The Central Bank of Nigeria has announced the documentation requirements for divestments and repatriation of foreign investments related to the Certificate of Capital Importation.
This was disclosed in a circular the Acting Director of the Trade & Exchange Department, CBN, Dr. W.J. Kanya restating its commitment in ensuring compliance in foreign exchange operations, according to Nairametrics.
According to the circular, divestment and the repatriation of investments associated with CCI transactions are subject to the provisions of Memorandum 20, section 2(vi) of the Foreign Exchange Manual.
The CBN has demanded that two essential documents be included with each sale or repatriation of foreign investment, regardless of whether it includes pre-liquidation or matured investments, in order to guarantee complete compliance.
The two key documents:
1. Evidence of electronic Certificate of Capital Importation: This document is crucial for verifying that the initial capital importation was duly recorded and acknowledged.
2. Evidence of redemption of investment in local currency assets: This includes proof of redemption in money market instruments, debt securities, equities, or other relevant local currency assets
The circular read: “This is to clarify that the Foreign Exchange Manual, Memorandum 20 section 2 (vi) applies to both divestments and repatriation of all Certificate of Capital Importation (CCI) related transactions.
“For the avoidance of doubt, every divestment or repatriation of foreign investment be it a pre-liquidation or matured investment, should present the following documents:
“a) Evidence of electronic Certificate of Capital Importation. b) Evidence of redemption of investment in local currency assets (money market instrument, debt securities, equities, etc.).”
The circular underlined how crucial these records are to enabling seamless and legal foreign investment deals in Nigeria.
The CBN called on all parties involved in such transactions to adhere with these requirements to avoid any regulatory infractions.
International Oil Companies (IOCs) with operations in Nigeria were formerly prohibited by the top bank from sending 100% of their foreign exchange earnings to their parent company abroad.
The CBN’s Foreign Exchange Manual, last revised in 2018, offers comprehensive guidelines for conducting foreign exchange operations in the nation.
