What it means to inspect cargo at port of origin

Kenya has moved to seal loopholes in tax evasion and importation of substandard goods by directing that all consolidated cargo be inspected at the port of origin.

In a joint statement Kenya Revenue Authority (KRA) and Kenya Bureau of Standards (Kebs) said this would help establish the real value of individual cargo to be verified by Kebs-licensed inspection agencies who will then submit a copy of a product’s Certificate of Inspection (CoI) via their online portals to KRA’s Simba system ahead of shipping.

The notice issued last week, also directed clearance and forwarding firms involved in consolidation of cargo into single units for packing in containers to register with Kebs by April 20.

“Consolidated cargo will only be managed by registered consolidators who will liase with Kebs-licensed cargo inspectors across the world to have goods audited at the port of origin before packing into containers.

“No other inspection will be conducted upon arrival but handling of clearance via our online single window,” said Kebs Managing Director Charles Ongwae.

Prior to the directive only single importer goods placed in a container were inspected at source under regulations that established three types of clearance schedules — Route A, B and C — where inspecting firms issued importers with a Pre-Export Verification of Conformity (PVoC).

But Kebs-KRA directive on consolidated cargo will see a Certificate of Inspection(CoI) issued confirming that all goods are checked to confirm they are of high quality and conform to health, safety and environmental standards before they are packed in a container that is sealed by an inspection agency for shipping to Kenya.

Importers under Route D will get a CoI with KRA and other regulatory agencies receiving details of expected cargo showing amount of tax to be paid.

“Upon arrival, the cargo owners or their agents log requests for clearance and are informed of taxes to be paid as well as handling charges without it (cargo) being subjected to re-inspection on arrival,” Mr Ongwae said.

Easing clearance processes by having all regulatory agencies in a single online portal, SIMBA automatically fast-tracks handling of cargo, easing costs for storage, processing as well as the time taken moving from one office to another to seek clearance.

SIMBA Manifest automatically simulates the amount of payable taxes days before cargo arrives, enabling faster clearance of goods. This also cuts demurrage charges by ships, levied for delayed offloading. The costs are usually passed on to buyers.

“No increase in cost is anticipated. On the contrary, it will make it easier for legitimate trade to flourish in a more organised way in full compliance with regulatory requirements. More people will find it easier to bring their goods through consolidation,” Kebs MD said.

Licensed inspection firms charge between Sh26,500 and Sh270,000 for every container they assess.

The selected four agencies — Intertek International Ltd, China Certification and Inspection (Group) Co. Ltd (CCIC), Bureau Veritas (BV) and Socie’te’ Ge’ne’rale de Surveillance SA (SGS) — have branches across the world’s ports.

READ: Kebs says registration of goods inspectors at port to save costs

Usually it takes between three to four weeks to clear goods via Mombasa port due to the tedious process of opening cargo to verify contents of a container and recommend amount of import duty to be paid.

This sees cargo owners pay storage and processing fees that could be waived once inspection is conducted at source with clearance reduced to online documentation and verification. This could also reduce the time for processing goods from four to two days.

Mr Ongwae praised the new process saying it will substantially curb entry of substandards goods into the country with KRA obtaining full disclosure on individual value of the consolidated items and thus be able to compute accurate taxes.

Other measures taken is for all clearing and forwarders firms and their employees to undergo training and be members of the Kenya International Freight and Forwarders Association (Kifwa).

The government has since warned that any firm found dealing with contraband products will be blacklisted and its officials outlawed from conducting any business at the port.

Currently, 31 former KRA and Kenya Ports Authority employees are facing prosecution over dubious clearance of 124 containers, denying the taxman Sh106.5 million between May 1 and August 3, 2016.