Frequently Asked Questions
|Are there any changes in the letter of credit (LC) opening process?|
Yes. Before an LC can be opened under the DI scheme, the original Form M must have been submitted to the Scanning company who must also accept or reject it within 24 hours. It is only after confirmation of acceptance that the LC can be opened. Thus, Lcs can no longer be opened with faxed documents.
|Can an individual walk into CBN and buy Foreign Currency?|
NO,the present policy does not allow individuals to walk into CBN and buy foreign currency.The CBN only sells Foreign currency to Banks and Bureaux de Change.
|How did Foreign Exchange Reserves Evolved?|
Reserves were formally held only in gold, as official gold reserves.But under the Bretton Woods system, the United States pegged the dollar to gold, and allowed convertibility of dollars to gold. This effectively made dollars appear as good as gold.The US government eventually abandoned the gold peg,making the dollar a reserve currency by fiat only.
|What are the main differences between destination inspection (DI) and the old preshipment inspection (PSI) schemes?|
1. Pre-shipment Inspection (PI):
(a) Place of inspection is at the Port
of loading in the Country of
(b) Exemption from inspection: A
general list of exempted goods was
provided by Federal Ministry of
Finance (FMF)/Central Bank of
2. Destination Inspection (DI):
(a) Place of inspection is at the Port
of discharge in Nigeria.
(b) Exemption from instection:
Exemption will be on a case-by-
case basis as approved by the
Minister of Finance.
|What is Reserves Management and Why is it Important?|
Reserves management is a processthat ensures that adequate official public sector foreign assets are readily available to and controlled by the authorities for meeting a defined range of objectives for a country. This means that a reserve management entity is normally made responsible for the management of reserves and associated risks. Reserves are held to support the following objectives:
1.Support and maintain confidence in the policies for monetary and exchange rate management including the capacity to intervene in support of national currency.
2.limit external vulnerability by maintaining foreign currency liquidity to absorb shocks during times of crisis or when access to borrowing is curtailed and in doing so;
3.provide a level of confidence to markets that a country can meet its external obligations;
4.demonstrate the backing of domestic currency by external assets;
5.assist the government in meeting its foreign exchange needs and external debts obligations; and
6.maintain a reserve for national disasters or emergencies.
Sound reserve management practices are important because they can increase a country's overall resilience to shocks.
|What is Scanning Companies under Destination Inspection Scheme?|
Scanning Companies are in charge of inspecting the goods imported into the country. The replaced the Pre-Shipment Inspection Agents (PIAs) under Pre-shipment Inspection Scheme (PIS). The companies are:
2. SGS; and
|What is the Manufacturer's Certificate of Production under Destination Inspection scheme and will a beneficiary who is a trader be required to submit this document?|
The Manufacturer Certificate of Production (MCP) is a document that states the standards to which the goods being imported were produced. Examples of standards are Nigeria Industrial Standards (NIS), British Standards, ISO,IES, DIN, PD etc.
|What is the Risk Assessment Report (RAR) under Destination Inspection scheme and what will it be used for?|
The Risk Assessment Report (RAR) is a document generated by the scanning company and it evaluates the level of risk associated with an import transction. Some of the factors that are considered before generating the RAR include:
(i) Antecedent of the importer
(ii) Antecedent of the exporter
(iii) Types of goods
(iv) Country of supply etc.
The RAR determines the level of intervention via inspection that will be required for the Nigeria Custom Services (NCS)
|When did this scheme commence?|
January 1, 2006
|Which document replaces the Clean Report of Inspection (CRI)?|
Importers are now to do self-assessment of import duty based on the RAR and then proceed to the Verification & Query Seat at the relevant Port for confirmation of correctness. Where the assessed duty is correct, an Assessment Notice is printed so that the importer can proceed to the bank to pay duties and taxes.
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