Anti-corruption officials probing Mombasa port vehicle syndicate

Some of the motor vehicles  impounded by the
Some of the motor vehicles impounded by the Kacc in the last five months as it investigates a car import syndicate at the Mombasa port. Photo/LABAN WALLOGA 

The Kenya Anti-Corruption Commission is investigating a car import syndicate in which clearing agents are allegedly colluding with tax collectors to allow unsuitable vehicles into the country through the Mombasa port.

An official at the graft watchdog who did not want to be named said the investigations were at the audit stage, with submission to the Attorney-General expected in a month. 

Kenya Revenue Authority (KRA), Kenya Bureau of Standards (Kebs) officials and clearing agents are allegedly colluding with unscrupulous car importers to bring into the country vehicles not allowed on the Kenyan roads.

They are also accused of aiding importers to defraud the government of revenue by undervaluing the cargo.

Vehicles imported through such scheme are sold to unsuspecting customers on the prevailing market value.

“Vehicles purchased at about Sh300,000 from the country of origin are sold in Kenya at Sh800,000 to Sh1.3 million” Nicholas Simani, principal public relations officer at the Kacc said.

Following a year-long undercover investigation by Kacc investigators based at the port, the commission unearthed a racket where used car dealers imported vehicles whose age exceeded eight years.

“As a result of this investigation, a total of 62 motor vehicles of different makes have been impounded by the Kacc in the last five months,” Simani said.

The impounded unroadworthy motor vehicles were valued at Sh50 million, Simani said.

It is suspected that some vehicles that have been sold through showrooms are already on the roads after being released earlier, undetected.

All the imported vehicles must conform to the Kebs regulation KS 1515, the Kenya standard code of practice for inspection of road vehicles.

This regulation requires imported vehicles to be right-hand drives and used motor vehicles to be less than eight years old from the year of the first registration.

The regulation also requires that all vehicles be accompanied by the certificates of worthiness issued at the source by an authorised agent.

Unscrupulous importers are, however, going around these rules in collusion with KRA and Kebs officials to release the vehicles not conforming with these standards, Kacc says.

“The commission, together with Kenya Police Vehicle Inspection Branch and other motor vehicle manufacturers has confirmed that the impounded vehicles did not comply with the regulations,” Simani said.

The vehicles were intercepted before they exited the port after Kacc undercover investigators established that the dealers had forged import documents to evade tax.

“The tax evasion ranges from attempts at making false declarations to understating the quantity of goods in an attempt to pay lesser taxes,” Mr Simani said.

Kebs has appointed Japan Export Vehicle Inspection Company (JEVIC) to conduct pre-shipment inspections and issue certificate for imports from several countries, including Dubai, Britain, South Africa and Singapore.

All motor vehicle imports are inspected by Kebs and each should, among other things, have a certificate from JEVIC to establish inspection and clearance status.

Kebs is said to have access to the JEVIC database to validate all certificates issued by an agency on its behalf.

Although Kebs officers are supposed to validate the import documents as well as carry out physical verification of the motor vehicle imported to ensure conformity of the local standards, this is sometimes not done.

When Kacc first disclosed that cargo interveners were helping in defrauding the government mid this year, former Kebs managing director, Mr Kioko Man’geli, said the standards regulator would regularly rotate staff working at the port to ensure they did not get into the corrupt system.

Clearing and forwarding agents, importers and Container Freight Station (CFS) operators are also implicated in the syndicate.

The commission has also been able to detect over 120 custom entries bearing a total of 266 containers of various goods, in which importers were trying to evade tax during the last three years, Simani said.

The commission has also been able to detect 80 containers of imports that were regularly released at the Kilindini port and various Container Freight Stations after collusion between Kebs and KRA and clearing agents,” he said