Cabotage Services

Requirements For The issuance of Cabotage Waivers

REQUIREMENTS FOR THE ISSUANCE OF CABOTAGE WAIVERS

GENERAL STAKEHOLDERS CONFERENCE ON THE IMPLEMENTATION AND GOVESections 9 – 11 of the Coastal and Inland Shipping Cabotage Act, 2003 states that to participate in the Cabotage trade a vessel must be registered under one of the following categories;
WHOLLY NIGERIAN OWNED: Documents required are:
Relevant Cabotage application forms
Certificate of Nigerian Registry
Detailed crew list
Certificate of minimum safe manning
Evidence of registration of company with NIMASA
Certified true copies of form CAC 2 and CAC 7,
JOINT VENTURE VESSEL: Documents required are;

Relevant Cabotage application forms
Certificate of Registry
Detailed crew list
Certificate of minimum safe manning
Evidence of registration of company with NIMASA
Certified true copy of form CAC 2 and CAC 3
Joint venture agreement
Certificate of incorporation
Memorandum and article of association
Current tax clearance certificate
BARE BOAT CHARTER VESSEL: Documents required are:
Relevant Cabotage application forms
Certificate of Registry
Detailed crew list
Certificate of minimum safe manning
Charter-party agreement
Memorandum and article of association
Certificate of incorporation
Current tax clearance certificate
Certified true copy from CAC2, CAC7
Evidence of registration of company with NIMASA
FOREIGN-OWNED (as classified in the three groups viz 1, 2, 3 Ref: Pg. 28-31 of the Cabotage Implementation Guidelines based on gross tonnage.): Documents required are:
Relevant Cabotage application forms
Certificate of Registry
Detailed crew list
Certificate of minimum safe manning
Customs TI
Memorandum and Article of Association
Certificate of Incorporation
Current tax clearance certificate
Certified true copy of form CAC2 and CAC3
CABOTAGE LICENCE FOR FOREIGN VESSELS: Documents required are:
Application form
Copy of certificate of registry
Declaration of ownership certificate
Completed crew declaration form
Cabotage licence
Certificate of tonnage measurement
Passenger ship safety certificate
Cargo ship safety certificate
Ship safety equipment certificate
Certificate of minimum safe manning
International safety management certificate
Load line certificate
Survey certificate
Safety radio certificate
Classification certificate
Copy of current certificate of vessel insurance
Certificate of incorporation
Memorandum and article of association
Certified true copy (CTC) of forms CAC7 and CAC2
Current tax clearance certificate
Evidence of registration of shipping company with NIMASA
Proof of payment of registration fees
Undertaking to train a prescribed number of Nigerian cadets.
REQUIREMENTS FOR RENEWAL OF WAIVERS
Formal Letter of Application by owner or authorized representative
Completed Cabotage Waiver application Forms on oath in a Federal High Court
Cabotage Affidavit Form
Foreign Certificate of Registry FOR FOREIGN Vessels, Nigerian Ship Registry Certificate for Joint Venture, Bareboat and Wholly Nigerian Owned category. 
Detailed Crew List duly signed and stamped by the Master
Minimum Safe Manning Certificate
Certificate of Incorporation
Memorandum and Articles of Association
CAC 2 & CAC 7 for Wholly Nigerian Owned Vessel(s), specifying a share capital of not less than N25Million
  10.CAC 2 & CAC 3 for Joint Venture/Bareboat/Foreign Vessel(s), specifying a share capital of N25Million
10. Current Tax Clearance Certificate
Evidence of registration as a Shipping Company with NIMASA
Evidence of 2% Surcharge payment
Evidence of Nigerian Cadet Training
Evidence of Dry-Docking (If applicable)
Copy of Survey Report for newly imported Vessels
Joint Venture agreement for joint Venture application only.
Bareboat Charter agreement for Bareboat charter specifying a period of five (5) years and above
Bill of sale or evidence of ownership for wholly Nigerian owned vessels or Nigeria Ship registry Certificate
Completed Maritime Labour Declaration Form
REQUIREMENTS FOR THE PROCESSING OF 2% SURCHARGE  ON CONTRACT PERFORMED: 
Charter party agreement (CPA)
Invoices on contracts performed
Cargo Manifest and Bill of Lading for billing on Coastal Product Tankers
Self assessment (above applicable)
CHECKLIST OF DOCUMENTS EXPECTED ON-BOARD A COASTAL VESSEL:
Vessel Log Book
Vessel Port of Call
Vessel Particulars (registry certificates, Safety Equipment Certificates, Safe manning Certificates, Builders certificate, Load line Certificates, Tonnage Certificates, Radio Certificate, Insurance Certificates, Classification Certificates, Passenger Ship Safety Certificate, Survey Certificate, Cargo Ship Safety Certificate.
Waiver Certificate/ Receipts
FUNCTIONS OF CABOTAGE DEPARTMENT
The Cabotage Department is under the headship of a Director who oversees and co-ordinates the overall activities of the two main sub-divisions in the Department.  
The Department is charged with the responsibility of implementing the Coastal and Inland Shipping (Cabotage) Act 2003.  In pursuit of this objective the Department performs two important and crucial functions in the Agency.  Firstly ensuring Cabotage compliance on the part of all operators in the trade and secondly, generation of revenue through payment of 2% surcharge on contract sum as well as fines, etc.
These key functions naturally placed the Department into two broad sub-visions thus Cabotage Vessel Financing Fund (CVFF) and Trade and Development (T&D) while other important functions being carried out by the Department includes:-
Collaborating with relevant Government Agencies on effective implementation of the Cabotage Regime; 
Application of Guidelines and Regulations in liaison with other Departments/Units of the Agency to ensure seamless procedures and processes;
Promotion of cabotage trade towards ensuring awareness, enlightenment and sensitization amongst stakeholders;    
Updating of database on the cabotage operational activities; 
Identification of existing facilities (Jetties, Terminals, Platforms, Rigs, Ship/yards);
Facilitate capacity Building and Development for staff and stakeholders on cabotage related issues;
Ensuring that all vessels that engage in coastal shipping in Nigeria are built in Nigeria, owned by Nigerians, manned by Nigerians and registered in Nigeria;
Where a vessel is needed in Nigeria but does not meet any of the above requirements, the Department is to process a waiver application from the charterer on the particular requirement they are seeking to be waived and ensure that no indigenous capacity is available in that area before recommending to the Honourable Minister of Transport for approval;
In carrying out these functions, the Department is to ensure that the Oil and Gas Industry which is the mainstay of the Nigerian economy and provides over 80% of the cabotage trade business, is not destabilized;
Collection of 2% of the gross contract sum performed by all cabotage vessels in Nigeria, for the Cabotage Vessel Financing Fund.  This Fund is meant to be used to help indigenous operators acquire vessels to gradually take-over fully from the foreign operators;
Disbursement of the CVFF to qualified indigenous companies for tonnage capacity building
CABOTAGE VESSEL FINANCING FUND (CVFF) PROCEDURES/REQUIREMENT FOR APPLICATIONS
The underlisted are required by the applicants seeking for CVFF loan:
Section 3.2 of the CVFF Guidelines specifically states that only Nigerian citizens and shipping companies wholly owned by Nigerian citizens as defined by the Act shall be eligible to apply and benefit from the scheme.
To qualify for loan or guarantee under the scheme, in addition to any other requirements set out in the fund or NIMASA, an applicant shall: 
(a)  Prepare suitable feasibility reports which shall be subject to independent verification by NIMASA and the PLIs;
(b)  Pay all registration fees, e.g. registration as a shipping company with NIMASA Cabotage registration etc, and Nigerian flag;
(c)  Provide acceptable equity participation as required for each project application;
(d)  Satisfactory managerial and operational ability;
(e)  Agree with the Primary Lending Institution (PLIs) in the involvement in the loan requested
(f)  Provide acceptable security/collateral.
(g) Provide other requirements the fund may demand. 
The applications should include and not limited to:
Name of company
Address of company/E-mail
Year of incorporation/registration number
Amount and tenure of loan
Number/type/size of vessel to be procured
Other cabotage investment(specify)
Company share capital
Level of maritime activities
Number of vessels owned
Existing contract with international oil companies if any
Benefits of investment to Nigerian cabotage regime 
Maximum of  USD25m 
Indicate preferred PLIs (Bank) 
Diamond 
Fidelity 
Skye 
Sterling
Ten copies of applications forwarded to be submitted to the office of the Director General, Nigerian Maritime Administration & Safety Agency 4, Burma Road Apapa, Lagos.
TRADE AND DEVELOPMENT UNIT
ENFORCEMENT/DETENTION: Documents required for the release of a detained vessel are:
Letter of undertaking by defaulting owner/operator to comply with the Cabotage Act
Receipt of payment for relevant waiver fees and 2% surcharge
Release order
3. 2% ANALYSIS UNIT

4. FINANCE UNIT
PAYMENT PROCEDURE:

Step 1:  Collect Demand/Debit Note and Draft from Cabotage Department
Step 2:  Collect and complete a PAF from Financial Services Department (it should be checked, stamped and registered)
Step 3:  Make payment to designated bank
Step 4:  Present evidence of payment from the bank to Financial Services department and obtain a receipt on confirmation of payment from the bank.

FREQUENTLY ASKED QUESTIONS
WHAT ARE CABOTAGE VESSELS?
ANSWER:
 Passenger Vessels
Crew Boats
Bunkering Vessels
Fishing Trawlers
Barges
Off-shore Service Vessels
Tugs
Anchor Handling Tugs And Supply Vessels
Floating Petroleum Storage FPSOs & FSOs
Tankers
Carriers
Any other craft or vessel for the carriage on, through or under Nigerian waters of persons, property or any substance whatsoever.

WHAT ARE THE DIFFERENT TYPES OF VESSELS REGISTRATION AND PARTICIPATION IN CABOTAGE?
ANSWER:
NIGERIAN WHOLLY OWNED VESSELS
BAREBOAT CHATERED VESSELS
JOINT VENTURE OWNED VESSELS
FULLY FOREIGN OWNED VESSELS
EXEMPTED VESSELS
WHAT VESSELS ARE EXEMPTED UNDER THE CABOTAGE ACT?
ANSWER:
Vessels engaged in salvage operations for the purpose of rendering assistance to persons or aircraft in danger or distress. This does not require any prior approval from the Minister of Transportation.
Vessels engaged in commercial salvage operations provided the Minister is satisfied that the operation is beyond the capability of wholly Nigerian owned salvage vessels. This is intended to cover salvage contracts that have no emergency considerations or immediate danger to life and property.
Vessels owned and operated by Nigerian Armed Forces and Government paramilitary Agencies.
Vessels owned and operated by Nigerian Customs Services.
Vessels owned and operated by the Nigerian Police Force.

Vessels owned and operated by the Federal or State Ministries and or their Agencies provided the vessels do not engage in commercial activities.
Vessels engaged with the approval of the Minister of Transportation or any other Government agency in marine pollution emergency.
Vessels engaged in oceanographic research with the approval of the department of Fisheries or the Ministry of Foreign Affairs.
WHAT ARE CABOTAGE TRADE AREAS?
ANSWER:
NIGERIAN INLAND WATERS AND LAKES
NIGERIAN COASTAL WATERS
NIGERIAN TERRITORIAL WATERS
NIGERIA’S EXCLUSIVE ECONOMIC ZONE
ISLANDS (NATURAL/ARTIFICIAL) WITHIN NIGERIAN WATERS – PLATFORMS, RIGS, FLOATING WORKSHOPS AND OTHER SUCH STRUCTURES AND
ANY CARRIAGE IN, UNDER, OR ON NIGERIAN WATERS

 


WHAT ARE THE FOUR PILLARS OF CABOTAGE?
ANSWER:
REGISTRATION
OWNERSHIP
BUILDING
MANNING
FREQUENTLY ASKED QUESTIONS ON THE CABOTAGE VESSEL FINANCING FUND (CVFF)
1.  Question: How can I apply for CVFF Loan?
Answer: You can apply by writing an application to access the loan to the Director-General of NIMASA, attention Director, Cabotage Services.  Including in your application, the following information with back-up documents as applicable:
Name of Company.
Address of Company.
Year of Incorporation/Registration Number.
Amount and tenure of loan
Number/Type/Size of vessel to be procured (Purpose).
Evidence of other Cabotage investments e.g. Building or Repair of Shipyards, Establishment of Maritime Academy etc (Please specify).
Company’s Share Capital.
Degree of maritime activity.
Number of vessels presently owned.
Contract(s) with International Oil Company, if any.
Benefits of investment to Nigerian Cabotage Regime.
Indicate preferred PLI if any.
Applications are forwarded to PLIs who after due diligence present a list of qualified applicants to NIMASA which in turn presents to the Honourable Minister of Transport for approval.
2. Question: What is PLI?
Answer: PLI is acronym for Primary Lending Institutions.  These are commercial banks accredited to the CVFF.  They contribute 50% of the total Fund, provide an irrevocable and unconditional guarantee of NIMASA 50% contribution to the Fund and manages the Fund while NIMASA provides Fund Administration and Fund Corporate governance.  FMOT is the 3rd party to the Fund and has oversight functions while the obligor (i.e. an applicant that has accessed the Fund) is the 4th party.  This arrangement ensures that the Fund is managed purely as a commercial facility to ensure success of the Fund for growth of Cabotage trade in the Country. 
3. Question: What is the maximum amount applicable?
Answer: Not more than 25M U.S. Dollars.
4. Question: who are the PLIs?
Answer: Fidelity Bank, Skye Bank, Sterling Bank, and Diamond Bank.
5. Question: What is the eligibility of applicants to the Fund?
Answer: 
Full and complete compliance with Cabotage Act and the CVFF Guidelines (Ensure that you collect a copy of each from Cabotage Department of NIMASA and study them carefully).
Domiciliation of Company’s Account with PLI of your choice.
Full condition Survey Report on vessel to be procured, (for existing vessels) .
Legal Mortgage on vessel to be procured.
Comprehensive Insurance of procured vessel.
Vessels must be built in Nigeria or has waivers. 
Company must be owned by Nigerians or have atleast 60% Nigerian Joint Venture participation.
Vessels must be manned by Nigerians or has Waivers.
Registered under the Cabotage Special Register of Nigerian Ship registration Office in NIMASA.
Must be Nigerian flagged.
Payment of Cabotage dues (2% Surcharge, License and waiver fees, fines).
Existing contract with International oil Company(ies) (This is a deciderator).
Positive cash flow analysis by PLIs
Prepare bankable feasibility reports which report shall be subject to independent verification by NIMASA and the PLIs.
Availability of Company’s succession plan.
Must meet with other key Risk Acceptance criteria of PLIs namely:
Competent and developed firm of Directors.
Cognate Business Experience.
Good track Record
Comprehensive Company structure.
Provide other requirements as the Fund may demand. 
6. Question: What is the tenure of CVFF loans?
Answer: Maximum of Seven (7) Years.
7. Question: Must the vessels to be procured be brand new?
Answer: The general principle in ship market is that the vessels should be serviceable so age is not paramount.  However, the vessel under consideration must not be more than 10 years old, and these may involve reconstructed or reconditioned vessels.
8.      Question: What is the interest rate Applicable?
Answer: The CVFF to be disbursed in US Dollars to beneficiaries on a single digit interest rate of 5.6%, 0.25% processing fee.
9. Question: Can the CVFF be accessed in the case of 
refinancing an existing loan? 
Answer: a) In the case of refinancing, it shall be restricted to 80% of the original cost of the equipment/vessel being refinanced or its market realizable values whichever is lower.
 b) The tenor of date of acquisition from the date of the refinancing request should not exceed twelve (12) calendar months.
10. Question: What is the purpose of the Fund?
Answer: a) The facilitation of the acquisition and ownership of vessels to be employed in the domestic/coastal trade by indigenous Companies and Nigerian citizens.
 b) Facilitation of vessel Charters.
 c) The development of shipyard/maritime infrastructure to facilitate vessel construction, repairs and maintenance.
 d) Other shipping auxiliary projects relating to the development of local tonnage capacity and shipyards.

Facebook

Latest Tweets

Contact Us