Lagos Free Trade Zone for what? Before now, sometimes around the year 2015, I had some ugly experience with commercial banks in Nigeria handling documents relating to free zone shipment for my clients. The commercial banks continued to reject files sent to them for PAAR processing based on the reason that documents are predating the Form M and the pro forma invoice. Thus, putting us in a position where we had to amend dates and ask exporters to reissue documents repeatedly before we could obtain PAAR and clear shipments from the Nigerian Customs Services.
Read Also: CBN FORM M AND PAAR REQUIREMENT IN BRIEF
LAGOS FREE TRADE ZONE: REASON FOR THIS ARTICLE
Upon careful researches and studies, I found to my surprise that the banks had got it all wrong over time. Issue was lack of knowledge on how the free zone works. This is what informed my decision to write this article. Therefor, I will explain to you how the free zone cargo clearance works. Similarly, in my next article I will guide you on how to register for a licence as an oil and gas free zone user.
LAGOS FREE TRADE ZONE: HOW THE FREE ZONE SHIPMENT WORK
Free zone shipments come to the zone without Form M. In theory, the DMS of the free zone are expected to issue a set of transit documents that would harmonise the Form M and the PFI. In practice however, DMS issue nothing. So, how did we solve the Form M/documents date problem with the bank? With my knowledge expanded, I included the following expression in my regular letter to the banks for PAAR applications. “Let me inform the bank that free zone shipment come into the zone without Form M. Hence the issue of final documents predating Form M and PFI should not arise.” This statement is exactly what changed the game. Some of the banks called and I educated them on how oil and gas free zone operate.
LAGOS FREE TRADE ZONE: What really is a free zone?
Free Trade Zone is a designated area where goods are imported into for value addition without the intervention of the Customs. The goods that arrive to the zone are considered to be in another country. Consequently such goods must be exported to the country’s Customs area before it is taken to be in the country. The term is often used loosely interchangeably with free free economic zone.
There are a handful of free zones in Nigeria. My article for ‘how to register for a free zone’ will show a number of them.
Read Also: INTERNATIONAL CARGO SHIPPING TO NIGERIA.
As if in a nutshell, to import into the Nigerian free trade zone, you must be a licensed operator. Free zone cargo clearance from the zone into Nigeria Customs Area follows normal clearance procedure. The only exception is that the shipments come to the free zone without Form M. Thus, free zone shipment has documents with dates before Form M dates. So, when making a request for PAAR issuance let the bank know it’s a free zone shipment.