Home News FEM EMBARGO: Firms blame CBN

FEM EMBARGO: Firms blame CBN

by Business News Report

Exporting firms have decried the Central Bank’s indiscriminate use of embargo instrument on their companies. Most of the firms have accused the Central Bank of not cross checking with their bankers before invoking the embargo instrument on them.
An investigation conducted by The Republic on the activities of exporters reveals that some of the embargoes clamped on exporters appear to be nasty and uncalled for.
Some of the exporters spoken to during the course of investigation expressed disgust at the development.
One of the exporting firms Aramco Nigeria Limited told The Republic that CBN’s embargo on them vide circular No. TD/AD/204/87 was only communicated to tem in December. Not only that the company said they repatriated every kobo they earned as foreign exchange.
The company said they contacted their bankers, NIB which said they record for an apology from the CBN through their bankers

At NIB officials said that the problem arose out of the fact that s at the time the embargo was placed on the company the CBN had no accurate statistical data on the foreign exchange repatriation position of the company. The bank said they make returns forthrightly and repatriation could come in-between returns.
The CBN they said should always find out from banks the true position before embargoing companies.
Aramco Nigeria Limited disclosed that as a big time exporting firm they cannot afford to keep their foreign earnings when they know such will frustrate their business chances.
Officials of Food Processing Company on the other hand blame CBN for hurried embargo.
The company said that the proper thing the CBN should have done where it is suspected that a company has defrauded is to look at its previous records of repatriation of export proceeds and see the consistency of default before clamouring an embargo on such firms. Officials of the company also said that the Central Bank ought to know better since returns to it are not done on daily basis.
Officials of other companies who pleaded anonymity said that there are situations when an exporters earnings are based on a particular price while the price might fall on actual delivery.
In such a case the CBN gets it wrong and feels the exporter is trying to be fraudulent.
According to the firm, its company was embargoed for a non existing £14,000.
The company said it had a total of £3,014,000 of foreign exchange. It repatriated £3,000,000 while the other £14,000 was between dragged between it and the importer who were insisting on non-payment for what the importer considered as low quality.
The commodity had been priced at 1st grade on export but the importers were insisting on paying for 2nd. As a result of this controversy over price differential, the company was embargoed for what the company described as perceived foreign repatriation default.
As at the time of the investigation, 13 exporting companies were embargoed for non-repatriation of foreign exchange proceeds pre-SFEM while 22 were embargoed.
Of these companies, attempt to reach some of them failed as they could not be reached through their registered address.
One of such companies was Euro Nigeria Export Company Limited. The company used UBA Idumagbo branch as its forwarding address. When The Republic called at the branch, the bills manager said they had no idea of the existence of such company.
The manager said the premises was used only by UBA Idumagbo branch. The manager further said that no corporate body uses another as forwarding address.
For the same reason, The Republic could not reach E.D, F Man Nigeria Limited which used Universal Trust Bank, Obalende as its Forwarding address. The same happened with Bariod International Limited which in its case, used the National Bank of Nigeria overseas branch as its forwarding address.
Exchange control and trade officials of the Central Bank said they act on the basis of information supplied by banks. They argue that it is the responsibility of authorised dealers to furnish it with accurate information on their customers.

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