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Taiwo Oyedele: Of Brexit, the New Foreign Exchange Policy, Tax and You

Taiwo Oyedele: Of Brexit, the New Foreign Exchange Policy, Tax and You

by | Jun 28, 2016 | Uncategorized


How the recent
developments and events of the coming months in the local and global
environment will impact you and tax.
There have been
significant events in the local and international space in the past few days.
Most notable locally is the new exchange rate policy of the Central Bank of
Nigeria (CBN) and internationally, the referendum by Great Britain to leave the
European Union (EU). Both key developments have impact on Nigeria, albeit to
varying extent. I have attempted to highlight some of these impacts in this
article.

The Brexit Referendum
On Thursday 23 June 2016,
citizens of the United Kingdom (UK) voted in a referendum either to leave or
remain in the European Union (EU). In a most shocking outcome, over 17 million,
precisely 17,410,742 or 52% out of the total 33,551,983 voters voted to leave
the EU compared to 16,141,241 or 48% that voted to remain. Since the outcome of
the referendum, the very first exit by any country since the EU was established
has got the whole world wondering what would happen next and the implications
not only to the UK and the EU but also the rest of the world.
The Brexit vote has
not only shocked the EU and the rest of the world, it also left many citizens
and residents of the United Kingdom themselves “fantastically stunned”. It is
not surprising that millions of British people have now signed a petition
requesting for another referendum. Whatever happens next,
one thing is certain – that Great Britain and the EU will no longer remain the
same.
The impact will be far
reaching. Over USD 2 trillion has been wiped off global capital markets across
all continents. This also means that less value for pension and retirement
plans with investments in those markets. Other issues range from
reconfiguration of the single market, renegotiation of trade agreements,
immigration and labour law, functions and so on. As a result of the uncertainty
created by the exit vote, the market has perhaps over-reacted as the British
Pound depreciated by about 10% within 24 hours, the worst in over 30 years. In
the medium to long term, the exchange rate to other major currencies will
probably recover but likely to be lower than pre-referendum levels for some
time. For Nigeria, there will be minimal impact. Nigerians studying in the UK
will need relatively less Naira to pay their fees. Those travelling to the UK
for business and vacation will also find it slightly more affordable.
In terms of importation
from the UK, this will become cheaper for Nigerians while exports to the UK
will become more expensive and therefore less attractive. British businesses in
Nigeria will be relatively more valuable to their UK group both in terms of
their returns on investment and consolidation value in Sterling.
The monies stolen from
Nigeria and stashed away in the UK by some politicians will be of less value
than if the funds had been recovered pre-referendum. We may have to renegotiate
the double tax treaty between Nigeria and the UK if Brexit triggers a leave
vote by any of its territories such as Scotland.
Businesses do not like
uncertainties and this is the main reason for the currency devaluation while
various rating agencies have either downgraded or are considering downgrading
Britain and even though nothing has really changed after the election. The
actual exit could still take about 2 years. Where possible, governments must
address all controllable uncertainties as much as possible from macro-economic
policies, fiscal direction and so on.
In the Economic Community
of West African States (ECOWAS), which was established in 1975, Mauritania
pulled out of the Union in December 2000 without any fanfare and no noticeable
impact. This is largely due to the fact that ECOWAS has not really fully
integrated and taken off. The Common External Tariff within ECOWAS was only agreed
in 2015, forty years after the Union was formed. Also, the size of the UK
economy and its influence on the global stage makes it completely different and
unprecedented.                            
           
And what about the new
foreign exchange policy? 
The Central Bank of
Nigeria recently announced a change in foreign exchange policy from the fixed
official rate to a floating exchange rate which is largely market driven. Based
on the 2016 Budget, a benchmark exchange rate of N197 to the USD was used in
estimating government revenue. With the exchange rate now around N281,
government will get about 40% more from its dollar revenue. This will help
cushion the impact of decline in oil revenue as a result of the crisis in the
Niger Delta and hopefully also help reduce the planned deficit funding of N2.2
trillion in the Budget.
State governments will
also get more revenue to share in Naira terms from federal allocation to
improve the dire financial position of the states especially given that 27 of
the 36 states are reported to be defaulting on salary payments as at the end of
May 2016.
In a similar fashion,
import duties and VAT on importation should significantly improve partly due to
the higher exchange rate being used to calculate payments and also because of
the improved liquidity in the foreign exchange market which should result in
more importation. Also, it is expected that there will be more inflows of
foreign direct investments, foreign portfolio investments and diaspora
remittances which will improve economic activities and consequently the
country’s tax base and tax take.
So what’s next?
Investors and businesses
do not like uncertainties. Unfortunately there will always be uncertainties in
any economy but savvy investors learn to manage rather than avoid
uncertainties. However, uncertainties that are self-inflicted should be avoided
as they not only discourage some investors, they also necessitate a risk
premium for investments to be viable. As a country we can do very little or
nothing to control the price of crude oil, we had no control over Brexit vote,
and we will not be able to control whether Donald Trump wins American’s
election but we can, for instance, control the uncertainties created by our
failure to pass the Petroleum Industry Bill, inability to fully deregulate the
downstream sector, the uncertainties around fiscal and industrial
policies. 
Government must strive to
reduce uncertainties to attract both domestic and foreign investments.
Businesses that wish to play in this market need to plan for the long run but
also must be sufficiently agile to respond quickly and efficiently to unplanned
changes which they will inevitably encounter. Either way, Africa and Nigeria in
particular continues to be an attractive market for discerning investors who
will gain an advantage for moving in earlier than those who wait until they get
more certainty, which may be a very long wait.
Taiwo Oyedele is the Head of Tax and Corporate Advisory Services at PwC
Nigeria (the world’s leading professional services firm with presence in
over 150 countries). Taiwo has been in the forefront as a thought
leader and prominent speaker on key accounting and tax issues including
the tax implications of IFRS Adoption and Transfer Pricing. He is an
ardent advocate of tax reforms with particular emphasis on tax
simplification and transparency. He recently represented the
Manufacturers Association of Nigeria at the National Economic Council
(body of all 36 Governors and the Vice President) to successfully make a
case for reforms to address multiplicity of taxes.


ED’S Note- This article was originally published by the author here.
What Brexit Will Mean For Intellectual Property – Harbottle & Lewis LLP

What Brexit Will Mean For Intellectual Property – Harbottle & Lewis LLP

by | Jun 27, 2016 | Uncategorized

1.    
We don’t know what relationship the UK will
have with the EU post-Brexit – other than not being a member state. Every
business must plan an enterprise-wide review of its intellectual property
licence and distribution agreements to establish any requirements for
renegotiation (and possibly, termination).  The most obvious point being
that agreements defining a territory as “the EU” will almost certainly have to
be interpreted as excluding the UK from the date of exit.


2.    
The departure of the UK from the EU could
undermine much of the rationale for existing licence arrangements that are
drafted on an EU-wide basis. This could result in pressure to terminate or
renegotiate, and potentially litigation.

3.    
EU law must be complied with in the UK
until we leave. However, Directives that have not yet been implemented (such as
the recent Trade Secrets Directive) will almost certainly not be
implemented.  Meanwhile, however, English courts may nevertheless be
obliged to apply the principles of such directives whether or not implemented.

4.    
Depending on the approach taken by law
makers, the principle of exhaustion of rights might no longer apply in the UK,
unless we become an EEA member like Norway. If so, it would be possible to use
IP rights to block any imported genuine goods at the UK border, whatever their
origin.

5.    
Obviously, the EU-wide IP rights, such as
the EU trade mark and Community design rights, will no longer include the UK
once we leave the EU. This has practical and cost implications for IP managers
in terms of filing strategies.  Unless some kind of automatic conversion
of rights is established as part of the exit transition, action will need to be
taken well in advance of leaving the EU, to ensure protection in the UK. 
It may be possible to convert EU-wide marks to national rights, or new filings
may be required.  A massive disadvantage of new filings will of course be
the loss of priority, unless again that is catered for by transitional
legislation.

6.    
Remedies for infringement of intellectual
property rights will change. In particular, terms settling past disputes, and
cross-border injunctions granted by courts, will have to be reassessed. 

7.    
Litigation strategies will also need to be
reassessed, since the jurisdiction rules under the Brussels Regulation might no
longer apply. This will affect choice of forum for future disputes.

8.    
Much of what we have come to understand as
enshrined principles of IP law will be open to reinterpretation. Decisions of
the CJEU will continue to have effect indirectly as a result of past decisions
of our appeal courts based on CJEU judgments.  Eventually, those decisions
will be reassessed.  Many may view this as a welcome opportunity for the
English courts to simplify and clarify some of the harder concepts of, in
particular, trade mark law.

9.    
The Unified Patent Court system and the
Unitary Patent will not include the UK. This will also seriously delay the
commencement of the Unified Patent Court for the remaining member states, since
the UK’s ratification was essential to commencement and, further, the UK was to
be the location of one of the three central divisions.  UK businesses
holding EP patents still need to understand the UPC system, however, and in
particular must stay focused on the key current requirement of assessing
whether to opt EP patents out of UPC.  For the avoidance of doubt, none of
this affects the long-established EP patent system, which is not specific to EU
member states.

10.And finally – this doesn’t necessarily stop
with the UK. Businesses should be alive to similar issues looming in other EU
member states, and take care when drafting any EU-related IP agreements. 
There is no need for immediate panic, but Brexit will in due course have huge
implications for IP rights holders and licensees.  IP practitioners, and
rights holders, will be at the forefront of shaping how things play out.

Jeremy Morton, Partner
jeremy.morton@harbottle.com
(+44) (0)20 7667 5293

Jeremy Morton leads the
contentious intellectual property practice at Harbottle & Lewis. He is a
senior intellectual property and technology law adviser and litigator in the
UK, with over 20 years’​experience. He advises on
a wide range of European IP law, contentious and non-contentious, including
patent litigation, copyright, trademarks, designs, trade secrets, as well as
data protection. He frequently advises in the technology, arts and
entertainment fields. He also advises on brand management.

Ed’s Note: This article
was originally published by the author here. 
Hague Code of Conduct against Ballistic Missile Proliferation

Hague Code of Conduct against Ballistic Missile Proliferation

by | Jun 24, 2016 | Uncategorized

Photo – bizradar.co

The Hague Code of Conduct
Against Ballistic Missile Proliferation was formally brought into effect on
November 25, 2002, at a launching conference hosted by the Netherlands in The
Hague. The U.S. participated in the conference and is one of 93 original subscribing
states to the HCOC (formerly known as the International Code of Conduct Against
Ballistic Missile Proliferation). As of June 2016, 138 countries have
subscribed to the HCOC.


The HCOC is aimed
at bolstering efforts to curb ballistic missile proliferation worldwide and to
further delegitimize such proliferation. The HCOC consists of a set of general
principles, modest commitments, and limited confidence-building measures. It is
intended to supplement, not supplant, the Missile Technology Control Regime,
and is administered collectively by all subscribing states. Nigeria is a
subscribing state.  Other African States
include Algeria, Egypt, Djibouti, Somalia, South Sudan, Ivory Coast,
Togo, Equatorial Guinea, São Tomé and Príncipe, Angola, Namibia, Botswana,
Lesotho, Swaziland, Mauritius, Zimbabwe
The HCOC is the result of
international efforts to regulate access to ballistic missiles which can
potentially deliver weapons of mass destruction. The HCOC is the
only multilateral code in the area of disarmament which has been adopted over
the last years. It is the only normative instrument to verify the spread of
ballistic missiles. The HCOC does not ban ballistic missiles, but it does call
for restraint in their production, testing, and export.
By subscribing to the
HCoC, members voluntarily commit themselves politically to provide pre-launch
notifications (PLNs) on ballistic missile and space-launch vehicle launches
(SLVs) and test flights. Subscribing States also commit themselves to submit an
annual declaration (AD) of their country’s policies on ballistic missiles and
space-launch vehicles.

Since the entry into force
of the HCoC in November 2002, annual Regular Meetings of Subscribing States to
the HCOC (annual conferences) are held in Vienna. The 15th Regular Meeting took
place from 2 June to 3 June 2016 under the chairmanship of Kazakhstan. The 16th
Regular Meeting is scheduled from 6 June to 7 June 2017 under the chairmanship
of Poland.

According to Nicolas
Kasprzyk, “the African continent is almost free of ballistic missile activities.
In the 1970s, building on activities it had undertaken on short-range missiles,
South Africa clandestinely developed a longer-range missile capacity as a means
of delivery for nuclear warheads. The programme was successful, resulting in a
missile system that could have delivered a small nuclear payload over a long
range. In 1993, the decision was taken to halt and fully dismantle the
programme”.
Photo – Thetubeguru.com 

Nicolas further states
that so far, the matter of ballistic missile proliferation has not been high on
the political agenda of African states. There have been no official reactions
from African states to the flight-testing of ballistic missiles; and the
African Union (AU), which has recently strengthened its role in the prevention
of the proliferation of weapons of mass destruction, is relatively absent on
the matter of ballistic missiles.

He further shares that, the
AU’s Common African Defense and Security Policy, adopted in 2004, identifies
‘the accumulation, stockpiling, proliferation and manufacturing of weapons of
mass destruction, particularly nuclear weapons, chemical and biological
weapons, unconventional long-range and ballistic missiles’ as a common external
threat to continental security in Africa. This provides the policy framework to
deal with matters related to ballistic missiles, but in practice, not much
attention is given to such missiles. This is also noted in the recent report of
the Chairperson of the AU Commission on Arms Control, Disarmament and
Non-Proliferation.

He believes African states
stand to gain strong political benefits from positioning themselves more
assertively on the matter of ballistic missiles. This would be consistent with
the continent’s ambition to rise as a global power. It would also give more
strength to African views and claims related to general and complete
disarmament, since ballistic missiles capable of delivering weapons of mass
destruction are part of the equation.

Bill To Amend Public Procurement Act Passes 3rd Reading In Senate

Bill To Amend Public Procurement Act Passes 3rd Reading In Senate

by | Jun 23, 2016 | Uncategorized

A bill seeking to amend
the Public Procurement Act 2007 has passed third reading on the floor of the
Senate.

In a report presented by
Sen. Joshua Dariye, the Senate advocates the use of local content in public
procurement process as well as a 25 percent mobilisation fund for contractors,
up from the current 15 percent given to them.

Senator Dariye said that
the Bill, when assented to, will amend certain relevant sections of the 2007
Procurement Act to favour local manufacturers and ensure speedy completion of
projects.
The Bill specifically
seeks to amend section 15(1) of the Act by inserting additional clauses that
would close the gap created by the Act.

“Similarly, the issue of
disposal which is an integral aspect of procurement has been aptly captured by
the amendment in the new sub-clause 1(e). The committee has equally sustained
the amendments of section 34(1,2) sought by the bill for the purpose of
patronizing made in Nigeria goods: this will go a long way to encourage our
Nigerian manufacturers.

“The amendment proposed by
the bill in section 35 is to review upwards the mobilization fee from 15 per
cent to 25 per cent that may be paid to a supplier or contractor. This is aimed
at enhancing timely completion of Procurement Processes at various phases”, he
said.
The Senate also approved
the inclusion of Nigerian institute of Architects and the Nigerian Institute of
Quantity Survey as members of the National Council on Public Procurement.

Source: NASS 

House moves to restructure The Niger Delta Amnesty Programme

House moves to restructure The Niger Delta Amnesty Programme

by | Jun 23, 2016 | Uncategorized

Members of the House of
Representatives have called for restructuring of the Presidential Niger Delta
Amnesty Programme put in place by former President Musa Yaradu’a in June 2009.
Leading debate on the general principles of a Bill which seeks for the
restructuring on Tuesday, June 21, 2016, Hon. Oluwole Oke asserted that the
Bill seeks the rehabilitation and reintegration of the Programme for proper
implementation; adding that better articulation and organization of the
Programme to serve the purpose of disarming, re-educating and reintegrating the
ex-militants into the society without fear of them constituting a threat to the
general public is cogent and in order.

He stated that the
Programme has not been effective because it lacked a clear cut guidelines for
implementation, and also of the view that promulgating a legal framework for
the Programme would underpin its relevance and sustainability. On his part,
Hon. Ossai Nicholas Ossai posited that the amnesty Programme came as a result
of the outcry and yearning of the people of the region and the government of
that time reasonably responded to particularly mitigate the challenges faced by
the Deltans. He believes it is about time, the National Assembly charted a
better and more focused structured Programme for easy implementation and
access. With his submission and that of other members, the Bill scaled
seconding reading and referred to the Committee on Niger Delta Development
Commission (NDDC).
In another development,
the House has unanimously passed a resolution urging President Muhammed Buhari
to prevail upon the Attorney General of the Federation and other members of the
National Executive Council to conduct themselves in line with the Constitution
and have some respect for the principle of separation of powers. On the heels
of a motion of urgent public importance moved by Hon. T. J. Yusuf, the House
also urged the Executive Council to shun the proposed prosecution of the
principal officers of the Senate.
He cited the case of Kogi
State Assembly and continuous decline of invitations of legislative Committees
by Ministers as clear demonstration of disrespect for the National Assembly. He
cautions that if the move is not checked, the  nation’s democracy could be
threatened. He appealed to the legislators to braze up to safeguard the
nation’s democratic institutions as well as protect the independence and integrity
of the National Assembly.

Source: NASS

Akorede Omotayo – Binding a contract by Text Message?

Akorede Omotayo – Binding a contract by Text Message?

by | Jun 22, 2016 | Uncategorized

photo – irishtimes.com 

Binding a
contract by Text Message? New Traps for Deal – Makers in Commercial
Negotiations.

With the prevalence of email and text
messaging in today’s business world, multi-billion dollar deals can be signed
up without the parties even sitting down together. As Frank Aquila and Sarah
Payne of Sullivan & Cromwell LLP submits, Business negotiations, and
especially commercial deals, between lawyers and businesspeople alike occur
over emails, often with shorthand, with words that may not be chosen with the
same degree of thought and care as the words that are “written” in the actual
transaction document.

However, in a recent United States decision
by the Massachusetts Land Court, considered by many as a landmark, text messages between two real estate
brokers regarding the purchase and sale of a commercial building was held to be
capable of constituting an acceptance to an offer.

Facts of the
case
In this case, St. John’s Holdings, LLC v. Two
Electronics LLC, the plaintiff, St. John’s
Holding (SJH), and the defendant (Two Electronics) had negotiated for the sale
of a commercial building worth $3.232 million. Both parties were represented by
commercial real estate brokers and had negotiated in person and via email and text
messages, during the course of which both parties had agreed to reduce the
terms of the agreement to a letter of intent (LOI).

Subsequently, the seller’s broker sent
the buyer’s agent a text message asking that the buyer sign the final LOI and
submit a deposit check, which the buyer later did. Each of the text at issue
concluded with the sender’s name. However, rather than execute its end of the
LOI, the seller’s agent accepted a third party’s offer to buy the building. The jilted buyer
sued to enforce its rights as a buyer of the building under a binding letter of
intent to purchase.

It was the defendants case that no
contract was formed because Two Electronics did not accept the offer to
purchase and the communication between the parties about the sale of the
property did not satisfy the condition in the Massachusetts’s Statute of Fraud
that an acceptance will not be binding except it is in a written form.

Court’s Judgement
However, even though the Seller did not
physically sign the LOI, the Court found that the text messages, taken in
context, constituted an acceptance to make the contract binding. Further, the
Court found that the typed signature at the end of the text was sufficient to
authenticate the identity of the sender.
In other words, as O’Connor reiterates, the court noted that “[t]he
communications between SJH and Two Electronics before the text message
evidenced a meticulous attention to provisions that would govern the agreement
to purchase the [building].” When read in context of the exchanges between the
parties, the court concluded that the text messages at issue constituted a
binding offer and acceptance.

Concluding
remarks
Of course this case is just a
persuasive precedent, it’s importance to contractual dealings in Nigeria is a
little more than obvious. Contracting parties and brokers should be aware that making
commercial deals via emails and text messages is gradually becoming a dangerous
minefield.

Brokers
need to take precautions to qualify their language in all
electronic communications and warn their clients to use the following disclaimers when negotiating
deals: “Emails
and text messages sent or received shall neither constitute acceptance of
conducting transactions via electronic means nor shall create a binding
contract in the absence of a fully signed written agreement.

It is
the opinion of this writer that a new level of precaution is required when
engaging in such instantaneous and often seemingly informal commercial
negotiations.

Akorede Omotayo 

Dunmade Onibokun: Elements of a good Alibi in a criminal trial

Dunmade Onibokun: Elements of a good Alibi in a criminal trial

by | Jun 22, 2016 | Uncategorized

Photo – 123rf.com 

Kunle
Aminu Eze, was accused of armed robbery. It was alleged that he and 5 other
people accosted John, a gold merchant just returning from the bank and robbed
him of N15,000,000 (Fifteen Million
Naira). Kunle Aminu Eze was identified by a witness to the crime who claimed
she recognized him as a regular client of an auto-mechanic in her neighbourhood
and described how Kunle Aminu Eze had led the gang by shouting orders. Kunle
Aminu Eze however expressed his innocence and claimed to have been with his
girlfriend in Lokoja when the act occurred. The matter went to trial before the
High Court and Kunle Aminu Eze was sentenced to life imprisonment.


There are many legal
elements to the scenario above including; the crime, the testimony of the
witness, the accused person’s defence and also the conviction. This post will
however be taking a look at the 3rd stated element, which is the
accused person’s defence. How come he had been convicted for the crime even
though he claimed to have been in Lokoja, when the crime was committed?

The word Alibi in its original
latin context as an adverb, means “elsewhere”. The Eight edition of the Black’s
Law Dictionary defines it as “a defence
based on the physical impossibility of a defendant’s guilt by placing the
defendant in a location other than the scene of the crime at the relevant time”.
In essence, the accused person’s alibi from our scenario was that he was
somewhere else with his girlfriend at the time of the armed robbery, how come
he was then convicted?

In the case of Ogoola V.
The State (1991) 2 NWLR (Pt. 175)509, the court held that “it is not a proper
way of raising a defence of alibi for an accused to merely show that he was
elsewhere at a time antecedent to the time the crime was proved to have been
committed. He must go further to show that because he was at that place at that
time, it was impossible for him to have been at the scene of the crime when it
was shown to have been committed.”
The essence of the above
decision is that when an accused person claims in his alibi to have been
elsewhere, he must further prove that he was indeed elsewhere.
To further illustrate, the
court in Obiode V. The State (1970) 1 ALL NLR 35 stated that “the law is that it is not enough for an
accused to raise the defence of alibi at large. He must give adequate
particulars of his whereabouts at the time of the commission of the offence to
assist the police to make a meaningful investigation of the alibi. If the
accused person said he was in a particular locality or with a particular person
or persons, he must give a lead as to the specific place, the names and/or
addresses of whom to contact and the relevant period he was away from the scene
of the crime.

It must also be noted that
if the alibi is however contradicted by the prosecution and sufficient proof is
given to rebut the alibi, then the defence fails. For instance, Kunle Aminu Eze
from our scenario merely stated that he was away from the scene of the crime in
Lokoja. He never gave the name or address of the girlfriend he was with,
neither did the girlfriend testify on his behalf or write a statement
supporting his case.

However, the prosecution
was able to tender the statement of the eye witness who described how Kunle
Aminu Eze had not only been at the scene of the crime at the material time, but
had participated in the crime and was in fact the ring leader of the group of
robbers as he was the person shouting orders to the other members.  

In a nutshell, for the
defence of alibi to be successful, such defendant must prove his alibi with
supporting facts such as details of where he was and whom he was with and also
the prosecution must not have superior facts to counter the alibi.
Dunmade
Onibokun Esq.
Adedunmade Onibokun and Co.