CBN Bars “Third Parties” From Purchasing Forex Routed Via Form M

The Central Bank of Nigeria has asked third parties to desist from accessing its SMIS forex window through FORM M forex purchases.

This implies that buying agents or companies would be removed from handling forex transactions on behalf of purchasers.

This was contained in a circular issued by the CBN bank on Monday.

The apex bank noted that “Authorized Dealers are herby directed to desist from opening of Form M whose payment is routed through a buying company/agent or any other third parties” effectively eliminating third parties or middlemen from transacting in forex deals in its official SMIS window.

According to the circular, the decision was taken so as to “ensure prudent use of our foreign exchange resources and eliminate incidences of over-invoicing, transfer pricing, double handling charges, and avoidable costs that are ultimately passed to the average Nigerian consumers”.

It asked authorised dealers to only open FORM M for Letters of Credit, Bills for Collection, and other forms of payments in favour of the ultimate supplier of the product or service.

The CBN also revealed it will be introducing a “Product Price Verification Mechanism to forestall over-pricing and/or mispricing” of goods and services imported into the country. It wants “All Authorized Dealers” to use the mechanism to verify quoted prices before FORM Ms are approved.