approval from the Central Bank of Nigeria. The list of goods exempted from Des- tination Inspection shall be as approved by the Honour- able Minister of Finance. 5. The relevant pro-forma invoice (which shall have a validi- ``` ty period of 90 days). ``` 6. The Form ‘M’ shall be valid for importation only after ``` registration by the Nigeria Customs Service (NCS). ``` Consequently, Authorised Dealer Banks are to confirm registration of the Form ‘M’ before proceeding with other import processes. 7. In instances where petroleum product transactions do ``` not involve a Ship-to-Ship (STS) transfer from a moth- ``` er vessel to a daughter vessel, the discharge date as ``` recorded on the Out Turn Certificate (OTC) shall be ``` deemed the effective shipment date for foreign ex- change documentation purposes. The Out Turn Certif- icate shall be accepted in lieu of the Daughter Vessel Bill of Lading. A copy of the Mother Vessel Bill of Lading must be submitted/presented alongside the Out Turn Certificate. 8. All imports into the country shall be accompanied by the following documents: 9. The following procedures shall be adopted for payments: • General merchandise: 360 days + 180-day exten- sion by the Authorised Dealer Bank • Capital goods: 720 days + up to 360-day extension by the Authorised Dealer Bank • Further revalidation: Refer to the Director, Trade & Exchange Department, Central Bank of Nigeria IMPORTS

MEMORANDUM 9 Page 18 | Foreign Exchange Manual 4th Edition iii. Submission of Exchange Control Document ``` (ECD) to the Authorised Dealer Banks not later ``` than 90 days from the date of negotiation. iv. For petroleum products, submission of the final shipping documents, including the product certification report issued by the Nigerian Mid- stream and Downstream Petroleum Regulatory ``` Authority (NMDPRA), shall be made within 30 ``` days of the cargo’s arrival. v. All negotiating documents and/or shipping doc- ``` uments (as may be applicable), shall be routed ``` from the Beneficiary/Supplier through his/her bank to the issuing bank. For the avoidance of doubt, on no account shall a bank endorse or pay on documents that do not comply with the routing outlined above. i. The stated fees shall be remitted upon satisfactory evaluation of the project by the Industrial Inspec- torate Department of the Federal Ministry of Indus- ``` try, Trade & Investment; ``` ii. Copies of the Contract Agreement and Pro-forma ``` invoice(s) shall be submitted to: ``` iii. The Nigeria Customs Service shall take cognisance of the value of the shipment and Post-Landing charges as would have been indicated on the Pre-Arrival ``` Assessment Report (PAAR); ``` iv. On receipt of the report of the evaluation from the Federal Ministry of Industry, Trade & Investment ``` (Industrial Inspectorate Department), the Central Bank ``` of Nigeria shall advise NCS on the issuance of PAAR in respect of the retained value, and the Authorised Dealer Bank to remit the same to the beneficiary. a. Authorised Dealer Bank; b. Nigeria Customs Service; c. Federal Ministry of Industry; Trade & Investment ``` (Industrial Inspectorate Department); ``` d. Trade & Exchange Department, Central Bank of Nigeria. 10. For transactions with Post Landing charges, a retention fee of 5-15% of the project cost, as agreed between the importer and the overseas supplier, shall be indicated on both the Contract Agreement and the Pro-forma invoice, which shall form part of the supporting documents for the registration of relevant Form ‘M’. In addition to the provision in 10 above, the following are ``` required: ``` i. Provide clear, unambiguous pro-forma invoice(s) in line with applicable import procedures. ii. Ensure exchange control documents are forwarded to the Authorised Dealer Bank before goods arrival. iii. Submit only genuine and verifiable documents. iv. Comply with all import procedure requirements before submission to the Authorised Dealer Bank. v. Upon registration of the Form ‘M’ by NCS, the importer shall advise the supplier to arrange for the shipment of the goods. vi. Ensure shipping documents reach the Authorised Dealer Bank within 21 days of shipment. b. Bills for Collection ``` Documents (financial, shipping/commercial, and ``` ``` collection order) shall be routed to the presenting/ ``` ``` collecting (buyer’s) bank either directly from the sup- ``` plier’s/remitting bank or through any bank chosen by the supplier, including offshore correspondent ``` bank of the buyer’s bank; ``` For ‘Not Valid’ for foreign exchange transactions, the supplier shall forward the documents directly to the applicant bank that validates the Form ‘M’. B. Import Procedures a. Proforma Invoice; b. Insurance Certificate (local insurance); c. Regulatory Certificate/Permits (e.g. NAFDAC, SON, ``` NMDPRA, NAQS, NESREA etc.). ``` Completed Form ‘M’ shall be submitted electronically to an Authorised Dealer Bank with the following documents: ``` However, the originals of the Documents listed in (1) above ``` shall be sighted by the processing bank prior to validation.

MEMORANDUM 9 - IMPORTS C. Responsibilities of Importer Page 19 | Foreign Exchange Manual 4th Edition i. On consignment of goods for shipment, the overseas supplier shall make available two sets each of original ``` Certificate of Origin (CO); Transport documents (Bill of ``` ``` Lading, Airway Bill, Road Waybill, etc) and Packing list to ``` ``` their bank; ``` ii. On receipt of the documents listed in (i) above, the suppli- er’s bank shall forward them through the relevant corre- spondent bank to the Authorised Dealer Bank for Letter of ``` Credit transactions; ``` iii. For transactions requiring the issuance of eCCI and/or those involving suppliers’ credit, documents shall be sub- ``` mitted by the supplier’s bank to the Nigerian bank; ``` iv. In the case of Bills for Collection transactions, two sets of original documents shall be forwarded to the Authorised Dealer Bank through the supplier’s bank or the offshore ``` correspondent bank of the processing bank; ``` v. For transactions “Not valid for foreign exchange”, two sets of original documents shall be forwarded by the supplier directly to the bank that validates the Form ‘M’. i. Importers shall continue to pay administrative charges as prescribed by the NCS. ii. Applicable exchange rate for the purpose of import duty payments shall be the daily NFEM rate on the date of the duty assessment as published on the CBN website. All imports shall continue to be assessed at the C.F.R. value of ``` the goods; ``` iii. It shall be the duty of the importer’s bank through which the Form ‘M’ was processed to collect the amount of im- port duty as assessed, if it is a Designated Bank. However, for Form ‘M’ transactions processed by a non-Designated Bank, payment of import duty shall be at any of the Des- ignated Banks, while a copy of the duty payment receipt shall be made available to the processing bank by the ``` importer; ``` iv. For transactions in respect of dutiable personal effects, payment of duty can be made at any preferred Designated ``` Bank; ``` v. The Designated Bank will match the printed assessment notice with the electronically received assessment notice ``` for the Single Goods Declaration (SGD). If the information ``` tallies, the bank will receive payments and issue a signed ``` Bank receipt; ``` vi. The Designated Bank shall send a confirmation message to NCS acknowledging receipt of duty and taxes in respect of ``` the SGD; ``` vii. All payments shall continue to be electronically transferred daily by Designated Banks to the respective pool accounts with CBN, failing which necessary sanctions shall apply. i. Upon receipt of the documents listed in C above, the Authorised Dealer Bank shall endorse and validate the documents for the issuance of Pre-Arrival Assessment ``` Report by NCS; ``` ii. For remittance in respect of imports, only the amount on the Commercial Invoice/Final Invoice shall be remitted. Authorised Dealer Banks are to ensure that shipping docu- ments are received within 21 days after shipment and shall ``` retain evidence for the purpose of monitoring by CBN; ``` i. It shall be the responsibility of Shipping lines and other carriers to ensure that all goods being consigned for ship- ``` ment to Nigeria are covered by the appropriate Form ‘M’; ``` ii. The Form ‘M’ number shall be reflected on the Bill of Lad- ing, Airway Bill or Roadway bill for such goods.

MEMORANDUM 9 - IMPORTS D. Responsibilities of the Supplier G. Import Duty Payment E. Responsibilities of Authorised Deal- er Banks F. Responsibilities of Shipping Lines and Other Carriers vii. For all transactions (Valid or not valid), submit shipping documents evidencing receipt of goods to the processing Authorised Dealer Bank. viii. Non-compliance attracts penalties under this Manual. Page 20 | Foreign Exchange Manual 4th Edition i. Registered Form ‘M’; ii. Certificate of Origin (CO); iii. Manufacturer’s Certificate with standards adopted ``` stated thereon; ``` iv. Clean/Shipped on Board Bill of Lading/Airway bill/ ``` Roadway bill, and other transport documents; ``` v. Final/Commercial Invoice; vi. Packing List; vii. Letter of Credit instrument. 1. Letter of Credit Transactions H. Documentation Requirements for Import Payments under the Destina- tion Inspection Scheme i. Certificate of quality/ inspection, detailing petro- leum products specification and issued at the port of loading by the refinery/ independent inspec- tors. ii. In the case of delivery from a mother vessel, a copy of the bill of Lading of the mother vessel shall be an additional requirement. i. Authorised Dealers shall forward applications for the establishment of a Letter of Credit in respect of petroleum products to the Director, Trade & Exchange Department, CBN, for necessary action. i. Registered Form ‘M’; ii. SGD print out; iii. PAAR; iv. Certificate of Origin (CO); v. Manufacturer’s Certificate; vi. Shipped / Clean on Board Bill of Lading/Airways Bill / ``` Road waybill, and other transport documents; ``` vii. Final/Commercial Invoice; viii. Import Duty Payment receipt with SGD No. stated ``` thereon; ``` ix. Bill history; x. Bill of exchange; xi. Tally Sheet/Gate Pass; xii. Packing List. i. Certificate of quality/inspection, detailing the petroleum products specification and issued at the port of loading by the refinery/independent inspectors. ii. In the case of delivery from a mother vessel, a copy of the bill of Lading of the mother vessel shall be an additional requirement. For Petroleum products: For Petroleum products: a. Documents for Negotiation: b. Documents for Registration ``` In addition to the documents in H (1) above, the following ``` shall be provided: ``` In addition to the documents in H (2) above, the follow- ``` ing shall be provided: i. Pre-Arrival Assessment Report (PAAR); ii. Single Goods Declaration (SGD) Print out; iii. Certificate of Origin (CO); iv. Packing List; v. Import Duty Payment receipt with the SGD number ``` clearly stated thereon; ``` vi. Manufacturer’s Certificate with Standards adopted stat - ``` ed thereon; ``` vii. Laboratory/Phytosanitary Test Certificate for chemicals, ``` food, beverages, etc; ``` viii. Terminal Delivery Order/Gate Pass; ix. Bill of Lading/Airway Bill/Road Waybill, and other trans- ``` port documents from NPA; ``` x. Product Certificate for Petroleum products from NMD- ``` PRA; ``` xi. SONCAP Certificate for SON-regulated products. 2. Bills for Collection Transactions

MEMORANDUM 9 - IMPORTS I. Documents to be Submitted by the Importer to the Processing Bank after Clearance of Goods Page 21 | Foreign Exchange Manual 4th Edition Interest on tenured Bills in respect of transactions executed in the Foreign Exchange Market is eligible for payment, subject to a maximum rate of 0.5% above SOFR or any benchmarked interest rate as may be advised by the CBN from time to time and a maximum period of 180 days, calculated on the C&F value on the final invoice. In the case of personal effects, the applicant shall forward relevant documents to the Nigeria Customs Service. Howev- er, where dutiable goods are found to exceed the approved passenger concession, they shall be subject to the clearance procedure applicable to commercial imports. For transactions requiring partial shipment, payment shall be made on the basis of the following documents: i. Approved Form ‘M’ ii. Certificate of Origin (CO) iii. Clean/shipped on Board Bill of Lading/Airway Bill/Roadway Bill, etc. iv. Letter of Credit Instrument (tested) v. Packing List vi. Product Certificate i. Approved Form ‘M’ ii. Duly completed Single Goods Declaration ``` (SGD) form endorsed by NCS ``` iii. Original Clean/shipped on Board Bill of Lading/ Airway Bill/Roadway bill, etc. iv. Certificate of Origin (CO) v. Packing list vi. Product Certificate vii. Bill of exchange viii. Exit Note ``` Copy of approved Form ‘M’ and documents in (i) – ``` ``` (vi) of (1) above ``` ``` Copy of approved Form ‘M’ and documents in (i) – ``` ``` (viii) of (2) above ``` 1. Letter of Credit 2. Bills for Collection a. 1st Shipment a. 1st Shipment b. Subsequent Shipments b. Subsequent Shipments ``` Note: ``` The provision in the above Memorandum remains, subject to review of the Import Guidelines by the Federal Ministry ``` of Finance (FMF). ``` K. Partial Shipments L. Interest Payable on Bills for Collection M. Personal Effects

MEMORANDUM 9 - IMPORTS At every stage of the manufacture of Plant and Machinery on down/instalment payment arrangement, a performance bond and/or bank guarantee by a licensed bank in the exporter’s country shall be put in place to cover the advance payments. Applications for the importation of capital goods requiring ``` down (advance), instalment or deferred payment shall be made ``` to the Authorised Dealer Bank. Down payments shall not exceed 30% of the FOB value of the transaction. The following documents are required:- i. Approved Form ‘M’ covering 100% of the cost; ii. Executed Agreement between importer and exporter; iii. A guarantee or a performance bond issued by a bank in ``` the exporter’s country to secure the down payment; ``` iv. Proforma invoice. v. Invoice or Demand Note (required for subsequent instal- ``` ment payments) ``` J. Down and Instalment Payments for Imports Page 22 | Foreign Exchange Manual 4th Edition In instances where petroleum product transactions do not ``` involve a Ship-to-Ship (STS) transfer from a mother vessel to a ``` daughter vessel, the discharge date as recorded on the Out- ``` turn Certificate (OTC) shall be deemed the effective shipment ``` date for foreign exchange documentation purposes. The Out- turn Certificate shall be accepted in lieu of the Daughter Vessel Bill of Lading. A copy of the Mother Vessel Bill of Lading must be submitted/presented alongside the Outturn Certificate. i. Completed Form ii. Invoice iii. Charter Party Agreement iv. Mother vessel bill of lading v. Reasonableness of freight by the Nigerian Shippers Coun- cil. N. Importation of Petroleum Products ``` using Delivery at Place (DAP) ``` O. Payment of Freight for Importation of Petroleum Products using Ship-to- ``` Ship Transfer (Transfer from a Moth - ``` ``` er Vessel to a Daughter Vessel) ``` The documentation requirements in respect of payment of freight for importation of petroleum products involving ship-to- ship transfer includes:

MEMORANDUM 9 - IMPORTS Page 23 | Foreign Exchange Manual 4th Edition Any person intending to export any product out of Nigeria shall process Form NXP through an Authorised Dealer Bank, irrespective of the value and shall reference the NXP number in all dealings. The processing of the Form NXP shall be free of charge. ``` Note: ``` The allowable limit for export shortfall/excess shall be +/- 10% of the FOB value on the Form NXP. A. Non-Oil Exports i. Exports out of Nigeria shall either be on Free on Board ``` (FOB) or Cost and Freight (CFR) basis and be subject to ``` ``` inspection by the Pre-shipment Inspection Agent(s) (PIA) ``` appointed for that purpose by the Government. ii. The exporter shall open an export domiciliary account with any Authorised Dealer Bank in Nigeria with which the Form NXP was registered. iii. The Exporter shall deliver originals of the shipped or clean on board Bills of Lading and the relevant documents relating to commercial exports directly to the processing/ collecting Authorised Dealer Bank named on the Form NXP. The bank shall then submit the documents through a foreign correspondent bank to the consignee on a collec- tion or negotiation basis and ensure that payment for the shipment is credited to the exporter’s Domiciliary Account within the stipulated period of one hundred and eighty ``` (180) days from the date of shipment. ``` iv. The exporter shall use the NXP number as a reference in all dealings with the issuing bank, the Central Bank of Nigeria, ``` the Pre-shipment Inspection Agent(s), the Nigeria Customs ``` Service, and any other relevant agency. v. The Form NXP shall be utilised within one hundred and ``` eighty (180) days from the date of registration. Upon ex- ``` piration, the bank may process and approve an exporter’s first request to extend an expired Form NXP for a period ``` of not more than ninety (90) days. Any subsequent request ``` for extension shall be submitted by the Authorised Dealer Bank to the Director, Trade & Exchange Department, Cen- tral Bank of Nigeria, Abuja, for determination. vi. Upon approval of the Form NXP by the processing bank, ``` the PIA shall forward the Request For Information (RFI) link ``` to the exporter for completion through the Stakeholders ``` Verification Portal (SVP). The purpose of the RFI Form is to ``` enable Inspection Agents to coordinate with the exporter on a date and time for the inspection. vii. The Pre-shipment Inspection Agent(s) shall inspect the quantity and quality to determine the fair value of goods in collaboration with relevant regulators. viii. The exporter shall be required to pay the assessed Nigeri- ``` an Export Supervision Scheme (NESS) Levy on the export- ``` ``` ed non-oil products (0.5% of the FOB value) through a ``` designated bank after inspection of the non-oil export and deliver the receipt to the PIA. ix. The PIA shall issue a Clean Certificate of Inspection (CCI) in respect of such exports after receipt of Form NXP and NESS Levy receipt. The PIA shall collaborate with other ``` relevant regulatory agencies (e.g., NAFDAC, SON, Plant ``` and Animal Quarantine, Federal Produce Inspectorate, ``` etc.) to conduct quality inspections of regulated products. ``` ``` A Non-negotiable Certificate of Inspection (NNCI) shall be ``` issued by the PIA where a discrepancy exists. x. The exporter shall use the NXP number as reference in all dealings with the Central Bank of Nigeria, the Pre-ship- ``` ment Agent(s) and the Nigeria Customs Service within five ``` ``` (5) days of the inspection. ``` xi. Upon receipt of the RFI and other relevant documents, the PIA shall schedule an inspection at the approved location in the presence of the Nigeria Customs Service and other relevant Agencies within 48 hours, and issue the CCI within 72 hours after inspection of the consignment. xii. Exporters should be aware that once goods have been inspected and a CCI issued, any variation between goods presented for loading and those confirmed by the CCI will render the exporter liable to penalties in accordance with the Laws of the Federal Republic of Nigeria. xiii. The Nigeria Customs Service shall ensure that any cargo without a CCI duly issued by a Government-appointed Pre-shipment Inspection Agent is not loaded into the sea-going vessel, aircraft or border crossing vessel. xiv. Repatriation of Export Proceeds: a. All exporters shall ensure that export proceeds are repatriated and credited to their export domiciliary EXPORTS

MEMORANDUM 10 Page 24 | Foreign Exchange Manual 4th Edition Any person intending to export oil and gas and related products shall process Form NXP and any other form so prescribed through an Authorised Dealer Bank. The following procedures shall apply from the date of issuance of these Guidelines in respect of all Oil, Gas and related products exported from Nigeria: B. Oil and Gas Exports i. All Oil, Gas and related products exported from Nigeria shall be subject to inspection by Pre-shipment Inspection ``` Agent(s) (PIA) appointed for that purpose by the Govern- ``` ``` ment; ``` ii. The exporter shall deliver all originals of shipped or clean on-board bills of lading and all relevant documents relating to commercial exports directly to the processing/collecting bank named on the Form NXP. The bank shall then forward the documents through a foreign correspondent bank to the consignees on a collection or negotiation basis and ensure that payment for the shipment is made and credit- ed to the exporters’ Domiciliary Account in Nigeria within ``` the stipulated period of ninety (90) days from the date of ``` shipment of the goods. iii. The exporter shall open an export domiciliary account with any bank in Nigeria with which the exporter registered the Form NXP initially. iv. The Form NXP shall be utilised within ninety (90) days from the date of registration. Upon expiration, the bank can pro- cess and determine an exporter’s first request for extension of an expired Form NXP for a period not exceeding ninety ``` (90) days. Any subsequent request for extension shall be ``` forwarded by the bank to the Director, Trade & Exchange Department, Central Bank of Nigeria, for determination. v. Upon approval of the Form NXP by the processing bank, ``` the PIA shall forward the Request For Information (RFI) ``` link to the exporter for completion through the SVP. The purpose of the RFI Form is to enable Inspection Agents to coordinate with the exporter on a date and time for the inspection. vi. Upon receipt of the RFI and other relevant documents, the PIA shall schedule an inspection within 48 hours and issue the CCI within 72 hours of the inspection. vii. The inspection shall take place at the oil/gas export termi- nals. The following Government Agencies shall be pres- ``` ent during the exercise; Nigeria Customs Service (NCS), ``` Nigerian Upstream Petroleum Regulatory Commission ``` (NUPRC), Nigerian Midstream, and Downstream Petroleum ``` ``` Regulatory Authority (NMDPRA), Weights and Measures ``` ``` Department (W&M) of the Federal Ministry of Industry, ``` Trade and Investment, the Crude Oil Marketing Division ``` (COMD) of the Nigerian National Petroleum Company ``` ``` Limited (NNPCL) and any other Government Agency that ``` may be assigned. viii. The exporter shall liaise with the Terminal Operator for the provision of necessary logistics to enable the Pre-shipment ``` Inspection Agent(s) to perform the inspection at the export ``` terminal. ix. Units of measurement with respect to quantity determi- nation and quality specification in the oil and gas industry should be appropriately reflected on the NXP Form. x. On completion of loading but before sailing, the Pre-ship- xv. The Pre-shipment Inspection Agent(s) shall submit monthly, quarterly and annual statistical returns on export trans- actions to the Federal Ministry of Finance, Central Bank of Nigeria, Nigerian Export Promotion Council, National Bureau of Statistics, Office of the Secretary to the Govern- ment of the Federation and the Nigeria Customs Service. xvi. Goods prohibited for exportation from Nigeria, as con- tained in the annual Fiscal Policy measures, shall not be inspected by Pre-shipment Inspection Agents. xvii. Export proceeds may be sold to the exporter’s bank or any other bank of the exporter’s choice, in the foreign ex- change market, or utilised for eligible transactions. account in the bank where the NXP was established, ``` within 180 days from the Bill of Lading date; ``` b. Letter of Credit (LC), Bills for collection and advance payment shall be accepted for all exports from Nige- ``` ria; ``` c. It is the responsibility of the Central Bank of Nigeria to monitor Authorised Dealer Banks on the repatriation of all export proceeds.

MEMORANDUM 10 - EXPORTS Page 25 | Foreign Exchange Manual 4th Edition ``` ment Inspection Agent(s) shall issue to the exporter at the ``` terminal a Provisional Certificate of Inspection reflecting the information contained in the Bill of Lading and stating the NXP number. xi. The exporter shall be required to pay to a designated ``` bank within thirty (30) days from the date of shipment, the ``` ``` Nigerian Export Supervision Scheme (NESS) Levy, which is ``` currently 0.12% of the F.O.B value of the exported crude oil/gas and related products. xii. In the event of rejection of product(s) and other related issues, the exporter shall be contacted for explanation. ``` A Non-Negotiable Certificate of Inspection (NNCI) is to ``` be issued by the PIA where a discrepancy exists between the assessed value and the value earlier declared by the exporter. xiii. No export permit shall be processed by the Nigerian Up- ``` stream Petroleum Regulatory Commission (NUPRC) or the ``` Nigerian Midstream and Downstream Petroleum Regula- ``` tory Authority (NMDPRA) for any exporter that defaults in ``` filling out Form NXP and paying the required NESS levy. xiv. Export proceeds may be sold to the exporter’s bank or any other bank of the exporter’s choice, or by issuing instruc- tions to the bank to transfer to any beneficiary to utilise the ``` proceeds for eligible transactions; ``` i. Gifts and Personal Effects ii. Trade samples and printed business matter iii. Plant, Machinery and Equipment for repairs and return xv. The Pre-shipment Inspection Agent(s) shall submit monthly, quarterly and annual statistical returns on export transac- tions to the Federal Ministry of Finance, Central Bank of Nigeria, Federal Ministry of Industry, Trade & Investment, Nigerian Upstream Petroleum Regulatory Commission ``` (NUPRC), Nigerian Midstream, and Downstream Petro- ``` ``` leum Regulatory Authority (NMDPRA), National Bureau of ``` Statistics, Office of the Secretary to the Government of the Federation and the Nigeria Customs Service. ``` Note: NUPRC is responsible for the issuance of the ``` Certificate of Quantity upon completion of loading at the terminal. When payments are not expected for goods to be shipped to any destination outside Nigeria, the Non-Commercial ``` Exports (NCX) Form shall be completed by shippers or their ``` agents and submitted to the Authorised Dealer Bank for approval, subject to the following guidelines:- a. All exporters shall ensure that export proceeds are repatriated and credited to their export domiciliary account in the bank where the NXP was established, ``` within 90 days from the Bill of Lading date; ``` b. Letter of Credit (LC), Bills for Collection, and Advance Payment shall be accepted for all exports from Nige- ``` ria; ``` c. It is the responsibility of the Central Bank of Nigeria to monitor the repatriation of all export proceeds. C. Non-Commercial Exports a. Packing list showing the number, quantity and Naira value of items. b. Clearance from the relevant Government Agency, if any work of art is included. c. Veterinary Certificate of Health, if a pet is included. d. Insurance Certificate and Vehicle License in case of a motor vehicle. e. Resident Permit and Passport, in the case of non-res- idents. a. A letter stating the purpose of exportation, showing the quantity and approximate Naira value of the items. b. Correspondence with the consignee. c. Certificate of Incorporation. d. NEPC registration certificate. a. Certificate of Re-importation issued by the Nigeria Customs Service. b. Correspondence from the consignee agreeing to ``` repair the item(s). ``` c. Duly signed packing list, showing the number of items, quantity and approximate Naira value.

MEMORANDUM 10 - EXPORTS Page 26 | Foreign Exchange Manual 4th Edition iv. Plant, Machinery and Equipment for replacement v. Return of Plant, Machinery and Equipment after execu- tion of the specific contract Authorised Dealer Banks are to ensure that they capture all receipts in respect of service exports by their customers. Service exports include: Service export earnings are to be recorded using the following key documents: Banks are to submit periodic returns to the Central Bank of ``` Nigeria (CBN). ``` ``` Note: ``` The provision in the above Memorandum remains subject ``` to review by the Federal Ministry of Finance (FMF) of the ``` Export Guidelines. D. Service Exports from Nigeriaa. Correspondence from the consignee agreeing to ``` replace item(s). ``` b. Import documents such as a. Documentary evidence of temporary importation issued by the Nigeria Customs Service. b. Contract/Hire Agreement c. The original documents used to import the items, to confirm that no foreign exchange had previously been released. i. Transportation ii. Travel iii. ICT & digital services iv. Professional & business services v. Entertainment vi. Energy, etc. i. Service export invoices ii. Contracts/service agreements iii. Evidence of Foreign exchange inflow. c. Duly signed packing list, showing the number of items, quantity and approximate Naira value. i. Copy of SGD Form ii. Supplier’s invoice iii. Clean/shipped on Board Bill of Lading/Airway Bill/Road Way Bill, etc. iv. PAAR v. Duty Payment Receipt.

MEMORANDUM 10 - EXPORTS Page 27 | Foreign Exchange Manual 4th Edition 1. Applications for imports shall be supported by documen- tary evidence of insurance, which shall be taken in Nigeria and by a company registered in Nigeria. For such insur- ance cover taken overseas, only one’s own funds can be used. However, premium remittances on oil and gas and special risks that have been approved or received prior to Approv- al-in-Principle from the National Insurance Commission can be undertaken in the foreign exchange market, subject to the following documentation requirements. 2. a. Insurers in Nigeria shall not issue to citizens of Nigeria domiciled in Nigeria annuities and policies covering all classes of insurance, which are expressed in foreign ``` currency; ``` b. Annuities and policies covering all classes of insurance owned by residents of Nigeria shall not be assigned to non-residents. 3. Insurers in Nigeria may issue to citizens of Nigeria do- miciled outside Nigeria annuities and policies covering all classes of insurance, which are expressed in Nigerian currency or in any foreign currency. 4. Claims in respect of 3 above will be made in the currency in which the premium was paid. 5. Nigerian insurers, without recourse to the Central Bank of Nigeria, can make insurance payments of the types listed below to beneficiaries outside Nigeria through the Autho- rised Dealer Banks:- 6. A resident of Nigeria who had taken an insurance policy abroad before returning to Nigeria is allowed to remit money to meet premium obligations. The Authorised Dealer through which the remittances are made shall require the policyholder to provide the original of the policy or annuity for sighting. At maturity, the proceeds of the insurance policy shall be repatriated and lodged in the insured’s Ordinary Domiciliary Account. Non-repatriation of matured annuity will attract sanctions. The documentation requirements for remittance for this category of personal insurance are: ``` a) Completed Form ‘A’; ``` ``` b) Demand Note/Invoice for payment of premi- ``` um ``` c) Photocopy of the insurance policy as evi- ``` dence that it was taken abroad. ``` d) Letter of attestation from NAICOM ``` 7. A foreign national who had taken an insurance policy before coming to Nigeria is allowed to pay premium from Personal Home remittance. 8. The following documents are required in respect of remit- tance for re-insurance:- ``` a) Completed Form ‘A’; ``` ``` b) Re-insurance Agreement; ``` ``` c) Letter of Attestation in respect of the genu- ``` ineness of the insurance contract and the reasonableness of the premium issued by the ``` National Insurance Commission (NAICOM); ``` ``` d) Demand Note/Invoice. ``` 9. The following documents are required in respect of remit- tance of insurance for aircraft operating in Nigeria: ``` a) Completed Form ‘A’; ``` ``` b) Valid Air Operator’s Certificate issued by NCAA; ``` ``` c) Insurance Policy; ``` ``` d) Demand note/Invoice from foreign broker/insurer ``` ``` e) Letter of attestation issued by the National Insur- ``` ``` ance Commission (NAICOM). ``` a. Completed Form ‘A’; b. Demand/Invoice from foreign broker/insurer; c. Insurance Policy document; d. Letter of attestation from the National Insurance Com- ``` mission (NAICOM). ``` a. Death claims, maturity proceeds, surrender values, part surrenders and surrenders of bonus due to the insured under life or endowment assurance policies, and payment to an annuitant under an annuity con- tract subject to documentation requirements: i. Completed Form ‘A’; ii. Discharge Voucher iii. Policy document; iv. Letter of attestation from NAICOM. INSURANCE PAYMENTS

MEMORANDUM 11 Page 28 | Foreign Exchange Manual 4th Edition All applications for remittance of foreign exchange in respect of the under-listed transactions are required to be submitted with a completed Form ‘A’ and supporting documents to Authorised Dealer Banks for determination and approval as ``` follows: ``` 1. Down Payment not exceeding 30% of the cost of repairs / maintenance: i. Form ‘A’ must cover 100% of the cost of repairs/ ``` maintenance; ``` ii. Duly executed Agreement; iii. A guarantee or performance Bond for the value of the down payment, issued by a recognised bank in the Country where maintenance/repairs are to be ``` carried out; ``` iv. Demand note/Invoice; v. Confirmation of the reasonableness of the fees from the Nigeria Maritime Administration and Safety ``` Agency (NIMASA) or Nigerian Civil Aviation Authori- ``` ``` ty (NCAA), as applicable. ``` 2. Charter Fees for Fishing Vessels (Trawlers) i. Charter Party Agreement; ii. Evidence of use of the Vessel; a. Certificate of Clearance issued by Nigerian ``` Ports Authority Plc; ``` b. Statement of fish landed (quantity and val- ``` ue), issued by the Department of Fisher- ``` ies, Federal Ministry of Agriculture and ``` Food Security; ``` c. Bill of Lading; d. Ship manifest; e. Confirmation of the reasonableness of the charter fees by the NIMASA. 3. Charter Fees for Bunkering Vessels i. Time Charter Party Agreement; ii. License issued by the Nigerian Mid and Downstream Petroleum Regulatory Agency ``` (NMDPRA); ``` iii. Evidence of the loading schedule from NMDPRA iv. Demand note/Invoice v. Confirmation of the reasonableness of the fees by NIMASA. 4. Charter Fees for Marine Vessels a. Applications for payment of freight rates/ charter party fees by individuals or companies shall be rout - ed through an Authorised Dealer. Listed below are the documentation requirements: i. Sailing Certificate issued by NPA ; ii. Charter Party Agreement; iii. Demand Note/Invoice; iv. Confirmation of reasonableness by the ``` Nigerian Shippers’ Council; ``` v. Form NXP/NCX; vi. Transport Documents (e.g. Bill of Lading, ``` Air waybill and Road waybill) must be sub- ``` mitted by the Shipper to the Nigerian Ship- pers Council within 30 days of confirma- tion of payment of fees vii. Freight invoice. b. Any such applications shall clearly state: i. The name of the individual/compa ny on whose behalf the application is being ``` made; ``` ii. The purpose of the application, i.e. whether it is for confirmation of freight ``` rates or charter party fees; ``` iii. The amount on the invoice by the ``` beneficiary; ``` iv. As for applications for confirmation of Charter Party Fees, the applicant, in addition to the invoice, shall also attach the Charter Party Agreement as well as a ``` photograph/brochure of the vessel(s); ``` v. The area of operation and the precise loca- tion of such a vessel at the time of the ap- ``` plication shall also be clearly stated. (This ``` applies to dredging and other specialised ``` vessels) ``` c. Repairs and Maintenance of Marine Vessels i. Contract stating vessel type and registra- ``` tion; ``` ii. Demand note/Invoice; iii. Evidence that the vessel is owned by a ``` resident; ``` iv. Confirmation of the reasonableness of fees ``` by NIMASA; ``` v. Current certificate of seaworthiness of the vessel issued by NIMASA. ``` NOTE: Marine Vessels, as used here, refer to all ``` watercraft and ocean-going vessels. PAYMENTS IN RESPECT OF MARINE FISHING & SHIPPING VESSELS AND AIRCRAFTS

MEMORANDUM 12 Page 29 | Foreign Exchange Manual 4th Edition 5. Aircraft Lease Payment a. Dry Lease (Lease of Aircraft without crew and insur- ``` ance, but with maintenance reserve). ``` i. Lease/Maintenance Agreement specifying ``` the type and residual value of the aircraft; ``` ii. Federal Ministry of Aviation/NCAA license/ permit to import the aircraft and/or operate the route or to use the aircraft for any other ``` purpose; ``` iii. Aircraft usage as evidenced by the certified aircraft logbook and aircraft approved ``` maintenance intervals; ``` iv. Confirmation of the reasonableness of the lease fee, stating the number of hours, ``` rates and aircraft type by the NCAA; ``` v. Valid Air Operator’s Certificate issued by the NCAA. b. Wet Lease (Lease of aircraft with two sets of ``` crew per aircraft). ``` i. Lease/Maintenance agreement specifying ``` the age of the aircraft and residual value; ``` ii. Federal Ministry of Aviation/NCAA license/ permit to import the aircraft and/or operate ``` the route, or for any other purpose; ``` iii. Aircraft usage as evidenced by the certified aircraft logbook and aircraft approved ``` maintenance interval; ``` iv. Confirmation of the reasonableness of the lease fee, stating the number of hours, ``` rates and aircraft type by the NCAA; ``` v. Line maintenance cost per hour to be ``` determined by aircraft usage; ``` vi. Valid Air Operator’s Certificate (AOC) is- sued by the NCAA. 6. Aircraft Charter Fees i. Charter agreement specifying the purpose, dura- ``` tion, type of aircraft, age of aircraft, among others; ``` ii. Federal Ministry of Aviation/NCAA license/permit to import the aircraft and/or operate the route, or for ``` any other purpose; ``` iii. Aircraft usage as evidenced by the certified aircraft ``` logbook; ``` iv. Valid Air Operator’s Certificate (AOC); v. Air Transport Operator’s Licence (ATOL). Authorised Dealers are to note that aircraft charter for religious pilgrimage will include the total operating cost of the aircraft, e.g., Aircraft Crew Maintenance Insurance ``` (ACMI), plus fuel, handling, Landing and Parking, Navi- ``` gational charges, and Administration costs, plus contin- gency, which the selected airlines would have been paid by the relevant Pilgrims Board. As a result, no additional foreign exchange request would be entertained. 7. Repairs and Maintenance of Aircraft Overseas i. Maintenance Agreement stating aircraft type, age ``` and residual value; ``` ii. Certificate evidencing completion of the job. Certif- icate of Maintenance Release issued by the MRO upon receipt of payment for maintenance. iii. Demand Note or Invoice showing details of repairs/ ``` maintenance carried out; ``` iv. Valid Airworthiness certificate; v. Evidence of usage/check cycles as per ``` authenticated aircraft logbooks; ``` vi. Certificate of registration of the aircraft; ``` vii Airrcraft Maintenance Organisation (AMO) ``` certificate of approval for the workshop issued by the relevant agency in the home country where the repairs would take place, and that issued by the ``` Nigeria Civil Aviation Authority (NCAA). ``` 7.1 The Bill of Sale shall be presented during the initial flight. This will be in addition to: i. The residual value of the aircraft at the time of lease should be used as a reference point for comparing and determining the amount to be paid for the Lease/ Mainte- ``` nance of the aircraft; ``` ii. Evidence of usage of the aircraft should be determined from the logbook certified by ``` the NCAA; ``` iii. Any aircraft for which any form of foreign exchange is being requested shall possess a valid Airworthiness Certificate ``` bearing the aircraft’s serial number; ``` iv. All signatures on documents emanating from the Ministry of Aviation and the Nige- rian Civil Aviation Authority shall be duly verified by Authorised Dealers against those on the relevant specimen signature list before remittance is effected.

MEMORANDUM 12 - PAYMENTS IN RESPECT OF MARINE FISHING & SHIPPING VESSELS AND AIRCRAFTS Page 30 | Foreign Exchange Manual 4th Edition 7.2 Repairs and Maintenance of Aircraft in Nigeria Nigeria i. Duly completed Form ‘A’; ii. Service contract stating aircraft type and maintenance check to be carried out in accordance with the approved maintenance ``` schedule, duly authenticated by the NCAA; ``` iii. Demand Note or Invoice showing details of ``` repairs/maintenance to be done; ``` iv. Valid Airworthiness Certificate; v. Evidence of usage/check cycles as per the authenticated aircraft logbook by the ``` NCAA; ``` vii. Certificate of registration of the aircraft; vi. Photocopies of relevant pages of the passport and a valid entry visa of the for ``` eign aeronautic aviation experts; ``` vii. Certificate issued by the Nigeria Civil ``` Aviation Authority (NCAA), confirming that ``` the repair/maintenance was done in Nige- ``` ria; ``` viii. Certificate of Satisfactory performance issued by the owner of the aircraft. 8. Net Proceeds of Sale of International Air Tickets i. Duly completed Form ‘A’; ii. Auditors report on passengers’ revenue and ex- ``` penditure (Naira and Dollar) for the period or month ``` ``` for which the remittance is to be made; ``` iii. Summary statement of sales and expenditure (in ``` foreign currency and Naira); ``` iv. Direct sales report, including bank tellers (in foreign ``` currency and Naira); ``` v. Agent sales and bank draft (in currency of sale); vi. Evidence of tax paid on the amount to be remitted ``` issued by FIRS; ``` vii. Evidence of Regulatory fees (FAAN, NCAA, NAMA, ``` NAHCO and SAHCOL) supported by necessary ``` receipts or an IATA report showing debits. Explanatory Notes: i. In the case of items (ii, iii and vii), all expenditure and payments shall be supported by necessary ``` receipts; ``` ii. Any Nigerian registered aircraft that engages in international operations shall repatriate the for- eign exchange generated from such operations ``` and use the same for only eligible transactions; ``` iii. Banks should compare the 5% of flown ticket tax payment to the NCAA with the Airline’s total sales in foreign currency and Naira. 9. Documentation in respect of Importation of Marine Vessels and Aircraft Marine Vessels i. Duly completed Form ‘M’ ii. Copy of the purchase agreement, along with the specifications and designs of the vessel iii. Copy of valuation report from a reputable Marine engineer from the country of supply. iv. Certificate of seaworthiness duly issued by NIMASA ``` in the case of Marine Vessels (this is applicable to ``` ``` second-hand vessels). ``` v. Reasonableness of price to be approved by NIMASA vi. Bill of Sale vii. Manufacturer’s Certificate (in the case of a new ``` vessel) ``` viii. Letter of credit instrument (where applicable) ix. Approval of the Federal Ministry of Transport to operate the vessel. 10. Resale/Trade-in of Marine Vessels i. Completed Form NXP ii. Valuation report from the Federal Ministry of Transport in conjunction with NIMASA. iii. Clean Certificate of Inspection (CCI) iv. Bill of Sale, which must be presented during the initial sail. Aircraft i. Duly completed Form ‘M’ ii. Copy of the purchase agreement along with the specifications and designs of the aircraft. iii. Copy of valuation report from a reputable Aircraft engineer from the country of supply. iv. Certificate of airworthiness duly issued by the Nige- ``` rian Civil Aviation Authority (NCAA). ``` v. Reasonableness of the price to be approved by the NCAA vi. Bill of Sale vii. Manufacturer’s Certificate

MEMORANDUM 12 - PAYMENTS IN RESPECT OF MARINE FISHING & SHIPPING VESSELS AND AIRCRAFTS Page 31 | Foreign Exchange Manual 4th Edition viii. Letter of credit instrument (where applicable) ix. Approval of the Federal Ministry of Aviation to operate the aircraft Resale/Trade-in of Aircraft i. Completed Form NXP ii. Valuation report from the Federal Ministry of Aviation in conjunction with the NCAA. iii. Clean Certificate of Inspection (CCI) iv. Bill of Sale, which must be presented during the initial flight.

MEMORANDUM 12 - PAYMENTS IN RESPECT OF MARINE FISHING & SHIPPING VESSELS AND AIRCRAFTS Page 32 | Foreign Exchange Manual 4th Edition Authorised Dealer Banks may approve applications by residents of Nigeria to beneficiaries outside Nigeria for any of the following transactions, subject to the submission of completed Form A and the documentation requirements listed below: 1. Correspondence Courses, Registration, Member- ``` ship Subscription and Examination Fees (Individuals ``` ``` and Corporate Entities) ``` ``` a) Demand Note/Invoice; ``` ``` b) Evidence of membership and/or enrolment; ``` 2. Correspondence Courses, Registration, Subscription ``` and Examination Fees (represented by Local Corpo - ``` ``` rate Entities) ``` ``` a) Subscriber’s list and amount paid; ``` ``` b) Statement of account showing amount collected ``` ``` less local expenses; ``` ``` c) Evidence of operation of a non-resident account in ``` ``` favour of the overseas principal (only for foreign ``` ``` bodies); ``` ``` d) An agreement between the overseas company and ``` local body where the latter runs such a programme ``` jointly with the overseas company; ``` 3. Subscription for Periodicals (Corporates/Individuals ``` Entities) ``` ``` a) Invoice; ``` ``` b) Bank Verification Number (BVN). ``` 4. Books, Magazines and Periodicals ``` a) Invoice; ``` ``` b) Bank Verification Number (BVN). ``` 5. Conference, Seminars, and Training Courses (organ - ``` ised abroad) ``` ``` a) Letter of invitation and estimate of expenses issued ``` ``` by the organising body overseas; ``` ``` b) International Passport biodata page and return ``` ``` air-ticket of the beneficiary/nominee; ``` ``` c) Letter of authority to travel from the Nigerian ``` organisation with the list of the nominees for the course/conference/seminar in case of corporate nominees 6. Conference, Seminars and Training Courses (by for- ``` eign facilitators, organised locally) ``` ``` a) Letter of invitation and estimate of expenses issued ``` by the Nigerian organisation inviting the foreign ``` facilitators; ``` ``` b) Biodata page of International Passport, (Entry and ``` exit immigration stamp and return air-ticket of the ``` facilitators; ``` ``` c) Hotel bills of the facilitator for the period; ``` ``` d) Demand Note from the facilitator or organising ``` ``` company abroad; ``` 7. Board Meetings/Directors’ Fees ``` a) Board resolution for the meeting and/or Directors’ ``` ``` Fees; ``` ``` b) Evidence of Board Membership, i.e. letter of ap- ``` ``` pointment; ``` ``` c) Evidence of tax paid on the amount to be remitted ``` ``` in the case of Directors’ fees; ``` ``` d) Bank Verification Number (BVN). ``` 8. Information Technology (IT) Transfer ``` a) License Agreement as approved by NOTAP; ``` ``` b) Demand Note/Invoice; ``` ``` c) Confirmation of Reasonableness of fees by NOTAP; ``` ``` d) Copy of Certificate of registration from NOTAP. ``` ``` Note: ``` i. All applications for IT Agreements shall provide concrete evidence of a Letter of Award/Contract for supply from the end-users of the products or third parties. ii. The applicant should also submit a copy of the certificate of installation for the work completed. iii. All applicants for IT Agreements shall complete ``` the Technology Transfer Agreement (TTA) ``` Pre-Qualification Form in addition to the Applica- tion Form and NOTAP Questionnaire iv. Applicants shall submit invoices from the licensor for the payment of software license fees. The ``` invoice(s) shall cover the total remittable fees ``` on the software license agreements and shall also contain the names of the licensor, the licens- ee, types of software products and the end-users Detailed information about the licensor, includ- ing their website, postal address, and other rele- vant details, shall be provided. 9. Software License/Subscription ``` a) License Agreement as approved by NO- ``` ``` TAP; ``` ``` b) Demand Note/Invoice; ``` ``` c) Confirmation of Reasonableness of fees by ``` ``` NOTAP; ``` ``` d) Certificate of registration from NOTAP. ``` MISCELLANEOUS PAYMENTS

MEMORANDUM 13 Page 33 | Foreign Exchange Manual 4th Edition ``` Note: Three types of fees are usually approved under ``` Software License Agreements, depending on the agreement’s components and the parties’ request. The fees are: i. Software License fees – A lump-sum depending on the type of software product, the number of end-us ers and the prevailing rates of fees for similar products by the same licensor in the industry where ``` the software is to be used; ``` ii. Implementation fees – A lump-sum depending on the obligations to be rendered by the licensor, i.e. whether the implementation involves any/all of ``` customisation, upgrading, training, etc.; ``` iii. Annual Technical Support (ATS) fees – A fee not exceeding 23% of the Software License. The pay- ment of the fee should commence after the first year of the agreement’s implementation. 10. Manufacturing/Technical/Consultancy Service Agree- ment Fees ``` a) Technical Service Agreement as approved by NO- ``` ``` TAP; ``` ``` b) Evidence that the services were rendered locally ``` ``` (e.g. hotel bills or relevant Biodata page of the In ``` ``` ternational passport, (Entry and exit immigration ``` ``` stamp), visa and air-tickets of the technical experts); ``` ``` c) Certificate of satisfactory completion issued by the ``` ``` Nigerian employer; ``` ``` d) Demand Note/Invoice; ``` ``` e) Certificate of registration and confirmation of the ``` reasonableness of the fees from NOTAP. Note i. Technical Service fees shall be settled on a per diem, man-hour, man-day, or man-month basis, and not tied to net sales/turnover. ii. Detailed information about the technical experts coming to tender the services in Nigeria, i.e. qualifications, duration of stay, per diem/monthly rate, shall be submitted. iii. If the duration of stay for the experts exceeds six months, they should be paid salaries in the local currency, which they can remit abroad ``` through Personal Home Remittance (PHR). ``` iv. Remittable consultancy fees shall be 1-3% of net sales, subject to a maximum of 5% of project cost and limited to projects of very high technology content for which indigenous expertise is not available. Service agreement for such high-technology joint ventures shall contin- ue to include a schedule for the training of Nige- rian personnel for eventual takeover. In addition, Nigerian professionals shall be involved in the project implementation from the inception. 11. License (Franchise, Patent, Trademark, Know-How) Agreement fees ``` a) License Agreement as approved by NOTAP; ``` ``` b) Evidence of tax payment based on the audited ``` ``` account; ``` ``` c) Audited Account for the period of remittance; ``` ``` d) Confirmation of Reasonableness of fees by NOTAP; ``` ``` e) Certificate of registration from NOTAP. ``` ``` Note: Approval for License Agreements in respect ``` ``` of Trademarks (0.5% of net sales); Franchise (initial/ ``` basic fee which is lump sum, franchise/continuing fee 0.5%-2% of net sales or revenue and marketing/ ``` advertising fee 1% of net sales or revenue); Patents, ``` Know-How and other Industrial Property Rights shall range between 0.5% to 5% of net sales value or profit before tax where net sales value is not appli - cable. All patents, trademarks, industrial designs, etc. shall be registered in Nigeria, with proof of the registration. Technology transfer fees should be based on locally manufactured goods, rather than imported goods. Companies with multiple product lines should sep- arate the net sales of each product in their audited accounts, so as to pay royalties for specific products covered by industrial property rights, rather than on the company’s total sales. Payment for the Trademark License Agreement will only be allowed where: • it is internationally recognised and accompanied ``` by licensed know-how; ``` • the product involved in the agreement is locally ``` manufactured and is for export; ``` • the owner does not have up to 75% of the equity in the local company.

MEMORANDUM 13 - MISCELLANEOUS PAYMENTS Page 34 | Foreign Exchange Manual 4th Edition 12. Outright Purchase of Trademark, Franchise and Pat - ``` ent: ``` License Agreement, which involves outright purchase of Trademark, Franchise and Patent, shall be supported with a completed Form ‘A’ and the following documen- tation requirements: ``` a) Purchase Agreement as approved by NOTAP; ``` ``` b) Demand Note/Invoice; ``` ``` c) Confirmation of the reasonableness of the fees by ``` ``` NOTAP; ``` ``` d) Certificate of registration from NOTAP. ``` 13. Management Services Agreement Fee ``` a) Copy of Management Service Agreement as ``` ``` stamped and approved by NOTAP; ``` ``` b) Certificate of registration issued by NOTAP; ``` ``` c) Demand Note/Invoice; ``` ``` d) Certificate of satisfactory completion of the job ``` ``` issued by the Nigerian employer; ``` ``` e) Evidence of tax payment on the amount to be remit- ``` ``` ted; ``` ``` f) Confirmation of Reasonableness of fees by NOTAP. ``` ``` Note: ``` i. The Management Services Agreement shall spec- ify the details of the services to be rendered, including personnel, cost implications, and other relevant details. ii. A management fee ranging from 1% to 5% of profit before tax should apply to management services, except for the management of Hotels by International Hotel chains. However, manage- ment services projects where profit is not antici- pated during the early years will attract a fee ranging from 1% to 2% of net sales during the first three to five years only. For the avoidance of doubt, Banks and other financial institutions are not allowed to engage in Management or Technical Services. 14. Hotel Services ``` a) Management Service Agreement as approved by ``` ``` NOTAP; ``` ``` b) Demand Note/Invoice; ``` ``` c) The Audited accounts for the period of remittance; ``` ``` d) Evidence of tax payment; ``` ``` e) Confirmation of the reasonableness of the fees by ``` ``` NOTAP; ``` ``` f) Certificate of registration from NOTAP. ``` ``` Note: A basic fee or lump sum not exceeding 5% of ``` turnover plus an incentive fee not exceeding 8% of ``` Gross Operating Profit (GOP) - is Total Revenue mi - ``` nus Operating Expenses, shall be applicable. Other payments which are internationally accepted within the applicable hotel chains may also be allowed. Only hotels initially located in disadvantaged areas will be subject to the upper limits of the basic and incentive fees. Hotels located in disadvantaged/rural areas shall attract a higher rate, the maximum being 8% of GOP, while Hotels located in cities like Abuja, Lagos, Port Harcourt, etc., shall attract a lower rate, the maxi- mum being 5% of GOP. 15. Service Charge for Repairs of Machinery and Equip- ment in Nigeria ``` a) Service Agreement; ``` ``` b) Evidence that the services were rendered locally ``` ``` (e.g. hotel bills, copies of relevant pages of passport ``` ``` (Entry and exit immigration stamp), visa and air-tick- ``` ``` ets of the foreign experts); ``` ``` c) Certificate of satisfactory completion of the job ``` ``` issued by the Nigerian company; ``` ``` d) Demand Note from the beneficiary. ``` 16. Service Charge for Repairs of Machinery and Equip- ment Overseas ``` a) Service Agreement/letter of authority to carry out ``` ``` repairs; ``` ``` b) Completed Form NCX duly endorsed by the Nigeria ``` ``` Customs Service; ``` ``` c) Certificate of re-importation issued by the NCS; ``` ``` d) Certificate of satisfactory completion of repairs ``` issued by the Nigerian company. 17. Telecommunication Charges Authorised Dealer Banks are to note the following ``` telecommunication charges for Determination; ``` ``` • Satellite Bandwidth Charges; ``` ``` • Marketing/Publicity (Overseas) Charges; ``` i. Workshops, Trade (Exhibition) fare/charges; ii. Roaming (Bills Settlement) charges; iii. International Traffic (Bill Settlement) charges; iv. Internet Hosting Charges.

MEMORANDUM 13 - MISCELLANEOUS PAYMENTS Page 35 | Foreign Exchange Manual 4th Edition Accordingly, the following documentation requirements ``` shall apply; ``` i. Service/License Agreement with an offshore Telecommunication Company as approved ``` by the NCC; ``` ii. Demand Note/Invoice; iii. Certificate of Registration/License with the ``` NCC; ``` iv. Confirmation of reasonableness of fees by the NCC. 18. Payment for Technology Transfer Agreements General Requirements All applications for Technology Transfer Agreements should be governed by the following rules: i. Technology contracts should include a provision whereby the recipient enterprises in Nigeria acquire explicit rights for the use and exploitation of the technology in question, and the period covering these rights should be clearly specified in the con- tract. ii. In cases where a Nigerian enterprise acquires the right to practice a process, the concept of know- how should be clearly expressed and defined in the contract. In this connection, concepts such as “tech- nical information” or “technical services” should only be treated as complementary to the know-how iii. Provision for capacity building shall be part of all Agreements signed, and details on Nigerians under- studying the experts should be readily available/ submitted, to ensure that the skills acquired, are domesticated. iv. All contracts should provide for the deduction of appropriate local taxes, such as withholding tax. v. All agreements should incorporate research activ- ities carried out in-house and in collaboration with the Nigerian National Innovation System, such as Universities, Research Institutes, private laborato- ries, Polytechnics, etc. vi. Companies that sell imported products should separate the net sales of imported products from those of locally manufactured products, and this should be reflected in their Audited Accounts. Pay- ment of technology fees should be based only on the locally manufactured products. vii. All Nigerian Government Projects shall be governed by Nigerian Laws of Arbitration, and the seat of arbitration shall be in Nigeria. viii. There would be no approval for an agreement based on the assembly of Completely Knocked ``` Down (CKD) parts or finished products brought into ``` the country, except for payment for short-term tech- nical services relating to such a project. ix. The scope of services in technology transfer agree- ments should clearly state the services to be ren- dered by the transferor/licensor. x. The technology content of the agreement should outline the methods for domesticating technology, developing local raw materials, and acquiring skills, among other relevant aspects. xi. A detailed plan for the local development and pro- duction of raw materials used in manufacture, as a substitute for imported raw materials, should be attached to the agreement. xii. All fees for technology transfer agreements relating to packaging should be tied to profit before tax. However, where the company’s equity is wholly foreign-owned, evidence of capital importation should be provided to enable transferors to repatri- ate their earnings. xiii. Submission of Shareholders’ resolution that the Company should register or renew a Technology ``` Transfer Agreement (signed with its technical part- ``` ``` ner) with NOTAP. ``` xiv. Original copies of Audited Annual Accounts should be submitted to NOTAP. xv. In the Telecom sector, no Trademark License Agree- ment is allowed as the reputation of the service pro- vider has been considered by the Nigerian Commu- ``` nications Commission (NCC) before a License is ``` granted for the provision of such services. However, for purposes of ownership and also to prevent in fringement, Trademarks should be registered at the Patent and Trademark Registry, Federal Ministry of Industry, Trade and Investment. xvi. Payments involving foreign technology shall be subject to NOTAP’s registration. 19. Judgement Debt Remittance in respect of judgement debt shall be al- lowed only after approval–in–principle has been ob- tained from the Central Bank of Nigeria. Consequently, applications for Approval–in–Principle

MEMORANDUM 13 - MISCELLANEOUS PAYMENTS Page 36 | Foreign Exchange Manual 4th Edition shall be forwarded to the Director, Trade & Exchange Department, Central Bank of Nigeria and supported with the following documents: i. Certified true copy of the judgement; ii. Audited accounts of the Defendant(s) company for ``` the last three (3) years and that of the period when ``` the transaction took place, if not included among ``` the three (3) years; ``` iii. Power of Attorney granted by the judgement credi- ``` tor to the applicant; ``` iv. Certified copies of documents evidencing the un- derlying transaction, such as Form ‘M’, PAAR, ``` (where applicable), final attested invoice, Bill of ``` Lading, Customs Bill of Entry/SGD Form. In the case of invisible imports, Form ‘A’, service agreement, current invoice/demand note, NOTAP certificate, where applicable, etc, v. Source(s) of funding the remittance, including ``` statement of accounts of the Defendant(s), duly ``` ``` certified by the issuing bank(s). ``` 20. Advertisements Outside Nigeria (through Local ``` Agent) ``` All payments for advertisements outside Nigeria shall be made into an approved non-resident account of the overseas advertising agency, subject to the submission of a completed Form ‘A’ and the follow - ing documentation requirements:- i. Agreement on the advertisement; ii. Demand Note/Invoice; iii. Evidence of operation of a non-resident account. ``` 20.1. Advertisement Outside Nigeria (without ``` ``` Local Agent) shall not be valid for forex ``` i. Agreement on the advertisement; ii. Demand Note/Invoice. 21. Remittance of Proceeds from Trade Fair Participation by Non-Residents i. Certificate of participation at the Trade Fair, duly ``` issued by the Chamber of Commerce/Organisers; ``` ii. Letter of invitation and acceptance to participate; iii. Evidence of Sales (e.g. counterpart of sales invoice, ``` etc.). ``` 22. International Transportation and Delivery Service ``` (Courier Service) ``` i. Agreement between the Nigerian company and the ``` foreign company; ``` ii. Current Demand Note/Invoice; iii. Evidence of delivery of messages/parcels in Nigeria; iv. Statement of account of the company with the evi- dence of netting of accounts. 23. Aerial Survey i. Service/contract Agreement; ii. Approval from the Federal Ministry of Aviation to ``` carry out the aerial survey; ``` iii. Evidence of tax payment on the amount to be remit- ``` ted; ``` iv. Demand Note from the foreign company. 24. Down Payments on Invisible Trade Transactions Down payments on invisible trade transactions shall be 30% of the invoice value, subject to the following documentation requirements: i. Form ‘A’ covering 100% of the cost; ii. Executed Agreement between the two parties; iii. A guarantee or performance bond issued by a bank in the beneficiary’s country, to secure a down pay- ``` ment; ``` iv. Proforma invoice. 25. Payment for Demurrage Procedure for the confirmation of reasonableness of Demurrage Payments by the Nigerian Shippers’ Council ``` (NSC); ``` i. Obtain a certificate of registration with NSC. ii. Applications for Confirmation of reasonableness of Demurrage Payments shall be submitted to the Nigerian Shippers’ Council on the approved NSC Portal. ``` There are essentially two (2) types of demurrage in com- ``` mercial shipping operations: i. Ship demurrage ii. Container demurrage ``` Fees collected for demurrage (ship or container) and ``` deposited in a dedicated account specifically for this purpose can be repatriated, subject to the following documentation requirements: ``` a) Evidence of tax payment on the amount to be remit- ``` ``` ted; ``` ``` b) Audited Account for the relevant period; ``` ``` c) Manifest of the Ship; ``` ``` d) Copies of receipts issued to the Importer by the ```

MEMORANDUM 13 - MISCELLANEOUS PAYMENTS Page 37 | Foreign Exchange Manual 4th Edition ``` Shipping line; ``` ``` e) Agreement between the local shipping agent and ``` ``` the principal overseas; ``` ``` f) Demand Note/Invoice; ``` ``` g) Evidence of Payment of demurrage charges into the ``` ``` dedicated account; ``` ``` h) Certification of arrival of the Vessel by the NPA; ``` ``` i) NSC confirmation of reasonableness of demurrage ``` ``` payment; ``` 26. Mortgage Servicing i. Mortgage agreement (copy) in the name of the resi- ``` dent; ``` ii. Schedule of outstanding liability on the mortgage; iii. Letter of request from the applicant; iv. Evidence of tax payment in Nigeria. ``` Note: ``` However, for the avoidance of doubt, the amount of foreign exchange paid for Mortgage Servicing shall not exceed the taxable value on the income earned. ``` There shall be no advance or arrears payment; pay- ``` ment shall be a maximum of $5,000 per month. 27. International Rating Agency Fee i. Duly executed agreement for the rating; ii. Demand Note/Invoice; iii. Evidence of satisfactory completion of the rating, ``` issued by the employer (Nigerian entity). ``` 28. Payment of Foreign Solicitor’s Fee i. Agreement with the Foreign Solicitor specifying the ``` type of service to be rendered; ``` ii. Award letter; iii. Evidence of tax payment in Nigeria; iv. Evidence of provision of the service as stated by the ``` employer (Nigerian entity); ``` v. Demand Note/Invoice; 29. Contract Service Fee i. The service agreement shall be scrutinised to as certain the amount of the service fee payable in foreign exchange, and approval of the terms of the agreement shall be sought from the relevant profes- sional body. ii. The bill submitted by the organisation rendering the service shall be scrutinised and compared with the amount of service fee specified in the service agreement. iii. Where an attestation is required from a relevant professional body in the related field, indicating that the services to be rendered cannot be provided lo- cally, it shall be called for, scrutinised, and the signa- ture on it confirmed with the issuing professional body. iv. It shall be certified that appropriate tax was paid on the amount to be remitted as a service fee. The sig- nature on the tax clearance certificate shall be veri- fied against that on the specimen signature list. Accordingly, the following documentation requirements ``` shall apply; ``` a. Service agreement; b. Confirmation of service fee; c. Demand Note/invoice; d. Evidence of tax paid on the amount to be remitted. 30. Brokerage/Margin Fees on investment paid to Off - shore Brokers ``` (Fees charged by agents to facilitate transactions be- ``` ``` tween buyers and sellers.) ``` Accordingly, the following documentation requirements ``` shall apply; ``` i. Copy of duly executed broker agreement; ii. Demand Note/invoice from offshore broker; iii. Evidence of equity or NGN security trade; iv. Certificate of Capital Importation. 31. Operation of the disbursement account All foreign shipping companies/local agents shall be required to maintain disbursement accounts with Authorised Dealer Banks into which inflows from their principals shall be lodged for the purpose of payment of statutory fees and other related charges to Nigerian ``` Ports Authority (NPA), Nigerian Maritime Administration ``` ``` & Safety Agency (NIMASA) and other local shipping ``` charges that are foreign currency denominated. Accord- ingly, foreign shipping companies with local agents shall not be allowed to access the market to pay statutory charges/fees. 32. Remittance by Technology Companies The following documents are required. ``` i) Schedule of collections breakdown for the period ``` ``` (showing product type, number of customers, cost ``` ``` of subscription and total remittance value in Naira) ``` ``` ii) Evidence of Tax remittance for the period ```

MEMORANDUM 13 - MISCELLANEOUS PAYMENTS Page 38 | Foreign Exchange Manual 4th Edition ``` iii) Copy of a valid SCUML certificate ``` ``` iv) Where investment proceeds are being remitted, the ``` investment history is also required. The Authorised Dealers are required to note the follow- ing. ``` i) Technology Companies are required to be incorpo- ``` rated in Nigeria. ``` ii) Remittance can only be made to the parent compa- ``` ny’s account. Third-party remittance is not allowed. ``` iii) Technology Companies are required to open a dedi- ``` cated collection account with any bank of their choice. ``` iv) Where the vendor decides to utilise proceeds from ``` ``` the collections account to invest (e.g. Money Mar- ``` ``` ket, Treasury Bills, etc), proceeds of such investment ``` ``` will be eligible; however, investment history shall be ``` required as additional documentation. ``` v) Auditor’s report on the revenue and expenditure for ``` the period for which remittance is to be made. ``` vi) Companies such as adult entertainment, gambling, ``` drugs, weapons, ammunition and any company that the Bank may prescribe from time to time are ex- empted from this program. ``` vii) Authorised Dealers are mandated to perform KYC ``` on the vendors. 33. Pan African Payments Settlement System (PAPSS) PAPSS transactions in Nigeria are guided by the ``` following: ``` i. The use of basic documentation (KYC & AML) pro- vided by the customers to the Authorised Dealer Banks for transactions with thresholds below is now allowable. a. For individuals: From USD2,000 and below or its equivalent monthly. b. For corporates: From USD5,000.00 and below or its equivalent monthly. ii. For transactions above USD2,000 and USD5,000 for individual and corporate respectively, all relevant documentation requirement according to extant regulations are mandatory. iii. Applicants shall be responsible for ensuring that regulatory documents are made available to facili- ``` tate the clearance of goods (as may be requested ``` ``` by the relevant Government Agencies). ``` iv. ADBs are allowed to source foreign exchange for the settlement of PAPSS transactions through the Nigerian Foreign Exchange Market. v. All export proceeds repatriated under PAPSS shall be subject to certification by the respective process- ing banks 34. Guarantees/Performance Bonds Authorised Dealers may provide the following facilities to their customers without recourse to the Central Bank of Nigeria. i. Guarantees on behalf of their customers in the ordinary course of business, such as guarantees given in respect of missing documents, the authen- ticity of signatures, the release of goods under trust, ``` receipts, e.t.c.; ``` ii. Dealings in any guarantee or similar undertaking, the implementation of which involves or would involve a payment to a resident outside Nigeria or a payment in any foreign currency. ``` Note: ``` For the avoidance of doubt, payments for Guaran- tees/Performance Bonds shall be without recourse to ``` the Nigerian Foreign Exchange Market (NFEM). ```

MEMORANDUM 13 - MISCELLANEOUS PAYMENTS Page 39 | Foreign Exchange Manual 4th Edition Pricing and payment of products and services provided by a Nigerian company to another Nigerian company shall be in Naira only. Except in instances where such has been expressly permitted by law or statute, the use of foreign currency for the payment of goods and services in Nigeria is prohibited. However, the under-listed revenue-generating agencies of the Government and Operators permitted by law, whose business transactions allow payments/receipts in foreign currency, are exempted. These include: 1. Nigeria Revenue Service 2. Nigerian Ports Authority 3. Nigerian Maritime Administration and Safety Agency 4. Nigerian Airspace Management Agency 5. Nigerian Shippers Council 6. Licensed Operators in the Oil and Gas including Oil Services Companies and the Extractive Industry 7. Licensed Operators in the Maritime 8. Licensed Operators in the Aviation industries 9. Licensed Operators in the Export Processing and Free Trade Zones: and 10. Any other agency or operator that may be prescribed from time to time by the Central Bank or as otherwise stated by Acts of National Assembly. For the avoidance of doubt, where receipts are generated in Naira, payments for such services and charges shall be made in Naira, conversely, where receipts are generated in foreign currency, payment for such services and applica - ble charges shall be made in foreign currency. REMITTANCE FOR SERVICES RENDERED IN NIGERIA TO ANY NIGERIAN RESIDENT

MEMORANDUM 14 Page 40 | Foreign Exchange Manual 4th EditionPage 40 | Foreign Exchange Manual 4th Edition Authorised Dealer Banks are required to determine applications from individuals, organisations or residents in Nigeria who ``` want to make cash gifts not exceeding $1,000.00 (one thousand US dollars) or its equivalent in other currencies to charitable ``` ``` organisations and $500.00 (five hundred US dollars) or its equivalent in other currencies to individuals during any calendar ``` year. Such transactions should be determined subject to the following: i. Completed Form “A”; ii. Documentary evidence of the need and purpose of the gift, e.g. appeal or a letter of request for aid or donation; A cash gift allowance is not transferable from one resident to another for the purpose of obtaining a tax exemption or re- bate. CASH GIFTS

MEMORANDUM 15 Page 41 | Foreign Exchange Manual 4th Edition An entity that permanently resides outside Nigeria is eligible to open an external account or a non-resident account with any ADB in Nigeria. 1. External Account: - A Foreign Currency Account with a bank in Nigeria whose source of funding is external and operated in the name of a non-resident and designated by the Central Bank of Nigeria as an External Account. 1.1. Eligibility The following are qualified to open and operate external accounts in Nigeria: ``` a) Embassies; ``` ``` b) High Commissions; ``` ``` c) Legations/Consulates; ``` ``` d) Career and established members of the ``` ``` above entities; ``` ``` e) Other International Organisations rec- ``` ognised and accorded diplomatic status and their expatriate officials – e.g. African Union, United Nations, Commonwealth of Nations, etc. For the avoidance of doubt, persons employed in organisations listed in 1.1 above who do not enjoy diplomatic status and/or are not career or estab- lished members of staff do not qualify to operate external accounts. 2. Non-Resident Account: A Naira account held by individuals or entities not resid- ing in Nigeria. 2.1. Eligibility The following are eligible to open non-resident ``` accounts: ``` ``` a) Overseas Correspondence and examination ``` ``` bodies; ``` ``` b) Foreign Companies executing approved ``` ``` contracts in Nigeria; ``` ``` c) Foreign professional bodies. ``` ``` d) Digital platforms and Technology Services ``` Providers. For entities not classified under a-d above, reference should be made to the CBN for clarification. 3. Documentation Requirements 3.1. External Accounts ``` a) Applicant’s letter of request, showing offi- ``` cial position/status and the probable dura- ``` tion of stay in Nigeria; ``` ``` b) Letter of introduction from the relevant ``` Diplomatic Mission/International Organisa- tion certifying the accredited status of the ``` applicant; ``` ``` c) International passport biodata page of ``` signatories. 3.2. Non-Resident Accounts ``` a) Overseas Correspondence and Examination ``` Bodies i. Letter of request from applicant; ii. Memorandum and Articles of Asso- ``` ciation of the Overseas company; ``` iii. Letter of accreditation from the ``` Federal Ministry of Education; ``` iv. Power of attorney to their Agent in Nigeria. ``` b) Foreign Companies Executing Approved ``` Contracts in Nigeria. i. Contract document; ``` ii Letter of request from applicant; ``` iii Memorandum and Articles of Asso- ciation of the company. ``` c) Foreign Professional Bodies ``` ``` In addition to documents specified in 2.2(a) ``` above, a letter of certification from a rele- vant regulatory body in Nigeria shall be required. 4. Conduct of External and Non-resident Accounts 4.1 External Accounts - Credits ``` a) Payments by residents of Nigeria in respect ``` of which the appropriate approved foreign ``` exchange is held; ``` ``` b) Payments from other external accounts; ``` ``` c) Proceeds of the sale of foreign currency ``` imported into the country, subject to the following conditions:- ``` i) Foreign currency imported shall be ``` converted to Naira at the prevail- A. Non-resident Accounts for Foreign Entities Operating In Nigeria NON-RESIDENT AND EXTERNAL ACCOUNTS

MEMORANDUM 16 Page 42 | Foreign Exchange Manual 4th Edition

MEMORANDUM 16 - NON-RESIDENT AND EXTERNAL ACCOUNTS ``` ing Foreign Exchange Market rate; ``` ``` ii) Repurchases shall be executed at ``` the prevailing Foreign Exchange Market rate. 4.2 External Accounts - Debits ``` a) Payments to residents of Nigeria; ``` ``` b) Payments to other External Accounts; ``` ``` c) The cost of purchases of foreign currency. ``` ``` Note: ``` External Account holders can also operate domicili- ary accounts. 4.3 Non-Resident Accounts ``` a) Non-Resident Accounts may be credited ``` with proceeds from services rendered locally and may be debited with payment ``` for services rendered locally; ``` ``` b) Payments into non-resident accounts for ``` foreign companies executing approved contracts in Nigeria shall not exceed the Naira portion indicated in the contract. 4.4 All Non-Resident and External Accounts operat- ed under the provisions of this memorandum shall, on completion of the contract or the applicant’s business in Nigeria, be closed and the balance on the account, if any, transferred abroad after docu- mentation. ``` (B) NON-RESIDENT ACCOUNT FOR NIGERIANS RESIDING ``` IN THE DIASPORA 1. Non-Resident Nigerian Ordinary Account (NRNOA): ``` This account enables Non-Resident Nigerians (NRNs) ``` to remit their foreign earnings to Nigeria and manage funds in both foreign and local currencies. 1.1 Currency held in freely convertible foreign curren- cies as specified by CBN. Account holders may also ``` maintain a Naira (NGN) account, with funds remitted ``` directly from offshore or convertible from a FCY account at prevailing exchange rates through Au- thorised dealers. 1.2 Purpose: depositing foreign income by individuals ``` residing outside Nigeria (e.g., salaries, business ``` ``` proceeds). ``` 1.3. Repatriation: Fully repatriable without restrictions. 1.4 Interest Rates: Interest rates on balances are nego- tiable with the preferred bank. 1.5 Conversion Flexibility: Funds can be freely con- verted into Naira at prevailing exchange rates through Authorised Dealers. 1.6 Regulatory Compliance: Aligns with International AML/CTF standards to ensure transparent fund flows and mitigate risks. 2. Non-Resident Nigerian Investment Account (NRNIA): ``` This account enables Non–Resident Nigerians (NRNs) to ``` ``` invest in assets in either Foreign Currency (FCY) or local ``` ``` Currency (Naira). Account holders may maintain both a ``` ``` foreign currency (FCY) account and/or a local currency ``` ``` (Naira) account to facilitate diverse investment opportu- ``` nities. 2.1. Currency: Held in freely convertible foreign curren- cies as specified by the Central Bank of Nigeria ``` (CBN). Account balances will be held in major ``` foreign currencies without the need for mandatory conversion to Naira. 2.2 Purpose: To facilitate investments in Nigerian assets, such as real estate, stocks, and government securi- ties. 2.3 Tax and Fiscal Policy: All investments are subject to applicable taxes under Nigerian laws. Specific ex- emptions, such as those for government bonds. 2.4 Interest Rates: Interest rates on deposits are nego- tiable with the preferred bank. 2.5 Repatriation of Funds: FCY balances held in the NR- NIA account, including investment principal and profits, can be fully repatriated without restrictions, ensuring ease of capital. 2.6 Flexibility for Dual Investments: Allows account B. Non-resident Account for Nigerians Residing in the Diaspora Page 43 | Foreign Exchange Manual 4th Edition holders to seamlessly invest in either local or foreign currency-denominated assets, promoting greater investment diversification. 2.7 Regulatory Compliance: Aligns with global AML/CTF standards to ensure transparent and secure investment trans- actions. 3. Eligibility for both NRNOA & NRNIA ``` Any Nigerian citizen residing outside Nigeria, with documented proof of residence (e.g., work permit, student visa, or ``` ``` proof of address), is eligible to open an NRNOA & NRNIA, and the documentation below shall apply. ``` 3.1 Individuals must present the following: ``` a) Valid Nigerian passport ``` ``` b) Proof of non-resident status (e.g., visa, work permit) ``` ``` c) Bank Verification Number (NRBVN) and or Tax Identification Number (TIN) ```

MEMORANDUM 16 - NON-RESIDENT AND EXTERNAL ACCOUNTS Page 44 | Foreign Exchange Manual 4th Edition Applications shall be determined based on the following documentation. Family Maintenance Allowance/ Annual Leave Pay/ Bonus and Gratuity Authorised Dealer Banks may approve applications made by residents to remit 100%, subject to the following documenta- tion requirements:- i. Form A; ii. Evidence of tax paid on the income to be remitted; iii. International Passport biodata page and immigra- ``` tion entry/exit stamp; ``` iv. Valid Resident Permit; v. Evidence of the operation of an account with the ``` bank and payment of salaries into the account; ``` vi. A letter from the applicant’s employer confirming payment shall apply, for the purpose of bonus and gratuity. Remittances by residents for the maintenance of depen- dents on their own accounts or for any purpose whatsoever are allowed up to 100% of their net income while physically resident in Nigeria. PHR is restricted to net income credited to the bank account. Actual transfer may be made once a month on the basis of the remuneration received for the previous month. However, where remittances have fallen into arrears, the Authorised- Dealer Banks can determine the applications based on the documents listed above. The family maintenance allowance may be continued only while the applicant is resident in Nigeria and is receiving a salary. This shall cease immediately upon the applicant’s departure from Nigeria. Authorised Dealer Banks shall note that the leave pay al- lowance granted under this memorandum is inclusive of the travel allowance approved for the related leave period. Applicants’ International passports shall be endorsed by the Authorised Dealer Banks to reflect the grant of leave pay re - mittance for each year. Where there is evidence of accumu- lated leave, the leave pay remittance shall be proportionate ``` to the period(s) of accumulation, and the international pass- ``` ``` port shall be endorsed to indicate the period(s) accordingly. ``` Pension/Provident Fund Payments. Authorised Dealer Banks may approve applications made by foreign nationals to remit Provident Fund Payments, provided documentary evidence of the amount due is produced, and income tax has been paid, or that the monies are exempted from taxation. Such remittances form part of the repatriable 100% of net income. Retirement benefits of foreign nationals who contributed to the pension scheme shall continue to be eligible for remit- tance, subject to the following documentation requirements: i. Completed Form ‘A’ ii. Resident permit and/or expatriate quota iii. Retirement savings account statement iv. Pension Fund Administrators (PFA) approval. Company’s Share of Provident/Pension Fund Liabilities Due to Expatriate Staff Such applications shall be determined by Authorised Deal- er Banks, subject to the following documentation require- ``` ments:- ``` ``` i) Approved rules of the pension scheme; ``` ``` ii) Schedule of contribution (where applicable); ``` ``` iii) Joint Tax Board approval of the scheme/appraisal of ``` the scheme by the National Social Insurance Trust ``` Fund (NSITF) in the case of the Provident Fund; ``` ``` iv) Resident permit of an individual contributor. ``` Final Balance/Terminal Pay: All applications for remittance of terminal pay and proceeds from sales of assets shall be determined by the Authorised- Dealer Banks, subject to the following documents: i. Copy of Resident Permit; ii. Copy of relevant pages of the applicant’s ``` International Passport; ``` iii. Letter from the employer clearly stating the appli- ``` cant’s final exit from the country, where applicable; ``` iv. Notarised applicant’s statement of assets in Nigeria; v. Receipts of sale of personal effects (if any); vi. Employer’s confirmation of payment of fringe bene- ``` fits (if any). ``` 1. Family Maintenance Allowance/ An- nual Leave Pay/ Bonus and Gratuity 3. Company’s Share of Provident/Pen- sion Fund Liabilities Due to Expatri- ate Staff 2. Pension/Provident Fund Payments 4. Final Balance/Terminal Pay ``` PERSONAL HOME REMITTANCES (PHR) ```

MEMORANDUM 17 Page 45 | Foreign Exchange Manual 4th Edition ``` An electronic Certificate of Capital Importation (e-CCI) MUST ``` be issued for all capital transfers into Nigeria, within 24 hours of the conversion of funds into Naira by an Authorised Dealer Bank. PURCHASE AND SALE OF SECURITIES 1. Purchase of Securities i. Investors are permitted to invest in Nigeria, provid- ed that investment funds are remitted through an Authorised Dealer Bank and a eCCI be issued. ii. Export proceeds and ordinary domiciliary account balances are not permitted for investment purposes. 2. eCCI Issuance for Global Depository Receipts (GDRs) i. For GDR inflows, a master eCCI shall be issued to the Depository Bank for the total foreign currency received. ii. Where GDRs are cancelled offshore, the Depository Bank shall notify the custodian/subcustodian with underlisted documentation. iii. The nominee custodian shall maintain a valid eCCI for shares withdrawn from the GDR and “mark down” the quantity from the master eCCI. iv. With the valid eCCI, a non-resident investor may trade the underlying shares locally and is entitled to repatriate proceeds. v. Repatriation of proceeds shall be through ADBs ``` with: ``` a. Completed Form A and eCCI; b. Evidence of conversion from GDR to shares ``` confirmed by Depository/Custodian; ``` c. Proof of GDR cancellation; d. Investor’s written request; e. Contract Note/evidence of sale of shares. 3. Securities Denominated in Naira but Payable in For- eign Currency Residents may buy securities from non-residents subject to: i. Broker’s quotation or Purchase Contract Note; ii. Certified evidence of offer for sale and ``` executed sales agreement; ``` iii. Company prospectus or current annual report. ``` Note: ``` i. ADBs must apply KYC. ii. Funds sourced from the NFEM cannot be used to purchase foreign currency securities or to establish subsidiaries or any other entities. FOREIGN PORTFOLIO AND DIRECT INVESTMENT Required documentation for FPI inflows: a. SWIFT message evidencing remittance indicating ``` the purpose of capital importation; ``` b. Customer instruction c. Evidence of Naira investment ``` Guidelines: ``` a. Investors may discount money market instruments in the secondary market. b. Where a local investor buys from a foreign investor, the foreign investor’s eCCI is cancelled after repatri- ``` ation; the local investor thereafter receives interest ``` and principal in Naira. c. Where the instrument is acquired by another foreign investor, the seller’s eCCI is amended with details of the new buyer, ensuring repatriation of both interest and principal at maturity. FDI documentation requirements: ``` (i) Cash inflows: ``` a. SWIFT/telex message; b. Board resolution of beneficiary authorising ``` investment; ``` c. Purpose/Type of capital importation (equity, ``` loan, etc.); ``` d. Incorporation documents of the beneficiary. ``` Note: Items a, b and c above does not apply to individu- ``` als. ``` (ii) Plant, Machinery & Equipment: ``` ``` In addition to documentation listed above; Bill of ``` ``` Lading; Certificate of Origin; Commercial Invoice; ``` ``` Exit Note; Form M; Packing List; SGD; Product Cer- ``` ``` tificate; Import Duty Receipt; PAAR. ``` ``` (iii) Debt Conversion Programme: ``` i. Written confirmation from DMO before repatriation of capital, profit, interest or ``` dividends; ``` ii. Evidence of payment of the mandatory 2.5% transaction cost to CBN. A. Purchase and Sale of Securities B. Foreign Portfolio Investment (FPI) C. Foreign Direct Investment (FDI) CAPITAL TRANSFERS, SECURITIES & FOREIGN LOANS

MEMORANDUM 18 Page 46 | Foreign Exchange Manual 4th Edition ``` (iv) Divestment (FPI or FDI) ``` i. At divestment, the investor submits: a. Completed Form A and eCCI; b. Evidence of investment and/or redemption. c. Evidence of registration with NIPC for FDI. FOREIGN LOANS, INCLUDING SUPPLIERS’ CREDIT 1. Procurement of Foreign Loans Requests for foreign loans by companies must be pro- cessed through ADBs, which are required to issue an eCCI. 1.1 Cash Documentation: a. Board Resolution of the beneficiary; b. Loan Agreement including terms, morato- rium, maturity, interest rate, repayment ``` schedule with dates; ``` c. Executed offer & Acceptance Letter; d. SWIFT/Telex; e. Certificate of incorporation of the benefi- ciary. 1.2 Plant, Machinery & Equipment Documentation: ``` In addition to documentation listed above; ``` ``` a–e. Bill of Lading; Certificate of Origin; Commercial ``` ``` Invoice; Exit Note; Form M; Packing List; SGD num- ``` ``` ber; Product Certificate; Import Duty Receipt; PAAR. ``` 2. Repayment of Foreign Loans 2.1 Cash Completed Form A, Demand note/invoice and eCCI in addition to the documents listed in 1.1 above. 2.2 Plant, Machinery & Equipment Documents listed in 1.2 and 2.1 above. ``` CORPORATE ACTIONS (Capitalisation / Rights Issue / Rein- ``` ``` vestment / GDR) ``` ``` Requirements: ``` a. Board Resolution; b. Payment of stamp duty; c. SEC approval. ``` CAPITAL OUTFLOWS & OUTWARD TRANSFERS (DIVI- ``` ``` DENDS, PROFITS & DIVESTMENTS) ``` 1. Capital Transfer after Divestment Required documentation: i. Completed Form A and eCCI; ii. Executed Sales Agreement / transfer of investment. For unlisted companies, a valuation report from a ``` an audit firm recognised by law.; for listed compa- ``` nies, evidence of a sale compliant with SEC/Ex- change rules. iii. Board Resolution authorising sale; iv. SEC clearance letter (where applicable); v. Valuation report for unlisted companies. 2. Dividend, Profit & Bonus Remittance i. Completed Form A and eCCI; ii. Audited accounts and evidence of CIT paid for the ``` relevant year; ``` iii. Board/AGM resolution authorising payment; iv. Dividend warrants and evidence of WHT paid where applicable.

MEMORANDUM 18 - CAPITAL TRANSFERS, SECURITIES & FOREIGN LOANS D. Foreign loans, including Suppliers’ Credit E. Corporate Actions (Capitalisation / ``` Rights Issue / Reinvestment / GDR) ``` F. Capital Outflows & Outward Trans- ``` fers (Dividends, profits & Divest- ``` mentsP Page 47 | Foreign Exchange Manual 4th Edition 1. Remittance in respect of educational expenses of Ni- gerian students attending Universities and Polytechnics overseas shall be granted by the Authorised Dealer Banks. Nursery, Primary, Secondary, Foundation and A-level are not eligible for foreign exchange. 2. Approval for Undergraduate Studies (Fresh and Re- ``` turning Students) and Postgraduate Studies is subject ``` to the submission of completed Form ‘A’ and the docu- mentation requirements listed below: - i. Evidence of admission/course programme; ii. Tuition fees for the period; iii. International Passport biodata page of the student iv. Student ID Card for returning students v. First degree certificate (or its equivalent)/Certified True Copy of Statement of Result by the awarding ``` institution (for Postgraduate students only) ``` ``` Note: ``` Payment of tuition fees for undergraduate/postgrad- uate studies shall be subject to a maximum limit of USD25,000.00 per semester 3. Maintenance Allowance: Payments of maintenance allowance shall be subject to the following provisions. ``` i) When tuition and maintenance services are billed ``` together, remittance shall be made only to the educational institution. Such beneficiary shall no longer be eligible for living allowance. However, where the student is living off-campus or the main- tenance fee is stated separately, the maintenance fee shall be paid to the student and capped at $5,000.00 per quarter, while the tuition fee shall be paid directly to the school. ``` ii) Applications for educational expenses by foreign ``` nationals shall be treated as part of their remittable entitlement in accordance with the provisions of

Memorandum 17, in respect of PHR. This is in addition to the documentation requirements ``` listed in 2 (i-v) above. ``` EDUCATION OUTSIDE NIGERIA

MEMORANDUM 19 Page 48 | Foreign Exchange Manual 4th Edition Eligibility ``` i) All Authorised Dealer Banks are eligible to open domicil- ``` iary accounts for their customers. ``` ii) Domiciliary accounts may be opened by: ``` ``` a) Citizens of Nigeria; ``` ``` b) Foreign nationals ``` ``` c) Foreign/indigenous companies; ``` ``` d) Embassies, High Commissions, Diplomatic ``` Missions, and other similar entities operat- ing in Nigeria, including their staff. ``` e) External Account holders can also operate ``` domiciliary accounts. Mode of Operation ``` a) Domiciliary Accounts may be operated as current, ``` ``` deposit or savings accounts; ``` ``` b) Domiciliary Accounts may be opened, maintained ``` and operated in any foreign currency specified in memorandum 3 in respect to specified currencies in this Manual. ``` c) A customer may open more than one Domiciliary ``` Account, denominated in the same or different foreign currencies, and at the same or different banks. ``` d) Any person making an application to open a foreign ``` currency Domiciliary Account or who wishes to deposit any foreign currency therein shall not be required or obliged to disclose the source of funds to be deposited in such account. ``` e) Management, operations and withdrawals from domicili- ``` ary accounts must comply with extant money laundering, including AML/CFT, CPF and other regulations guiding FX. Designation of Account Authorised Dealer Banks shall maintain for their customers ``` the following types of domiciliary accounts; ``` a. Ordinary b. Export proceeds c. External d. Non-resident. ``` Withdrawals: ``` ``` a) Withdrawals or payments from domiciliary accounts ``` shall be made in any of the following ways: ``` i) Foreign banknotes; ``` ``` ii) Mail/Telegraphic transfer; ``` ``` iii) Bank draft. ``` ``` b) Ordinary Domiciliary Account holders shall have ``` unfettered and unrestricted access to funds in their accounts. Domiciliary account holders are permitted to utilise cash deposits not exceeding USD10,000 per day or its equivalent via telegraphic transfer. Au- thorised Dealer Banks shall provide returns to the CBN, including the “purpose” for such transactions. ``` (c) Holders of export proceeds Domiciliary Accounts ``` shall have unfettered access to funds in their ac- counts for use in eligible transactions, subject to submission of documentation relating to the specific ``` transaction (no cash withdrawals shall be allowed). ``` Unfettered access to export proceeds shall be in compliance with extant AML/CFT regulations. Where funds are to be transferred to third parties, the ac- count holder must provide the purpose for the transfer. Authorised Dealer Banks shall ensure that the transaction purpose is duly captured in accordance with the foreign exchange sectoral utilisation code as specified in the Foreign ``` Exchange Management Systems (FEMS) Code Book. ``` Note i. Completion of Form A is mandatory for all FX sourced from NFEM. ii. Transfer of funds from an export proceeds domicili ary account in a bank to an Ordinary Domiciliary Ac- count in another bank to fund eligible transactions shall be allowed. iii. Export proceeds can be sold to any Authorised Dealer bank in NFEM. iv. International companies in the Extractive Industry with an exception to indigenous companies are allowed to repatriate 100% of their export proceeds through Authorised Dealer Banks, who shall ensure adequate documentation and submit a monthly report to the Director, Trade & Exchange Department 1. Eligibility 4. Withdrawals 2. Mode of Operation 3. Designation of Account DOMICILIARY ACCOUNTS

MEMORANDUM 20 Page 49 | Foreign Exchange Manual 4th Edition ``` (d) Holders of Ordinary Domiciliary accounts shall continue to have access to funds in their accounts for eligible ``` transactions. It should be noted that the use of Form A for remittance using an Ordinary Domiciliary Account is not mandatory. However, the Authorised Dealer Bank shall ensure that the purpose of the transaction is duly captured in accordance with the foreign exchange sectoral utilisation code as specified in the FEMS Code Book.

MEMORANDUM 20 - DOMICILIARY ACCOUNTS Page 50 | Foreign Exchange Manual 4th Edition Except in instances where such has been expressly permitted by law or statute, the use of foreign currency for the pay- ment of goods and services in Nigeria is prohibited. 1. Notwithstanding the provisions of Memoranda 16 and 17 of this Manual, only “Nigerian residents” shall access funds from the Foreign Exchange Market. 2. Transactions of Operators in the Free Trade Zones (not ``` being part of the Nigeria Customs Territory) shall not ``` qualify for remittance with funds from the Foreign Ex- change Market. 3. All agreements for services rendered by non-residents that reflect activities not covered in this Manual shall be referred to the CBN for consideration before remittance, through the Director, Trade & Exchange Department. 4. It shall be the responsibility of Authorised Dealer Banks to ensure that documentation on transactions and third-party documents is authenticated by the issuer be- fore utilisation for foreign exchange remittance, includ- ing documents forwarded to the Central Bank of Nigeria for approval-in-principle. Authorised Dealer Banks are to ensure that third-party documents are authenticated ``` by the issuer/stakeholder(s) before utilisation for for- ``` eign exchange remittance or forwarding to the Central Bank of Nigeria for approval-in-principle. Accordingly, appropriate sanctions shall continue to be imposed on Authorised Dealer Banks who: i. Release funds on the basis of forged documents; ii. Engage in fraudulent transactions; iii. Fail to transfer customs revenue to the CBN in ``` accordance with the laid down procedures; ``` iv. Default in furnishing accurate returns on due dates; v. Fail to report defaulting customers to the CBN for appropriate action, etc. 5. Authorised Dealers shall be free to deal in funds in the Foreign Exchange Market in their own right, subject to compliance with the advised Net Open Position. How- ever, no bank shall purchase funds from any segment of the Foreign Exchange Market on behalf of a customer, or sell funds to any customer, without a valid, duly docu- mented underlying transaction. 6. Authorised Dealer Banks shall render returns as required by the CBN. 7. Authorised Dealer Banks shall carry out due diligence/ KYC on all customers and counter-parties. 8. Sanctions shall be imposed on Authorised Dealer Banks/ ``` official(s) and bank customers who breach any of the for - ``` eign exchange regulations and guidelines in this Manual and any other regulations and/or provisions of relevant Acts relating to the Nigerian Foreign Exchange Market. 9. All Authorised Dealer Banks/Buyers and the general public are required to refer policy issues in respect of foreign Trade & Exchange, of which they are in doubt, to the Director, Trade & Exchange Department of the Central Bank of Nigeria, for clarification. 10. All import and export transactions shall be covered with ``` completed Forms (‘M’, ‘A’, NXP, NCX) regardless of ``` whether or not payment is involved. 11. Authorised Dealer Banks, Pre-shipment Inspection Agents, Importers, Exporters, Suppliers, Shipping Lines, Bureaux de Change and Air Carriers are expected to ensure compliance with the provisions of Memorandum 9 and 10, as any infraction shall attract appropriate sanc- ``` tion(s) in line with the provisions of the relevant guide- ``` lines, regulations and/or statutes. 12. Authorised Dealer Banks are allowed to lend funds in domiciliary accounts only to their customers with foreign currency receivables. 13. Transactions with shipping documents predating Form ``` M and Letter of Credit (LC) approval date are liable to ``` sanction in line with the provisions of BOFIA, as well as other appropriate sanctions by CBN. 14. Unutilised foreign exchange is to be returned to the Foreign Exchange Market within 72 hours from the value date at the prevailing market rate. 15. Authorised Dealer Banks are to note that only transac- tions for which Letters of Credit are cash-backed, or with matured Clean Lines or matured Bills for Collection are eligible for delivery of foreign exchange purchased in the Foreign Exchange Market. “Front Loading” pur- chase of foreign exchange and the delivery of foreign exchange for obligations that are not due for payment shall not be permitted. MISCELLANEOUS PROVISIONS

MEMORANDUM 21 Page 51 | Foreign Exchange Manual 4th Edition ``` Note: Credit cards are considered loans and should only ``` be issued to customers with verifiable FX inflows. Approval and processing of trade transactions shall be guided by the documentation requirements outlined in this Manual. 1. Visible Imports (Except Imports under Absolute Prohibi- ``` tion). ``` 2. Invisible Trade ``` by individuals and organisations; ``` xvi. Judgement debt; xvii. .Copyright, patent and royalties; xviii. Advertisement outside Nigeria; xix. Remittance of capital, profits and dividends; xx. Airline remittances; xxi. Foreign borrowing and external loan repayments; xxii. Dealings in securities; xxiii. Pilgrims services; xxiv. Demurrage; xxv. Mortgage repayments; xxvi. Single copies of books for personal use; xxvii. Subscription to periodicals; xxviii. Correspondence Courses; xxix. Freight of Personal Effects for Returning Students; xxx. Profits and dividends; xxxi. Aerial Survey Photographs; xxxii. Investment in securities denominated in foreign curren- ``` cy; ``` xxxiii. Digital Platforms and Technology Services; xxxiv. Transit Fees (Export); xxxv. Authorised Dealers are required to forward transac- tions not listed in this Manual, which are neither pro- hibited by law nor suspended by current regulations, to the Director, Trade & Exchange Department, Central Bank of Nigeria, for determination of the transactions’ eligibility and documentation requirements. i. Payment for imports, including deferred pay- ``` ments, down-payments and instalment payments; ``` ii. Commission and brokerages for insurance pay- ``` ments; ``` iii. Commercial and Non-commercial export transac- ``` tions; ``` iv. Domiciliary account transactions; v. Non-resident and external accounts; vi. Charter/lease, maintenance and repair fees and outright purchase of Aircraft/shipping, fishing and ``` dredging vessels/equipment; ``` vii. Insurance (personal) and reinsurance; viii. Conferences, seminars and training; ix. Expatriate home remittances (family maintenance, leave pay, provident fund payments, bonus, gratu- ``` ity and final balance); ``` x. Cash gifts; xi. Loans, Advances and guarantees, including issu- ``` ance of performance bonds; ``` xii. Personal and business travel allowances; Educa- ``` tion expenses - tuition and maintenance; ``` xiii. Contract services, management services, technical services, consultancy, professional and legal fees, ``` etc; ``` xiv. Directors’ fees; xv. Membership subscriptions and examination fees ELIGIBLE TRANSACTIONS

APPENDIX I Page 52 | Foreign Exchange Manual 4th Edition A. The following extract from Sections 29 to 31 of the ``` Foreign Exchange (Monitoring and Miscellaneous ``` ``` Provisions) Act of 1995 provides for offences and sanc- ``` ``` tions: ``` B. SANCTIONS FOR CONTRAVENING REGULATIONS IN THE NIGERIAN FOREIGN EXCHANGE MARKET ``` (NFEM) ``` 2. A person convicted of any of these offences is liable:- a. In the case of an individual, imprisonment for a term not exceeding two years. b. In the case of a body corporate, to a fine of ten times the amount of foreign currency involved. 3. In addition to the penalty imposed as indicated ``` above:- ``` a. The foreign currency involved shall be forfeited to the Federal Government. b. Where an offence is committed by a body corpo- rate, the court or tribunal may order that the body corporate shall thereupon and without any further assurance, but for the order, be wound up and all the assets and properties of the body corporate shall be forfeited to the Federal Government. c. Where an offence is committed by an Authorised Dealer, the court or tribunal may, in addition to the ``` penalty prescribed in paragraph (b) of this subsec- ``` tion, recommend that the license of the Authorised Dealer be revoked. 1. Any person who:- Forges or produces as genuine to the Central Bank or the Market any false document with a view to utilising the document in any transaction in the market, is guilty of an offence under this Manual. 2. Any person convicted of any of these offences is ``` liable:- ``` a. In the case of an individual, to imprisonment for a term of five years or to a fine of five times ``` the amount of foreign currency involved; and ``` b. In the case of a body corporate, to a fine of ten times the amount of the foreign currency in- volved. 3. All the assets, movable or immovable, of a person convicted of an offence shall be forfeited to the Federal Government. 4. Where the person convicted is an Authorised Dealer, the Central Bank shall revoke its appoint- ment as an Authorised Dealer. 5. In addition to any other penalty imposed under this section, the foreign currency involved shall be forfeited to the Federal Government. 1. Any person:- a. Being an Authorised Dealer, permits or in any way facilitates the withdrawals or deposit of foreign currency contrary to the memorandum ``` of this Manual; or ``` b. Making or accepting cash payments contrary to ``` the Act is guilty of an offence under this Act; ``` Part I: Offences and sanctions with respect to transac - tions in the Foreign Exchange Market. Authorised Dealers are notified of the following contraven - tions in the NFEM and sanctions thereto: Authorised Dealer Banks are required to forward via ``` the Financial Institution Forex Reporting System (FIFX) ``` the following returns to the CBN: a. Daily Returns on or before 10:00am for the pre- ceding day’s transactions. b. Monthly Returns: Within five (5) working days after the end of the month. Where the month-end falls on a weekend or public holiday, the last working day shall apply. Contravention 1: Default in Rendition of Returns i. Late Rendition of Returns/Non-RenditionPart II: With respect to the operation of Domiciliary ``` Accounts:- ``` OFFENCES AND SANCTIONS APPENDIX II Page 53 | Foreign Exchange Manual 4th Edition ``` Note: ``` ``` Returns not sent to the Bank as prescribed in 3(i) a ``` & b above are considered late rendition and shall attract sanctions. Sanctions for late/non-rendition of returns Where the importer fails to submit the exchange control documents within the stipulated period or documenta- tion is inadequate or falsified, the Authorised Dealer Bank shall submit a report electronically to the Director, Trade & Exchange Department, Central Bank of Nigeria, giving full details of the default. Defaulting importers, as well as Authorised Dealer Banks which fail to report any default, shall be liable to penalties. ``` Sanctions: ``` Any importer that fails to submit an Exchange Control a. Letter of warning to the bank; b. The bank shall be sanctioned ₦10 million per transac- ``` tion; ``` c. Refer to Sub–Committee on Ethics of the Bankers’ Committee for notification. ``` Sanction: Monetary fines, suspension of ``` Authorised Dealership licence for a minimum ``` of six (6) months or revocation of the license, ``` depending on the severity of the offence a. Late Rendition A Penalty of Five Hundred Thousand Naira ``` (₦500,000) for the day such contravention is estab- ``` lished. b. Non-Rendition A Penalty of a minimum of Five Million Naira only ``` (₦5,000,000.00) shall be imposed for non-rendi- ``` tion of returns, and Five Hundred Thousand Naira ``` (₦500,000) for each day during which the contra- ``` vention continues ``` Document (ECD) within the stipulated timeline (90 days ``` from negotiation of shipping documents with the overseas ``` correspondent bank) shall be restricted from all valid and ``` non-valid foreign exchange transactions, including process- ing of Form M for further transactions, until compliance is achieved. The importer shall be identified by the TIN or RC number. ``` a) First offender that exceeds the timeline shall be ``` ``` restricted for 90 days; ``` ``` b) Second offender that exceeds the timeline shall be ``` ``` restricted for 180 days; ``` ``` c) Third offender that exceeds the timeline shall be ``` ``` restricted for 360 days; ``` ``` d) Fourth offender that exceeds the timeline shall be ``` banned. Contravention 4: Exceeding the Approved Limit of the ``` Net Open Position (NOP) ``` For NOP compliance, banks must ensure they do not exceed their assigned position. Where the daily NOP is exceeded or false returns or returns not rendered occur, the CBN shall impose appropriate sanctions in line with the relevant sections of BOFIA, which may include suspension from the Foreign Exchange Market. ``` Sanctions: ``` ``` a) First offender that exceeds the NOP limits shall be ``` ``` given a letter of warning; ``` ``` b) Second offender shall be suspended from the For ``` ``` eign Exchange Market for ten (10) working days; ``` ``` c) Third offender shall be suspended for 90 days from ``` NFEM. Contravention 5: Consummating Foreign Exchange Transactions with inadequate documentation. ``` Sanctions: ``` Authorised Dealers shall pay ₦100.00 million in addition to ₦10 million per transaction Contravention 6: Export Transactions ``` A) Non-Oil Export ``` 1. Non-oil Exporters shall be aware that once goods have been inspected and a CCI issued, any variation i. Rendition of Inaccurate/Misleading Returns Contravention 2: Reallocation of funds without CBN’s approval ``` Sanctions: ``` Contravention 3: Failure to submit Exchange Control ``` Documents: ``` APPENDIX II - OFFENCES AND SANCTIONS Page 54 | Foreign Exchange Manual 4th Edition between the goods presented for loading and those confirmed by the CCI will render the exporter liable to penalties in accordance with the laws of the Fed- eral Republic of Nigeria. Non-compliance with the requirements or provisions of the Export Guidelines issued by FMF will attract the following sanctions: ``` (a) Non-repatriation of Export Proceeds within ``` 180 days by any Exporter shall attract a penalty of 1% of the Naira equivalent of the export proceeds that remain outstand- ing as at the time repatriation was due. The rate applied will be the prevailing rate as at the due date. ``` (b) Authorised Dealer Banks (ADBs) shall en- ``` sure that export proceeds are repatriated within 180 days, failing which a penalty of 0.5% shall apply to the bank on the out- standing value at the time the repatriation was due. ``` (c) Any violation of the Guidelines by banks, ``` including, but not limited to, the following: ``` i) Late approvals of NXP Forms re ``` ``` ceived from Exporters to PIAs; ``` ``` ii) Late/Non-remittance of NESS Fees ``` ``` paid by Exporters to CBN; ``` ``` iii) Late confirmation of NESS Fees ``` ``` receipts to PIAs and Exporters; ``` ``` iv) Late/Non-rendition of returns on ``` Export Proceeds shall attract ap- propriate sanctions by CBN. ``` (d) Any PIA that delays issuance of the CCIs ``` later than 72 hours after inspection and the receipt of all relevant documents, including NESS levy payment receipts, shall be liable to a fine of 25% of the service fee due to the PIA on the affected transaction. ``` (e) Any PIA that consistently fails for a period ``` ``` of three (3) months to submit a monthly ``` report on or before the 10th day of the sub- sequent month shall receive a query. Also, any PIA that fails to submit the same for ``` up to six (6) consecutive months within the ``` same year shall be deemed as non-per- forming and will have its contract termi- ``` nated; ``` ``` (f) Any PIA that consecutively fails ``` ``` for three (3) months to meet with the ``` scheduled time of inspection shall lose the ``` territory (State) to another PIA, and it shall ``` be re-assigned by the Ministry. ``` (f) If it is established that it is the fault of the ``` PIA that the export was done without NXP and proper issuance of CCI, the PIA shall be queried and warned. where the PIA per- ``` sistently defaults in like manner for six (6) ``` months, its contract shall be terminated. On the other hand, if it is established that the fault lies with the shipping line/ agent, it shall be reported to the Nigerian Shippers Council for appropriate sanction. ``` (g) Failure of any PIA to report attempts to ``` export substandard goods should immedi- ately result in a query, a warning and subse- quent suspension. ``` B) Oil Export ``` Non-compliance with the requirements or provisions of these Guidelines will attract the following sanc- ``` tions: ``` ``` a) No export permit shall be processed by the ``` NUPRC for any exporter that defaults in filling the Form NXP and or in the payment of NESS levy, as well as non-repatriation of export proceeds within the stipulated peri- od. ``` b) Non-payment of NESS Levy within thirty ``` ``` (30) days of the shipment date for oil and ``` gas exports shall attract a penalty of 25% of the outstanding NESS levy. ``` c) Any exporter that defaults in the repatri- ``` ation of export proceeds within 90 days shall be liable to a penalty of 1% of the outstanding export proceeds. ``` d) Authorised Dealer Banks (ADBs) shall en- ``` sure that export proceeds are repatriated within 90 days, failing which a penalty of APPENDIX II - OFFENCES AND SANCTIONS Page 55 | Foreign Exchange Manual 4th Edition 0.5% shall apply to the bank on the out- standing value at the time the repatriation was due. ``` e) Any violation of these Guidelines by banks, ``` including, but not limited to, the following: i. Late submission of NXP Forms ``` received from Exporters to PIAs; ``` ii. Late/Non-remittance of NESS Fees ``` paid by Exporters to CBN; ``` iii. Late submission of NESS Fee re- ``` ceipts to PIAs and Exporters; ``` iv. Late/non-rendition of returns on Export Proceeds shall attract a ppropriate sanctions by the CBN. ``` f) Any PIA that delays issuance of the CCIs ``` ``` later than five (5) working days after the ``` receipt of all relevant documents shall be liable for a fine of 25% of the service fee due to the PIA on the affected transaction. ``` g) Any PIA/MEA that consistently fails for a ``` ``` period of three (3) months to submit a ``` monthly report on or before the 5th day of the subsequent month for Oil shall receive a query from the Ministry. Also, any PIA/ MEA that fails to submit the same for up ``` to six (6) consecutive months within the ``` same year shall be deemed non-performing and its contract terminated. ``` h) Any PIA/MEA that consecutively fails for ``` ``` three (3) months to meet the scheduled ``` time of inspection shall lose the terminal, and it shall be re-assigned by the Ministry to another PIA/MEA. ``` i) If it is established that it is the fault of the ``` PIA that the export was done without NXP and proper issuance of CCI, the PIA shall be warned and queried. If the PIA per- ``` sistently defaults in like manner for six (6) ``` months, its contract shall be withdrawn. On the other hand, if it is established that the fault lies with the shipping line/ agent, it shall be reported to the Nigerian Shippers Council for appropriate sanction. ``` j) Failure of any PIA to report attempts to ``` export substandard goods should immedi- ately result in a query, a warning and subse- quent suspension. In addition to the provisions of contraven- tion 8 A & B above, Authorized Dealer Banks are required to note the following: 1. All carriers of goods should be aware that it is an of fence under the Enabling Law to carry goods from Nigeria without a CCI. 2. The Enabling Law of NESS makes it an offence to export goods not exempted from inspection without the issuance of a CCI. 3. Any person found guilty of an offence under the Act is liable on conviction: ``` a) In the case of an individual, to a fine of ``` a minimum of ₦5,000,000.00 or the value ``` of the goods (whichever is higher) or to ``` imprisonment for a term not more than 12 ``` months or both; ``` ``` b) In the case of a body corporate, to a fine ``` of a minimum of ₦10,000,000.00 or twice the value of the goods, whichever is higher. Part IV General Sanctions The above not withstanding by virtue of Section 50, 95 and 96 of BOFIA 2020, any person found contravening the provisions of this Manual shall incur additional penalty to be determined by the Governor.

APPENDIX II - OFFENCES AND SANCTIONS Page 56 | Foreign Exchange Manual 4th Edition 1. Visible Imports ``` i) Before registering Form “M” for an applicant, the ``` proforma invoice shall be scrutinised to identify the item to be imported and the FOB value, and other charges. ``` ii) The amount specified on Form “M” shall agree with ``` that in the Proforma invoice. ``` iii) Where the item to be imported is subject to desti- ``` nation inspection, the Form “M” shall have the pre- fix ‘BA’, and where the item does not require inspec- tion, the Form “M” shall have the prefix ‘CB’. ``` iv) In the case of a confirmed Letter of Credit, the cable ``` shall be tested and certified as valid, and payment may be made based on the tested cable. The full documentation as specified in Memorandum 9 shall be submitted to the Authorised Dealer Bank within the specified period. The amount specified on the accessed cable shall be verified and agreed with that on the attested invoice, bill for collection or letter of credit instrument, and the Form “M”. ``` v) Where there is sufficient ground for doubt regarding ``` the authenticity of the documents presented, ADBs shall verify with the issuing body before transferring foreign exchange to the overseas beneficiary. Any case of suspected forgery shall be reported prompt- ly to the Central Bank. 2. Invisible Transactions A. Monthly Home Remittances (including Leave Pay ``` and Bonus) ``` ``` i) Amount to be approved as monthly home ``` remittances shall not exceed 100% of the current monthly salary, net of tax. ``` ii) 100% of the bonus net of tax is allowed to ``` be remitted ``` iii) The signature on the tax clearance certifi- ``` cate and resident permit shall be verified against the relevant specimen signature list for all forms of home remittances. 3. Gratuity Procedure for Calculating Remittable Gratuity ``` i) The processing officer should check to ensure that ``` the application is properly documented. ``` ii) The applicant’s gross income for the period covered ``` by the gratuity shall be determined. ``` iii) The tax on the gross salary is deducted. ``` ``` iv) The remittable allotment shall be up to ``` 100% of income. ``` v) The amount remitted under PHR during the ``` period covered by the proposed gratuity is deducted from the remittable allotment in ``` (iv) above. ``` ``` vi) All other remittances, such as gratuities ``` previously granted, which are included in the statement of remittances, should be added to the aggregate net income. ``` vii) Bonus payments are not regarded as part ``` of the remittable income because they are ``` remitted 100% net of tax (see 3 (iii) above). ``` ``` viii) A positive net remittable allotment (i.e. ``` ``` after necessary deductions as in (v) and (vi) ``` ``` above) implies that the applicant did not ``` remit all that he was entitled to. As a result, approval can be granted for the full gratuity amount. However, a negative net allotment implies that the applicant had remitted more than he was entitled to during the period. As a result, the figure of the negative net allotment shall be de- ducted from the value of the gratuity, after which the balance can be approved. ``` ix) 15% of the gross income determined in 3(ii) ``` above should be calculated to determine the applicant’s gratuity entitlement. Gra- tuity allowed shall not exceed 15% of the applicant’s gross income during the period covered by the gratuity. 4. Final Balance Procedures for Calculation ``` i) The net income received in the last four years of ``` stay in Nigeria is computed by deducting tax liabili- ty during the corresponding period as reflected on the tax clearance certificate duly issued by the competent state Inland Revenue Department. The signature on the tax clearance certificate must be duly verified to ensure its validity. The income re- mittable is determined as up to 100% net of tax. ``` ii) The terminal payments (i.e. gratuity, leave pay and ``` ``` terminal salary) are then added to the remittable ``` income. PROCESSING GUIDELINES APPENDIX III Page 57 | Foreign Exchange Manual 4th Edition ``` iii) The difference between the remittable amounts ``` ``` (plus terminal payments) and total remittance made ``` during the period represents the total remittable balance. 5. Overseas Conferences/Training Courses: ``` i) Approval shall be granted for course fees as stated ``` in the course brochure and maintenance allowance in accordance with the applicant’s estimate. ``` ii) The maintenance allowance should be paid on a per ``` diem basis and approved by an officer not below the grade of Assistant General Manager. 6. Net Proceeds of Sales of International Air-Ticket The amount to be approved for remittance in respect of the sale of air-tickets is the total sales proceeds less local expenses incurred. The auditor’s report shall sup- port such a claim. Therefore, the auditor’s report and the Company’s statement of account shall be studied together to establish the actual amount remittable. Authorised Dealer Banks should certify that appro- priate tax is duly paid on the portion of international air-tickets sold in foreign exchange before remittance is approved. 7. Aircraft Lease and Maintenance Fees: ``` i) The lease/maintenance agreement should be ex- ``` amined to determine the amount payable as either a lease fee or a maintenance fee. This should be used as a reference point for comparing the amount to be remitted. ``` ii) Evidence of the use of aircraft shall be endorsed by ``` the Airport Authority. The signatures on this shall be verified against those on the relevant specimen signature list. ``` iii) The approval of the Nigerian Civil Aviation Au- ``` ``` thority (NCAA) should be examined to ascertain that ``` the aircraft for which the application is being made is covered in the airline’s operating license. The signatures on this document shall be verified against those in the relevant specimen signature list. The aircraft’s registration number should be stated in the relevant documents presented. ``` iv) A letter of confirmation from the NCAA regarding ``` the reasonableness and competitiveness of the charter/maintenance fees under the agreement should be requested. The signature on it should be duly verified. 8. Contract Service Fees ``` i) The service agreement shall be scrutinised to ascer- ``` tain the amount of the service fee payable in foreign exchange, and approval of the terms of the agree ment shall be sought from the relevant professional- body. ``` ii) The bill submitted by the organisation rendering ``` the service shall be scrutinised and compared with the amount of service fee specified in the service agreement. ``` iii) Where an attestation is required from a relevant ``` professional body in the related field, indicating that the services to be rendered cannot be provided locally, it shall be called for, scrutinised, and the signature on it confirmed with the issuing profes- sional body. ``` iv) It shall be certified that appropriate tax was paid on ``` the amount to be remitted as a service fee. The sig- nature on the tax clearance certificate shall be veri- fied against that on the specimen signature list. 9. Re-Insurance The signature of the Commissioner, National Insurance Commission or any of his officers authorised to issue the attestation letter shall be verified and should agree with that on the specimen signature list. 10. Demurrage Remittance Authorised Dealer Banks shall request the customer to provide evidence of the vessel’s arrival, issued by the ``` Nigeria Ports Authority (NPA), as well as pay-in-slips. ``` The total payment amount on the pay-in-slip should match the amount lodged into the account during the relevant period.

APPENDIX III - PROCESSING GUIDELINES Page 58 | Foreign Exchange Manual 4th Edition EXPORT GOODS EXEMPT FROM INSPECTION: Please refer to the Federal Ministry of Finance for guidiance.

APPENDIX IV Page 59 | Foreign Exchange Manual 4th Edition PROHIBITED EXPORTS: Please refer to the Federal Ministry of Finance for guidiance. CBN reserves the right to restrict access to the market for entities that contravene any of the regulations or refuse to oblige CBN’s request for information that would improve market intelligence.

APPENDIX V Page 60 | Foreign Exchange Manual 4th Edition # Central Bank of Nigeria