Nigeria | Is Repatriation of Funds Out of Nigeria Possible? (1)

Contributed by CJP Ogugbara, CJP Ogugbara & Co (Sui Generis Avocats), Nigeria.

Repatriation is an important aspect of recovering debts for foreign investors or creditors. For the purpose of our discuss, we shall reckon with the provisions of Articles 1, 2, 3 and 6 of the Bilateral Treaty/Agreement Between the Government of the People’s Republic of China and the Government of the Federal Republic of Nigeria for the Reciprocal Promotion and Protection of Investments which was entered into in 2001 between the two countries. Article 1(1)(c) of the treaty defined investment to include claims to money or to any other performance having an economic value associated with an investment. It is obvious that recovered debts can considered an investment under this category. Secondly, Article 1(2) regards Nationals of either of the countries as investors. With the definition given above, it becomes apparent that creditors conform into this category. Also, Article 2(2) guarantee protection of any recovered funds from debtors. While Article 3 assures investors from the participating States of just and equitable treatment. It further assures of Most-Favoured-Nation” (“MFN”) Treatment to such investment. Finally, Article 6 of the Treaty Agreement guaranteed repatriation of investment and the return on it. However, this guarantee is subject to the local laws of each country.

Repatriation of funds out of Nigeria is regulated by the provisions of Nigerian Investment Promotion Commission Act; Foreign Exchange (Monitoring and Miscellaneous Provisions) Act; Central Bank of Nigeria Act; Investment and Securities Act and National Office for Technology Acquisition and Promotion Act. Normally, these frameworks make repatriation of funds out of Nigeria in any convertible currency of choice to the owner of the fund is easy under the Foreign Direct Investment Scheme of the Nigerian Government. The procedure is liberalized once the owner of the funds can show proofs of the importation of the funds into Nigeria or evidence of technological services to a Nigerian Company. However, not all debts are considered investments that are brought into Nigeria through the Certificate of Capital Importation (CCI). Also, it is trite that not all debts sought to be recovered would be considered to have emanated from Expert Technological services from Chinese national to a Nigerian Company under the Technology Transfer Agreement.

A Certificate of Capital Importation (CCI) is a Certificate issued to a foreign investor in a Direct Foreign Investment Scheme of the Nigerian Government as proof of an inflow of foreign direct capital investment, either as equity or debt; cash or goods. A CCI is issued by a licensed dealer usually a Commercial Bank on the behalf of the Central Bank of Nigeria (CBN). Thus, a debt sought to be recovered by a creditor could been funds invested in a Nigerian company, loans given to Nigerian Company and funds used in purchasing shares from a Nigerian Company etc. The Technology Transfer Agreements are those service contract agreements executed between a Chinese Expert and a Nigerian beneficiary (either individual or company) for the transfer of foreign technology. Examples of such services could be Technical Know-How Agreement; Software License; Consultancy Services Agreement etc. However, such agreements must be registered with the National Office for Technology Acquisition and Promotion in accordance with the Act. These services if rendered but not paid for, crystalize into debts, recoverable as enumerated above. In the foregoing cases, the repatriations of the recovered debts are done through the Foreign Exchange open market of the Central Bank and usually done at the official exchange rates. All that is required is to follow the exact means by which the funds were imported or the technology was transferred, of course subject to payments of all accruing taxes.

Contributor: CJP Ogugbara

Agency/Firm: CJP Ogugbara & Co (Sui Generis Avocats)(English)

Position/Title: Founding Partner

Country: Nigeria

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This post is a contribution from CJP Ogugbara & Co (Sui Generis Avocats). Established in 2014 as a Partnership Firm in Nigeria, CJP Ogugbara & Co has been working along and engaging in dispute management, litigation and arbitration, commercial practice: real estate and investment advisory, tax practice and energy consultancy. Apart from the core practice areas, they also facilitate and extend practice to the development of clients’ businesses and corporate interests, especially as they apply to the Nigerian economy and investment circle.

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