Nigeria | Is Repatriation of Funds Out of Nigeria Possible? (2)
Contributed by CJP Ogugbara, CJP Ogugbara & Co (Sui Generis Avocats), Nigeria.
Suffice to say that it is not all debts sought to be recovered that are governed by the policies and legislative instruments on the CCI and TTA. There are those debts that accrued from simple trades, importation and exportation of goods and services between Chinese seller (either company or individual) and a Nigerian Buyer (either company or individual); or Chinese seller (either company or individual) in China and another Chinese buyer (either company or individual) resident in Nigeria. In this category, there are options available to the creditor, but care must be taken to avoid breaching the Nigerian Laws on Money Laundering Offences. Some of these options have not been criminalized nor considered a threat of any kind to the Nigerian fiscal regime system. An International Law Principle enunciated in the case of S.S. Lotus (France v. Turkey) (File E. c., Docket XI, Judgment No. 9 delivered on the 7th September 1927), by the PERMANENT COURT OF INTERNATIONAL JUSTICE sitting in its Twelfth (Ordinary) Session, holds that: “States have a sovereign right to act in a way they desire unless a specific rule of international law prohibits that behavior.” In Nigeria, this principle is buttressed by See Section 36 (12) of the 1999 Constitution as Amended and FRN v. IFEGWU (2003) 15 NWLR (Pt. 842) 113, to the effect that what is not prohibited is permitted, that is to say that “what the law has not criminalized cannot be criminalized by any institution including the Court.
First, the creditor may explore the route of Bureau de Change and other Black-market windows. The major disadvantage is that the exchange rate is based on the black-market prices. The second option is reinvestment in any investment portfolio on behalf of the creditor and same held on trust for the creditor by the Law firm. Where debts are recovered for a creditor, he may reinvest the fund into shares, equity and loans to local companies. The third option could be by redirecting the funds into importation of raw materials, goods and other services from Nigeria into China. Under this option, the creditor can look out for exchange opportunities with local Chinese importers from Nigeria. Apart from the above options, the creditor may look out for a holder of Certificate of Capital Importation (CCI) in China and have a transfer, assignment, acquisition or merger of investments contracts. In this instance, the creditor although not the transferor of the initial investment fund supported by the CCI, can still be the beneficiary of a fund covered the CCI sought to be repatriated. It need be said that in this situation, the parties themselves or through their representative would approach a CCI Licensed Dealer to present the evidence of the transfer, merger, assignment etc. of the investment. for an interface with the CBN as the regulator in order to obtain an approval for the arrangement. It is the opinion of this writer that redirection into importation of raw materials from Nigeria to China is the ultimate and best option.
Contributor: CJP Ogugbara
Agency/Firm: CJP Ogugbara & Co (Sui Generis Avocats)(English)
Position/Title: Founding Partner
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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.