A shippers lobby has taken the government to court over a new rule that bestows on the Kenya Ports Authority (KPA) the sole mandate of determining which freight containers would be held at the various container freight stations (CFSs) awaiting shipment. The Container Freight Station Association (CFSA) filed an injunction on January 22, claiming its members were not consulted on the plans. “Shippers have basic rights of operation and where to put their cargo is one of them. This directive seizes rights of importers,” Daniel Nzeki, the chief executive at CFSA said.

Currently, importers and exporters are free to nominate their preferred CFSs prior to submission of import manifest to the Kenya Revenue Authority (KRA). Cargo not nominated by shippers is nominated by KPA and shipping agents are not mandated to nominate containerised cargo to CFSs. This arrangement is likely to change as the government hands powers to KPA to route cargo consignments to CFSs of its choice. “The KYOTO convention which Kenya is a signatory gives all authority in regard to cargo on the importer; the importer, therefore, decides the final clearance point of cargo,” William Ojonyo, managing director of Keynote Logistics said.

International trade

“It is, therefore, both illegal and uncalled to purport to give direction on an area whose jurisdiction lies with the importer in the international trade contract,” he added. The Treasury’s controversial directive aimed at curbing revenue leaks at such facilities was initially scheduled to kick off on December 1 but industry players petitioned Treasury secretary Henry Rotich for more time to clear pending transactions and change the shipment paperwork to conform to the new order. KPA managing director Gichiri Ndua said the new system will now start on March 1, handing the authority full rights to allocate containers to CFSs of its choice. “Following well-founded security, port congestion and tax leakage concerns, the government has directed that with effect from March 1, the KPA will have the sole mandate of nominating freight containers to designated CFSs,” he said in a notice to shippers.

“The KPA will subsequently process the nomination to the appointed gazette CFSs using an agreed and equitable criteria.” “All shippers, agents and shipping lines are, therefore, required to comply with this new government directive and ensure that shipping documents including manifests and bill of ladings are not endorsed to specific CFSs,” Mr Ndua said. The government is battling to seal revenue leaks in cargo handling amid claims that some industry players were colluding with importers to dodge duty at a time when the KRA is under pressure to improve its collection. Tax revenues have fallen below targets in the first three months of the fiscal year from July 2015, plunging the Treasury into a cash crisis that has disrupted budget plans.

Source: Business Daily

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