What issues should be paid attention to when exporting to Kenya? in English

Exporting to Kenya - Key considerations?

Kenya is located in eastern Africa and is one of the countries in sub-Saharan Africa with a relatively good economic foundation. Its main exports include tea, flowers, coffee, cement, sisal, pyrethrum, soda ash, leather, meat, and petroleum products, while its imports include machinery, steel, vehicles, fertilizers, and pharmaceuticals. China is Kenya’s largest source of imports, with its main export categories including: ① electrical and electronic equipment and their accessories; ② non-knitted clothing; ③ boiler machinery; ④ knitted clothing; ⑤ steel products; ⑥ furniture; ⑦ plastics and their products; ⑧ footwear, leggings, and similar items and their parts; ⑨ vehicles and their parts, except railway vehicles; ⑩ steel.

1. Customs clearance document requirements

1) Commercial invoice

The Kenyan customs can accept copies of two general commercial delivery notes with the carrier as the letterhead in English. The delivery note must include sufficient information to ensure customs declaration. The delivery note must specify the quantity of goods, the country of origin, the market price of the goods in the country of origin, the grade and value of the goods, the import permit number, the additional packaging fees, the insurance fees, the import permit number, and be written into the delivery note. It is worth noting that all documents related to goods destined for Kenya must be measured in metric units of weight and other indicators.

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2) Bill of lading

The ocean bill of lading generally should indicate the shipowner’s name, the consignee’s name, address, port of destination, a description of the goods, a list of freight and other charges, the complete number of the bill of lading, and the date and signature of the carrier’s issued cargo receipt.

All of these contents should be consistent with the relevant contents on the invoice and packaging to ensure timely settlement. The document has two copies, one for paying customs duties and the other for foreign currency exchange. When using air transportation, use the air waybill instead of the ocean waybill.

If the bill of lading cannot be sent in time, electronic release can be applied for.

3) Customs valuation sheet

Three copies of the customs valuation sheet are required. The document should include a complete and comprehensive catalog and description of the goods, the country of shipment, the mode of transportation, the names and addresses of the buyer and seller, the off-shore price, the on-shore price and the freight. The customs valuation sheet is usually filled in by the importer and then confirmed and endorsed by the Kenyan customs.

4) Health and health certificate

Imported animals are subject to quarantine regulations and can only enter designated ports. Each imported animal must have a certificate issued by a qualified veterinarian certifying that it was disease-free at the time of export. When importing plant branches and seeds, an import license issued by the Ministry of Agriculture is required. When importing used clothing, a certificate must be issued stating that the clothing is free from bacterial contamination.

5) Other requirements

①Imported denatured spirits require a special certificate from the supplier.

②Consular authentication requirements: a “statement of intended use” in both Chinese and English must be provided.

③The Kenyan government stipulates that all goods exported to Kenya must be insured by a Kenyan insurance company and do not accept CIF terms.

④One copy of the marine insurance policy, one copy of the PVoC certification, one copy of the foreign-made power of attorney, one copy of the contract, and no wooden packaging certificate or fumigation certificate, etc.

2. PVoC certification related

1) Government regulations

① According to Chapter 496 of the “Kenya Standards Act” and the “No. 78 Imported Product Quality Regulations” issued in July 2005, in order to ensure the quality of imported products and provide safety, health, and environmental protection for Kenyan consumers, the Kenya Bureau of Standards (KEBS) began implementing the Pre-Export Verification of Conformity (PVOC) program on September 29, 2005. Products in the PVOC catalog must obtain a Certificate of Conformity (COC) before shipment and provide it to Kenyan customs upon arrival, otherwise they will not be allowed to enter the country. If there is no COC, KEBS may decide to inspect the batch of goods and impose fines. In addition, importers need to apply for an Import Declaration Form (IDF) or an import license in Kenya before applying for PVOC verification. Domestic exporters should apply for inspection from an inspection company according to the IDF number.

② The Kenya Bureau of Standards (KEBS) had previously issued a notice that within three years from June 23, 2022, the Pre-Export Verification of Conformity (PVoC) service for (general goods) exports (to Kenya) will be authorized to the following five inspection companies:

·China Certification & Inspection Group Company Ltd

·China Hansom Inspection & Certificate Co. Ltd

·Societe Generale de Surveillance (SGS)

·TUV Austria Turk

·World Standardization Certification & Testing Group (Shenzhen) Co. Ltd

The regions/countries that the above five authorized inspection companies are responsible for have been listed in the (general goods) Pre-Export Verification of Conformity (PVoC) manual and on our official website xxx_-?/._kwc.

Starting from July 1, 2022, all goods shipped (exported to Kenya) should be accompanied by a Certificate of Conformity (CoC) issued by any of the above authorized inspection companies when they are shipped from the country of export; otherwise, they will be subject to destination inspection (Destination Inspection) upon arrival in Kenya. The fee for this is 5% of the customs value approved by Kenya’s No. 78 (2020) legal notice.

Actually, if the exporting country does not have a designated/authorized inspection company by the Kenya Bureau of Standards (KEBS), the consigned goods should undergo Destination Inspection – the fee standard is 0.6% of the declared customs value, with a minimum fee of $265 and a maximum fee of $2,700, plus testing fees (if applicable).

2) PVOC Certification Application Process

Step 1: The importer applies for an IDF (Import Declaration Form) inspection number locally in Kenya and submits it to the exporter.

Step 2: The exporter provides the packing list, proforma invoice, IDF, and inspection report.

Step 3: After the data is reviewed and approved, the inspection notice is obtained and the inspection company arranges a cargo inspection date.

Step 4: During the on-site inspection of the goods, the exporter should pay attention to the labeling requirements of the products and their external packaging, and the declared quantity and amount should remain consistent.

Step 5: After the goods are inspected, the exporter submits the final packing list and invoice to the inspection company.

Step 6: The inspection company issues the Kenya PVOC certificate based on the final packing list and invoice.

3) Required Materials for PVOC Certification

①Packing List

②Proforma Invoice

③IDF: Import permit, obtained by the importer in the importing country, and provided to the exporter to apply for PVOC.

④Product testing report: If there is already an available third-party testing report, there is no need to repeat the test, except for sample testing.

⑤PVOC application form: Blank application forms are provided by the processing agency.

4) PVOC Inspection Notes

①Different products have different labeling requirements, mainly for labeling and marking. After the exporter submits the product testing report, packing list, invoice, IDF, and PVOC application form, the issuing agency reviews the documents and provides the corresponding labeling requirements for different products to the exporter to prepare for the inspection.

② The quantity of the product cannot exceed the quantity filled out during the declaration, and the amount cannot exceed the amount declared.

3. Import Tariffs

1) Kenya’s import tariff rates range from 0% to 40%. Tax reductions are available for products imported for the production of export goods. Exporters of horticultural and agricultural products are exempt from paying import tariffs and value-added tax. All fees and tariffs can be paid in Kenyan shillings, and the official exchange rate is generally used. For most imported goods, Kenya imposes an additional tax of 10%, and for sugar, beets, spirits, cigarettes, tobacco, wine, mineral water, biscuits, soap, silk textiles, large vehicles, loading and unloading equipment, paint, enamel, and porcelain, a consumption tax is also imposed. Samples and advertising materials are exempt from import taxes.

2) Generally, about two days before the goods arrive at the port, the shipping company will submit the cargo manifest to the Kenya Revenue Authority (KRA) (through the Simba Tradex system) and the Kenya Ports Authority (KPA) (through the KWATOS system), and generate a specific MANIFEST number. After confirming the MANIFEST information, the clearance personnel can enter the CUSTOMS ENTRY and import declaration and tariff estimate (online) in the Simba system, and notify customers to pay the corresponding taxes and fees in a timely and sufficient manner.

3) Starting from July 1, 2022, the East African Community will officially implement the decision of the fourth tier of the Common External Tariff (CET), which is 35%, and the planned products to be included are:

Dairy products, meat products, grains, edible oils, beverages and alcohol, sugar and candy, fruits, nuts, coffee, tea, flowers, seasonings, furniture, leather goods, cotton textiles, clothing, steel products, and ceramic products, etc.

Currently, the Common External Tariff (CET) tax rates in the East African Community are divided into three tiers: 25% for consumer goods, 10% for intermediate goods, and 0% for raw materials and capital goods. The original intention was to protect local manufacturing from competition from cheap imports.

4) For all parcels imported into Kenya, if the declared value on the electronic waybill or the pre-clearance declaration value does not match the declared value on the invoice, the customs will use the waybill declared value as the basis for taxation.

This discrepancy may be due to customer writing errors or manually modifying and printing the waybill declared price, resulting in a discrepancy between the waybill and the invoice declared values.

If the waybill and invoice declared prices are not consistent due to the above reasons, regardless of whether the declared value displayed on the invoice is correct, the customs document will use the declared value filled in by the waybill creator as the basis for taxation, even if the waybill declared value is wrong.

Because the Kenyan customs use the waybill declared value and the pre-clearance declared value as the declared value, if the waybill declared value is higher than the invoice value, the importer (or the sender in the case of DTP trade terms) will have to bear higher tariffs and value-added tax. If the waybill declared value is under-declared, the customs will regard such behavior as false reporting and impose a fine.

4. Import control

1) Kenya implements an import license system. Importers must obtain an import license or foreign exchange allocation license jointly issued by the Ministry of Commerce and the Central Bank for import. To protect national industries, Kenya categorizes imported goods into four categories:

· The most preferred imports include drugs, raw materials, spare parts, agricultural materials, and important equipment. Licenses are automatically issued for materials needed for exported goods.

·Secondary priority imports, the issuance of permits depends on the foreign exchange reserve situation. If there is sufficient foreign exchange, it can be imported as a top priority.

·Approval from the competent department is required before issuing permits.

·For domestically producible goods, substitute products, luxury goods, etc., the issuance of permits is strictly controlled. In addition, the validity period of the permit should be studied according to the nature of the goods. The validity period of the permit is 6 months or 3 months, and it can be applied for extension once if it expires.

2) Goods that require approval before import include: postage meters, hunting equipment, unwrought precious metals or gemstones, weapons and ammunition, substances that destroy the ozone layer, genetically modified products, bones, horns, ivory, etc.

3) Prohibited items for import include: counterfeit currency notes or coins, indecent or obscene articles, articles bearing the Kenyan emblem or the rank badges of subaltern officers without proper authorization, narcotic drugs, hazardous waste, all soaps and cosmetics containing mercury, used waste tires from light commercial and passenger vehicles, and all kinds of counterfeit goods.

5. Entry, storage, and transshipment

The entry procedures for goods for consumption, storage, shipping, or transshipment must be completed within the specified time after the ship arrives at the port. Goods that are not claimed at the port of entry will be transported to the customs warehouse 21 days after the start of unloading. If no one claims the goods after three months and has been advertised in the government gazette, the goods will be auctioned off. Goods entering Kenya for transshipment can be managed by customs until re-exported under protection contracts. Goods transported by ship can be directly transferred from the importing ship to another ship, or transshipment can be arranged within 21 days with the permission of appropriate customs officials. Imported goods transported by ship or under a contract can be re-exported directly from the customs warehouse without paying import duties. Customs duties on transshipment goods are only paid on the condition that the original amount will be refunded.

6. Nairobi Import Processing Zone

Kenya does not have a free trade zone, but it does have the Nairobi Export Processing Zone. The incentives promised by this processing zone to investors include exemption from all tariffs, value-added tax, sales tax, income tax, and 100% foreign ownership. For manufacturing and commercial purposes, the zone allows for the presence of information technology, brokers, and maintenance industries. Other export processing zones are being constructed in the southern part of Nairobi and the Mombasa region, and were completed in October 1998.

7. Risks in Kenya’s Foreign Trade

Fraudsters may impersonate well-known Kenyan or foreign companies (or their subsidiaries), establish intermediary companies in Kenya, and use their reputation and information to defraud others. They may forge documents, signatures, and employee identities, and sign false contracts. At the same time, high-risk payment methods are used in transactions. Taking advantage of the lack of knowledge of new markets and the eagerness of domestic export companies to expand their trade volume, they require the use of payment methods that have a greater seller risk, such as credit or open account (O/A) payment, and refuse to pay or even disappear after receiving the goods.

Exporters need to pay attention to the following:

① Avoid high-risk payment methods as much as possible, and use payment methods such as TT and letter of credit to reduce risks;

② Carefully choose trading partners, carefully screen foreign information, and obtain information about the other party’s credit status through multiple channels, including contacting the company headquarters by phone to verify the authenticity of the subsidiary and order information;

③ After the incident occurs, take appropriate measures to protect their own rights and interests, such as reporting the case to the International Criminal Police Organization in China in a timely manner, and dispatching personnel to the location of the goods for return or transfer, minimizing losses, and reflecting the situation to the competent department and embassy commerce office.

④ For normal overdue issues that are not fraudulent, you can contact Global Collection to intervene and handle them. Recover the payment as soon as possible with the help of professional collection agencies.

*The above content is compiled from the Internet for reference only. Due to changes in national policies and customs requirements, it is recommended to communicate with the importer in advance to confirm the details. The copyright belongs to the original author, and any infringement will be deleted upon request.

If a company encounters a situation where a Kenyan customer fails to pay the payment, and self-collection for more than three months is still unable to recover the arrears, it is recommended to entrust a professional third-party organization like Global Collection for collection. The business personnel of the professional organization are familiar with local judicial and commercial environments and relationship networks, have rich collection experience, and have multiple collection channels and a complete database. They can conduct a comprehensive analysis of the credit status and repayment ability of overseas enterprises, and formulate the most suitable collection plan based on the characteristics of the debtor. At the same time, the company can also focus on customers who pay bills on time.

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