Kenyan importers and exporters will soon be compelled to identify the individuals or companies sending or receiving packages from around the world. More than 19 government agencies are involved in the drafting of a Bill aimed at cutting illegal transactions and bringing transparency into the shipping industry and which will also require banks and other financial institutions to identify who is sending and receiving money and to assess the risk that the transaction might be used for illegal purposes. The draft is expected to be presented to Parliament for enactment before the end of this year. The law, commonly known as "Know Your Customer," once adopted, will be aligned with the East Africa Protocol on the Prevention and Combating Corruption and Illegal Trade. The government agencies involved are led by the Ministry of Interior, with Treasury and Judiciary having endorsed its proposal, saying it will help in the fight against money laundering and shipments of fake drugs, narcotics, weapons and wildlife parts to, from or through the country. Last week, Interior Cabinet Secretary Fred Matiang’i, Central Bank of Kenya Governor Patrick Njoroge and the director of Public Prosecutions Noordin Haji led other agencies in high level conference of senior government officials in Mombasa where they endorsed the proposed law. "The criminal activities we experience in our financial institution linked to illegal freight trade has damaged and endangered Kenya's economy. In future, banks will have to adopt the ‘‘’Know Your Customer,’ scheme before any transaction is completed but at the same...

Private sector players are looking to capitalise on trade with the US as the country works towards a bilateral trade deal with the first-world country. The Kenya Private Sector Alliance (KEPSA) in partnership with the Corporate Council on Africa (CCA) yesterday hosted a roundtable discussion with business leaders and state officials from both nations. The forum was aimed at exploring ways in which the private sector can take full advantage of investment and trade opportunities that will arise from a Kenya-U.S. Free Trade Agreement. "It is an opportunity for the private sectors of both the U.S. and Kenya to deepen trade and investment ties in key sectors from energy to banking, construction, ICT/digital trade, health, manufacturing and services trade," CCA president and CEO Florizelle Liser said yesterday. This follows President Uhuru Kenyatta’s visit to the US where he and his counterpart POTUS Donald Trump announced the commencement of talks aimed at establishing a trade pact between the two Nations. During the forum, Kepsa CEO Carole Kariuki noted the proposed trade deal provided Kenya an opportunity to do better in terms of increasing exports to the US. She added that a FTA between Kenya and the USA would inadvertently lead to growth of businesses in the country, boosting the local economy. “Kenya should draw lessons from Morocco on the challenges and opportunities that are emerging with the free trade agreement between them and the US in order to learn and eventually do better,” she said. Currently, trade between Kenya and the...

Imagine a situation where Kenya is trading with the whole world, producing world-class products and enriching its citizens; consumers enjoying cheaper products, and exporters exploiting expanded opportunities. Away from dreamland, I believe a more open Kenya is indeed possible. According to the World Bank, there have been 15 economies over the last 50 years that managed to grow at the rate of 7 percent a year for more than 15 years. In doing so, they were able to move vast numbers of their citizens out of poverty. These countries have a few things in common, one of them is that they have embraced the world economy through trade. Allowing free trade policies encourages international firms to invest. But in order to encourage free trade, you need efficient ports (and airports). Today, Asia is home to the top nine most efficient ports in the world. The most active ports are Shanghai and Singapore, which have an annual throughput of more than 30 million containers. Rotterdam is the only non-Asian port in the top 10, but far behind, with a throughput of 12 million containers. No one would have predicted such a scenario 20 years ago. Methinks this is the route that Africa, and Kenya in particular, should take to develop economically. Mombasa would be a natural candidate, but there is a whole lot of catching up to do. Mombasa is a congested port despite the small annual volume of 770,800 containers it handles. Kenya’s exports in comparison with global export trade...

Cargo handled at the Inland Container Deport-Nairobi(ICDN) grew 62.4 percent in 2019, latest data show, buoyed by high train turnaround on the Standard Gauge Railway and improved port efficiency. The ICDN operations performance report shows a total of 418,830 twenty-foot equivalent units (TEUS) were handled in the year to December, 160,858 TEUs more than the 257,972 TEUs handled in 2018. “This has been achieved as a result of improved efficiency along the logistics chain from Mombasa to ICDN,” Nairobi ICD manager Peter Masinde told the Star. According to KPA, logistic improvement was realised mainly on modernized cargo handling capacity, growing rail freight services and reduced cargo dwell-time. “This especially after head of public service circular of June, 2019 aligning government agencies involved in cargo clearance process,” Masinde says. Highest volume was recorded in July-39,817 TEUs with the least being March when 30,958 TEUs were handled. Imports registered 262,895 TEUs during the year under review compared to 177,652 TEUs realized in the previous year. This translated to an increase by 85,243 TEUS or 48 percent, indicating Kenyans imported more last year compared to 2018. Exports also grew slightly by 17.7 percent or 2,076 TEUs to close at 13,777 TEUs compared to 11,701 TEUs in 2018, meaning the country grew its exports which are key in the balance of trade. “Export (Empty) traffic registered 142,158 TEUs in 2019 compared to 68,619 TEUs realized in 2019, which is an increase by 73,539 TEUS or 107.2 percent,” the report states. In 2019 imports accounted for...

The Ministry of East African Community and Regional Development has rolled out a training programme targeting women involved in cross border trade to enhance their capacity to benefit from the EAC integration process. The training will mainly target women traders in border counties on the simplified guidelines to EAC trade rules and regulations. The Ministry is targeting 50,000 women traders from border counties such as Kisumu, Siaya, Migori, Busia and Homa Bay to sensitize them about rules and regulations on EAC trade. East Africa Community Principal Secretary Dr. Kevit Desai says the government is keen to ensure that the traders reap maximum benefits. Speaking in Kisumu during the launch of the training, the PS said access to information regarding the goods and services allowed for trade in each partner state, the standards and authorization certifications required and taxes and tariffs applicable posed a big challenge to cross border women traders. To address the challenge, the ministry in partnership with the International Labour Organization, has embarked on development of a simplified guide to EAC trade rules, regulations and Procedures. The trained traders are expected to conduct peer-to-peer grassroots training to ensure those who did not get an opportunity to attend the workshop are sensitized. Source: KBC Channel

Businesses are rooting for capping of the common external tariff at 32.5 percent by East African Community member states. East African Business Council’s CEO Peter Mathuki says the new tariff would be presented during the forthcoming EAC member states summit slated for later this month for ratification. The meeting is also expected to deliberate on admission of the Democratic Republic of Congo and Ethiopia, who have expressed interest to join the trading bloc. However, businesses from EAC member states say they have brokered a deal to cap common external tariff at 32.5% with the proposal expected to be presented during the forthcoming EAC summit in Arusha slated for later this month in efforts to harmonize the tax regime in the trading bloc. The council has called on the member states to expedite in establishing a single regional air space and one network area to further lower the cost of doing business in the region. The proposal by the Democratic Republic of Congo and Ethiopia to join the East African Community trading bloc is at an advanced stage. The forthcoming summit is also expected to handle trade issues between member states. Source: KBC Channel

Importers in East Africa will from July operate under a common Customs bond, which guarantees uniform import duties and taxes across all partner states. Currently, the value of Customs bonds varies from country to country because of the application of different duty rates, valuation and sensitivity of goods. Kenya requires importers of transit goods to secure a Customs bond issued by an insurance company, while delicate or sensitive cargo requires a bank or cash guarantee. In Uganda and Rwanda, the Customs bond is issued by an insurance company with rates based on the taxes charged by the destination country. According to the East Africa Community Single Custom Territory Monitoring and Evaluation Committee, the common Customs bond will reduce the cost of doing business and goods turnaround time. This common Customs bond is expected to be adopted during the Council of Ministers in July as part of the pillar to create a Customs Union. It is meant to create a level playing field for the region's producers by imposing uniform competition laws, Customs procedures and external tariffs on goods imported from countries outside the EAC. The Monitoring and Evaluation Committee met in Mombasa, Kenya to discuss how to tackle the remaining trade barriers. They agreed that enhancing integration of Customs and port functions will ease the seamless exchange of information among partner states. To secure cargo movement in the region, the revenue commissioners from Kenya, Rwanda, Burundi, Tanzania and Uganda, who were in attendance, said they were already implementing cargo tracking...

By GITONGA MARETE SUMMARY The checks, which will be stationed strategically along highways leading to neighbouring countries, will complement existing border crossing points. Plans are under way to establish control checks at designated points across the country in a move expected to contain proliferation of contraband and substandard goods, improve security and check on illegal immigrants. The checks, which will be stationed strategically along highways leading to neighbouring countries, will complement existing border crossing points. At least 13 stations will be built in Wajir, Garissa, Malindi (Kilifi county), Lungalunga (Kwale), Archers Post (Isiolo), Taveta, Oloitoktok, Namanga, Isebania, Busia, Malaba, Lake Baringo and Marich Pass (north of Kitale). Some of the check points are more than 400km from border posts. Known as Inland Border Control Checks (IBCCs), the stations will have structures similar to those at the border points with people and goods entering into the country expected to go through thorough screening. The decision to establish the stations was informed by continued entry of substandard and contraband goods into the country despite existence of the gazetted border points due to porous borders. For instance, there are goods entering the country from Somalia, Ethiopia, Uganda and Tanzania that evade checks at designated border points. While traders smuggle electronic goods through the Somalia border, there have been concerns of dairy products coming into the country from Uganda. Grains enter into Kenya from Tanzania while traders smuggle an assortment of goods from Ethiopia including narcotics as well as illegal immigrants. Ethiopia’s case is...

By ANTHONY KITIMO A regional initiative aimed at easing cargo clearance in ports is gaining traction as more companies sign up to it. The implementation of the regional Authorised Economic Operators (AEO) programme conceived by the Commissioners of Customs of the East African (EAC) countries in 2016 gives preferential treatment to affiliated companies after meeting certain conditions. Last year, 43 more companies across the East Africa were accredited to AEO, bringing the number the total to 116, up from 73 in 2018. PN Mashru was one of the Kenyan companies that joined the group last year, and is banking on the move for growth. "The company applied through the Kenya Revenue Authority (KRA) and with slow transport business because of SGR, we expect to attract more business since AEO accredited companies have more advantages," said PN Mashru declaration officer Reuben Mwaluma. He said AEO accredited companies have preferential treatment in the management of customs operations which include automatic passing of declarations with no physical examination of goods. This reduces time taken to transport cargo. Such companies also have guaranteed renewal of customs licence, priority treatment in cargo clearance chain, and waiver of movement bond requirements. EAC commissioners of customs have been advocating for more companies, especially in transport sector, to join the programme with a target of 500 by 2022. “On AEO programme, the region has also been exploring the possibility of entering into Mutual Recognition Agreements (MRA) with the rest of the world to allow our traders enjoy benefits...

Following the announcement that Kenya and the US are in talks for the establishment of a Free Trade Agreement (FTA), Kenyan businesses are moving fast to map out unexploited opportunities in the world’s largest economy. The Kenya Private Sector Alliance (KEPSA) in partnership with the Corporate Council on Africa (CCA) has already held talks with Kenyan and U.S. business leaders and senior government officials to explore how the private sector can support this bilateral effort and take full advantage of investment and trade opportunities that will arise from a Kenya-U.S. Free Trade Agreement. This comes as a follow up to President Uhuru Kenyatta’s visit to the White House last week, where the U.S. and Kenyan Government announced talks that might make Kenya the second African country to have an FTA with America after Morocco. The launch of talks aimed at establishing an FTA between the two countries. If successful, it would be the first United States FTA with a sub-Saharan African nation and potentially a model the United States will use to enhance its trade and investment relationship with other African countries. US Ambassador to Kenya Kyle McCarter who spoke at the event expressed confidence that upon finalisation of the deal, the two countries will benefit from each other’s markets. “We look forward to working together to create a free-trade agreement that allows Kenyan and American businesses  to  benefit  from  increased  access  to  each  others’  markets  and  one   where both our consumers will enjoy greater prosperity through expanded choice and...