Why Intels’ sister firms lost work visas – FG

According to government, the action was based strictly on extant laws guiding operations of the nation’s Export Free Zones. Documents exclusively obtained by our reporter, showed that while Intels ignored notices by the Oil and Gas Free Zone Authority, OGFZA, to meet required conditions for renewal of its 2017 operational license, five other firms allied to it, voluntarily applied for de-registration to quit the free zones. The document showed that having lost their operating licences, their work visas had to be cancelled. It also revealed that Intels was reminded in writing thrice this year, in March, June and October, to renew its operational license in order to continue to operate with its expatriate staff at the free zones but ignored the letters from the agency and threatened to take legal action against the Federal Government. The conditions for renewal of a free zone are payment of license fee, payment of any other debts owed to the Authority, submission of audited accounts and returns and any other documents that may be required by the Authority. Managing Director of Oil and Gas Free Zones Authority, Mr. Umana Okon Umana, who confirmed the position to our reporter yesterday, said that non-payment of stipulated fees and failure to meet other conditions precedent to the license renewal by any free zone enterprise violates Section 35 of the Oil and Gas Free Zone Regulations of 2003. Section 35 of the Oil and Gas Free Zone Regulations of 2003 states: “A license shall be valid for one calendar year and upon expiration, a license shall be renewed on: payment of the prescribed fees; payment of any outstanding amount due to the Authority, the presentation of any other documents, returns or information which the Authority may require, and the presentation of an acceptable appraisal report in the case of Free Zone enterprise.” Based on the failure of Intels to meet the conditions for license renewal for the year, the OGFZA MD, Umana Okon Umana, on October 23, 2017, wrote a reminder to the MD of Intels, drawing his attention to the violation and also pleaded with the firm to fulfill the conditions so as to continue to operate in the zone. Letter to Intels In the letter with reference No. FZA/INTELS/02/VOL/1017/011, the OGFZA boss, Umana wrote: “In our letters FZA/FZE/OPS/VOL/0617/004 dated June 5, 2017 and FZA/FZE/OPS/VOL/0617/005 dated June 7, 2017, we had written to draw your attention to the failure of Intels Nigeria Limited to renew its Free Zone License for 2017 in line with the provisions of Section 35 of the Oil and Gas Free Zone Regulations 2003. “This issue was also highlighted at the meeting of 13th March 2017 held between the MD of Intels Nigeria Limited and the MD/CEO of the Authority. We observe that you have failed to take necessary steps as provided in the extant law and regulations to renew your license,” the OGFZA MD wrote.’’ In another reminder sent to Intels on June 5, 2017, OGFZA MD wrote: “We consider it necessary to draw your attention to the implications of not renewing your Free Zone License up to the middle of a fiscal year. Section 35 (1) of the Oil and Gas Free Zone Regulations clearly provides that a license is valid for one calendar year ending 31st December. “You should also note that OGFZA had previously granted extension up to the 7th of April 2017 for you to complete the requirements for the renewal of your license as listed above, but unfortunately, up to the time of writing this letter, you have not met the above requirements. “It is, therefore, obligatory on the part of OGFZA to determine your status as to whether you are a licensee in the Free Zone or a company operating in the Nigeria Customs territory. As it stands now, you are no longer a licensee in the Free Zone and we are under obligation to share this information with sister Government agencies like FIRS, BIRS, NIS, NCS, NCDMB, ITF, Eleme LGA etc. “Please be informed that effective June 2017, you will not be entitled to all the Free Zone incentives including: Company income tax, Value Added Tax, Withholding tax, Education tax, Customs Duties, Immigration Non-Quota Regime and Vehicle Stickers”. “In summary, the implications are as follows: “You will be required by law to refund withholding taxes to FIRS on all land leases and maintenance fees from the period January 2017 and beyond. The FIRS and BIRS will be advised to conduct total audit of your books to determine the amount of taxes accruable to the government in line with the Companies Income Tax Act. “Nigeria Customs Service will determine the value of custom duties due to the Federal Government on all imports from January 2017 till date in compliance with the Customs Excise Tariffs etc Consolidation Act. “Nigeria Immigration Service will cancel all visas previously approved under the Free Zone regime. “We, therefore, strongly advise you to take advantage of the next seven days to regularize your free zone status. Please accept the assurances of my warm regards.’’ Intels’ sister firms opt out On the other hand, Intels sister companies, Prodeco International Limited, West Africa Machinery Services Limited, MGM Logistics Solutions Limited and Orlean Invest Limited actually applied to the OGFZA to de-register them, as they did not intend to continue operating from the zone. Apart from MGM Logistics Solution, which wrote its letter on March 14, 2017, to the OGFZA to de-register it from operating in the Free Zone, the other companies sent in their letters on April 25, 2017, to OGFZA, praying it to de-register them from the free zones. The Prodeco’s de-registration letter addressed to the MD/CEO of OGFZA and signed by its Secretary on April 25, 2017, read: “Application to De-register Prodeco International Limited as a Licensee in the Oil and Gas Free Zone, Onne. “Sequel to our letter to you dated 22nd February 2017 on the above subject matter; we further confirm the decision of our company not to renew its registration as Licensee in the Oil and Gas Export Free Zone, Onne, with effect from January 2017. “Accordingly, you are please requested to delist our company from the Oil and Gas Free Zone Registry with effect from the said date due to Lack of Business. “We thank the Authority for all its assistance and cooperation with our company for the duration of our license, Yours faithfully for Prodeco International Limited.” Similar de-listing requests were sent in to OGFZA by Mike N. Epelle, Group General Manager, Legal and Corporate Affairs on behalf of Orlean Invest Limited, Wams Machinery and Services Limited while Frank Mokogwu wrote to the OGFZA to authorise the exit of MGM Logistics Solution on March 14, 2017. Based on the applications by the five companies to exit from the Free Zone with effect from October 2016 and their indication not to be operating from there with effect from January 2017, the OGFZA subsequently on October 2017 via a correspondence marked FZA/NIS/02/Vol/1017/008, wrote to the Comptroller-General of the Nigerian Immigration Service to cancel the expatriate quota of the affected companies in line with their requests. OGFZA writes Immigration The letter to the NIS boss by MD/CEO of OGFZA with the caption: “Request for the Cancellation of Non-Quota Regime and STR Visas issued to Free Zone Expatriates for the Year 2017”, said: ‘’The oil and Gas Free Zones Authority has received applications for the deregistration of some companies in Onne Oil and Gas Free Zone. The companies are: Prodeco International Limited, West Africa Machinery Services Limited, Net Global System International Limitedm MGM Logistics Solutions Limited and Orlean Invest Limited. “The affected companies have not renewed their operating licences for the year 2017, and are therefore no longer Free Zone Enterprises. Accordingly, the companies can no longer benefit from the Free Zone Non-Quota Visa Regime or STR visas. “In view of the aforesaid, we hereby request that the above named visas of the expatriates in the above listed companies be cancelled. This document is submitted in line with the provisions of Section 20 of the Oil and Gas Export Free Zone Act, 2010 and Section 50 of the Oil and Gas Free Zone Regulations, 2003.” No politics to this — Umana Umana Okon Umana, in an interview with Vanguard yesterday, emphatically dismissed insinuations that the cancellation of the visas had political undertones, saying Nigerians should learn to respect the laws of Nigeria guiding their operations and adhere to them. He said: “Cancellation of expatriates’ permits of Intels and other affiliates of Intels is in accordance with extant laws and regulations of the free zones. There is nothing political about the action taken by NIS based on the recommendations of the OGFZA. “This position is supported by facts: The affiliate companies of Intels in March and April this year, wrote to OGFZA to voluntarily apply for de-registration of the said companies. Based on their applications for de-registration, the companies could no longer operate as Free Zones Companies. Furthermore, after the submission of their applications as would be expected, no further actions were taken by them to renew their licenses for 2017. “As it is, OGFZA merely processed the applications for de-registration by the companies and took the necessary consequential actions to ensure that they could no longer benefit from the free zones expatriates’ non-quota regime since with the change in their status they could not lawfully be allowed to enjoy those incentives. “We are therefore surprised about the political undertones or the attempts to politicize an action which is purely routine and in accordance with extant laws and more so when the requests for de-registration were voluntarily made by the companies. “In the case of Intels, their attention was severally drawn to the fact that they had failed to renew their license in March, April, June and October 2017 and they did nothing about it. The Free Zones operations of other companies, which had failed to renew their licenses for 2017, have also been suspended and there is nothing political about that. “It must be noted that all companies have to be treated in the same way under the law. In this case, Intels has also been treated like others, which refused to renew their licenses,” Umana explained. You’re scaring off investors — Samsung boss Meanwhile, more reactions yesterday trailed the the cancellation of the expatriate permits. Managing Director/COO of Samsung Heavy Industries in Nigeria, Mr Frank Ejizu, said: “You cannot be wooing investors on one hand and scaring them away on the other hand. It will not work. If there was a violation of the law, then there is a ground for sanction.” Mr. Joseph Amoni, General Manager, Finance of the Lagos Channel Management Company Limited, said the action of the government would scare foreign investors away from the country. He said the action of the Immigration Service was an indictment on their part, adding that officials of the agency ought to know when and how these residence permits were issued. It’s a sour situation — Rep Bago Similarly, the Chairman, House Committee on Maritime Safety, Education and Administration, Mohammed Umar Bago, said the situation was getting very sour. “It is getting sour and I do not want to be political; I want to be critical of the situation, I need to hear from both parties before I can make a comment.” Culled: Vanguard]]>