for Investors, Exporters

& Importers

2012

Export Promotion Council

1st and 16

th Floor, Anniversary Towers, University Way

P.O. Box 40247 00100 GPO

Nairobi Kenya

Tel. +254 20 222 853 4-8, 0722 205 875

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Forward

It gives me great pleasure to present to you the Roadmaps and Business Charter of the Export

Promotion Council for the financial year 2011 – 2012. The Export Promotion Council is Kenya’s

National focal point for the development and promotion of export of goods and services and

harmonises export related activities in the country. The Council identifies and engages other

stakeholders to address bottlenecks in the flow of trade and investment in order to facilitate

export development. The Council achieves this through establishment of forums for dialogue

between the exporting fraternity and relevant public and private sector organisations. These

forums enable the Council to engage with the public and private sector institutions in order to

capture any concerns affecting the export sector, including policy and administrative issues

hindering their business.

The Council annually engages respective stakeholders to review Roadmaps for Exporters,

Importers, Investors and incentives offered under various export schemes including the

business charter which spells out the code of conduct for business and commerce in Kenya.

The Maps, which are five in number, aim at providing guidelines to the business community in

order to maximise benefits of macro-economic reform and other policy changes and facilitates

the effectiveness of export and import procedures in Kenya. These guidelines also highlight the

available incentives under the various export incentive schemes. Constraints to increased flow

of trade include the administrative barriers and procedures associated with the movement of

goods for both import and export of raw materials, intermediate and finished products.

Opportunities created by recent reforms and measures to reduce regulation of economic

activities are vital to the process of enhancing production and improved export performance.

Expansion of trade can be heavily constrained by unnecessary procedures and formalities. The

reform process itself, through deregulation and simplification of procedures, can be hindered by

lack of knowledge and uncertainty over what the correct procedures are.

These Road Maps are an accurate record of current procedures that have been carefully

checked in collaboration with relevant organisations. However, the Export Promotion Council

accepts no liability for any consequences of variations or deviations found in their daily usage by

practitioners in business and commerce. Users are requested to advise the Chief Executive,

Export Promotion Council of any inaccuracies or variation of these procedures, which they

encounter. In this way, the Road Maps will be maintained as a true and accurate description of

the real procedures in trade and investment in Kenya.

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The Road Maps for Exporters and Investors aim to maximise the benefit of macro-economic

reform by imparting knowledge on existing and potential members of the business community

and facilitating the effectiveness of commercial transactions in Kenya. The revised Roadmaps

and business charter are available at EPC’s Centre for Business Information (CBIK) as

reference material which accurately describes the current procedures and which are readily

available to the business community. Additional copies will be sent to our stakeholders including

Trade support Institutions.

This year’s roadmaps were revised by EPC in collaboration with key stakeholders including

Kenya Revenue Authority (KRA), Kenya Investment Authority (KenINVEST), Kenya Bureau of

Standards (KEBS), Ministry of Finance (TREO), Kenya National Chamber of Commerce and

Industry (KNCCI), Export Processing Zones Authority (EPZA), Kenya Plant Health Inspectorate

Service (KEPHIS), Kenya International Freight & Warehouse Association (KIFWA) and the

Ministry of Trade respectively and therefore reflects the current status as prevailed at the time of

compilation.

The business charter on the other hand provides guidelines on the conduct of any business and

compliance to established regulations and procedures which are crucial to the success or failure

of any business enterprise. In order to enable entrepreneurs to conduct their affairs in a

coordinated manner, the Council found it necessary to develop a Business Charter for the

conduct of business and commerce in Kenya. The Charter therefore contains a set of practices

and business ethics that govern and binds the business community in the course of their

commercial transactions both locally and abroad. The Council is convinced that these guidelines

will be subscribed to by businesses in a manner appropriate to their particular businesses or

activities.

It is envisaged that these principles will be accepted and endorsed by the highest authorities in

both private and public sectors. Each company or institution, which chooses to subscribe to

them, will be expected to publicise and apply these governing principles to their businesses.

This document comes at an opportune time, with the advent of the new constitutional

dispensation. It is anticipated that the progressive implementation of the constitution will

strengthen governance, improve the administrative and regulatory framework, support the

overall reform process and guide exporters in making informed decisions. This is bound to have

significant effects on the flow of cross border trade and investments in the region.

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On behalf of the Council, I take this opportunity to thank all those who contributed to the revision

and subsequent production of both the Roadmaps and the Business Charter for their support in

this important activity. I now avail the two for use, wider circulation and hope that these

documents will be put into good use for the benefit of the entire business community.

Hon. Peter N. Ndwiga EHG

Chairman

Export Promotion Council,

1st & 16th Floors, Anniversary Towers, University Way,

P.O Box 40247 -00100 NAIROBI

Tel. +254 2228534 / 8; +254 722 205875; +254 734 228534; Fax +254 2218013,2 228539

E-mail: chiefexe@epc.or.ke; manager@cbik.or.ke

URL: www.epckenya.org

2012

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1. IMPORT OF GOODS: A GENERAL ROAD MAP FOR IMPORTERS

1. IMPORTER NEGOTIATES

AND FORMALISES PURCHASE CONTRACT WITH SUPPLIER

(Some goods require special import approvals by relevant authorities)

Contract of sale and purchase

Pro-forma invoice

2. SUPPLIER

FORWARDS PRO-FORMA INVOICE TO IMPORTER

5. CUSTOMS SERVICES

DEPARTMENT CHECKS FORM C61 FOR ACCURACY & COMPLETENESS.

3. IMPORTER COMPLETES

AND SUBMITS FORM C61 (IDF) TO CUSTOMS ONLINE (www.kra.go.ke )

Importer submits form C61 completely filled.

Goods originating from EAC member states do not require the payment of the IDF fees. (Submitted with a valid certificate of Origin)

6. CUSTOMS SERVICES DEPARTMENT

ISSUES COMPUTER GENERATED IDF WHICH HAS REFERENCE NUMBER AND DISPATCHES TWO COPIES TO IMPORTER

C 61 Importer Declaration Form (2 copies)

Importer copy

Customs copy

4. IMPORTER PAYS KSH

5000/= ADVANCE PAYMENT OF THE IDF FEES

IDF fee is 2.25% of the CIF value. The balance of the IDF fee is paid at the time of clearance of goods at the custom.

7. KEBS appointed agencies to

determine compliance to relevant standards

i) For list of inspection agents and

products covered by PVOC visit www.kebs.org

ii) For Goods that do not require PVOC, step 7 is not necessary

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8. GOODS COMPLIANT OR

THOSE NOT COVERED UNDER PVOC ARE THEN SHIPPED TO KENYA

9. SUPPLIER SENDS FINAL

INVOICE WITH AIRWAY BILL or BILL OF LADING (FOR GOODS THAT ARE TRANSPORTED BY SEA) TO THE IMPORTER.

10. IMPORTER

ELECTRONICALLY LODGES C17B IMPORT ENTRIES WITH CUSTOMS FOR PAYMENT OF DUTY.

12. RELEVANT GOVERNMENT

AGENCIES INCLUDING CUSTOMS, KENYA PLANT HEALTH INSPECTORATE SERVICES, PORT PUBLIC HEALTH AND KENYA BUREAU OF STANDARDS INSPECT SELECTED GOODS.

NOTE: i. Dealers in import of agricultural

products are required to familiarise with applicable Sanitary and Phytosanitary

controls

11. IMPORTER PAYS

APPLICABLE DUTIES AND BALANCE 0F 2.25% IDF FEES TO CUSTOMS PRIOR TO CLEARANCE OF GOODS.

PAYMENTS ABOVE KSHS 1 MILLION ARE TO BE DONE THROUGH RTGS (REAL TIME GROSS SETTLEMENT) WHERE IMPORTER USES ELECTRONIC FUNDS TRANSFER (EFT)

13. GOODS ARE RELEASED BY

CUSTOMS TO THE IMPORTER ON CONFIRMATION THAT PORT CHARGES HAVE BEEN PAID.

- Release of Goods

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2. EXPORTS: A ROAD MAP FOR EXPORTERS

1. EXPORTER APPLIES FOR

THE COMPANY P.I.N. FROM

KRA ONLINE

2. EXPORTER APPLIES FOR ANY SPECIAL EXPORT CERTIFICATE AS NECESSARY

Documents as specified in regulations controlling specific items being exported.

Special Certificates are commodity specific e.g. Horticultural Crops Development Authority (HCDA) for horticultural export, plant health certificates from KEPHIS and a KEBS’ certificate may also be necessary.

Note: Dealers in export of agricultural products are required to familiarise with applicable Sanitary and Phytosanitary controls

5. ARRANGE SHIPMENT INSURANCE

Marine cover to be obtained by exporter from company of choice

4. EXPORTER APPLIES FOR CERTIFICATE OF ORIGIN (AS REQUIRED BY COUNTRY OF IMPORT)

Certificates of origin to appropriate destinations: Exporters to EU obtain EUR 1; Exporters to COMESA obtain COMESA certificate of origin; Exporters to EAC to obtain EAC certificate of origin; Exporters to OECD countries obtain GSP Certificate of Origin; Exporters to countries other than above obtain Ordinary Certificate of Origin.

All these certificates are issued by KRA apart from ordinary certificate of origin which is issued by KEBS and KNCCI.

3. EXPORT ENTRIES FORM

C17B ARE ELECTRONICALLY LODGED WITH CUSTOMS BY CLEARING AGENTS FOR

PROCESSING

6. EXPORTER TO CHECK STANDARDS/REGULATIONS REQUIREMENTS OF THE COUNTRY OF EXPORT. – liaise with KEBS on www.kebs.org

7. CUSTOMS CERTIFICATION OF

EXPORTS

Export certification is done by customs at points of exit after confirming the authenticity of all supporting documents and physical verification.

8. GOODS ARE

SEALED AND SHIPPIED

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3. PROJECT IMPLEMENTATION PROCESS- A ROAD MAP FOR INVESTORS

1. REGISTRATION AT KENYA INVESTMENT AUTHORITY

(www.investmentkenya.com)

2. COMPANY REGISTRATION / INCORPORATION- Registrar of companies

3a. APPLICATION FOR PIN NUMBER (CERTIFICATE) FOR COMPANY

Pre-conditions:

For Limited companies-certificate of registration/incorporation, memorandum of association and articles of association.

For individuals-copy of ID/Passport Done within 1 day following PIN application (No charge)

The PIN NO can be applied for on-line at the KRA website (www.kra.go.ke )

3 b. APPLICATION FOR ENTRY PERMITS FOR FOREIGN INVESTORS (DIRECTORS CLASS H)

The immigration department requires evidence of availability of investment fund of USD 100, 000 in accordance with the Investment Promotion Act 2004 by way of certified copies of bank statements.

Application forms for work permits are available at KenInvest and Ministry in-charge of immigration matters

Note: This Step applies only to Foreign Investors

3 c. APPLICATION FOR EXPATRIATE EMPLOYEES (CLASS A)

Requirements: - Cover letter from the licensed EPZ company to

EPZA, - Form 3 and 22 duly filled, - C.V., Testimonials and Certificates of the applicant, - Certificates of understudy and Kenyanization form

duly filled, - 3 passport size photographs of the applicant, - Photocopy of applicant’s Passport,

Additional requirements for class H work permit:

Share certificate from Registrar of Companies,

Memorandum & Articles of Association,

Certificate of Incorporation,

PIN of company and applicant,

Proof of investment – Bank statement, Audited accounts if renewal

NB: All these documents must be provided in duplicate Note: This Step applies only to Foreign Investors

4. APPLICATION FOR PIN NUMBERS FOR DIRECTORS

Complete application TQ1, attach photocopy of passport plus work permit if foreigner, or attach photocopy of ID if national.

PIN NO. can be applied on-line at the KRA website (www.kra.go.ke ).

PIN issuance is instant

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6. LOCAL AUTHORITY/RELEVANT SERVICE PROVIDERS

Single Business permit licence application

Application for utility services from other service providers (water, electricity) etc.

8. APPLICATION FOR OTHER RELEVANT LICENCES/ APPROVALS WITHIN A PERIOD OF ONE YEAR (12 months)

This provision is necessary to enable investors commence business within the shortest time possible. As per the law (Investment Act 2004), the Authority assumes that the investor will have acquired all other necessary documentation within 12 months. Whereas other processes may take long e.g. land transfer, change of user and registration of property.

KENINVEST assists investors to acquire all other licences and approvals (e.g. NEMA, CCK, MIN OF HEALTH)

Project approvals are subject to compliance with health, environment, and safety requirements

7. INVESTMENT CERTIFICATE ISSUED

5. ACQUISITION OF PREMISES

For land in private ownership - Zoning – Approval change of use – Approval to undertake construction – Approval of building plans – Approval of building plans code – Inspection

For agricultural land – Application to Land Control Board For Government Land

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4. TAX REMISSION FOR EXPORTS OFFICE (TREO SCHEME) A ROAD MAP FOR EXPORTERS

WHAT DOES IT PROVIDE A manufacturer/ producer can have duty and VAT inputs related to any export remitted. The manufacturer/producer can opt for single order arrangement, relating to specific importation or a 6-month continuous arrangement for on-going imports. WHO IS ELIGIBLE: Gazetted manufacturers who import raw materials that are directly or indirectly utilised in production/ manufacture goods for export/ Production of essential goods for home use

1. SUBMISSION OF APPLICATION i) Collect forms from KAM or

download from www.kam.co.ke ii) Submit completed forms to KAM

with certificate of Tax compliance.

iii) PIN certificate & Certificate of Incorporation

iv) KAM verifies application and forwards form to TREO in Treasury.

2. COMPANY VERIFICATION i) A team comprising of KAM

representatives from TREO & KRA visits the Company if its new

ii) The team makes a report of the visit and submits to TREO Committee for deliberation.

iii) TREO Committee deliberates on the eligibility of the applicants and recommends for gazzettment to Commissioner of Customs Services.

3. APPROVAL i) The TREO convenes a meeting to consider the

application to the TREO programme in line with the TREO regulations

ii) The TREO Committee either accepts or declines or defers the request

iii) TREO Committee deliberates on eligibility of the applicants and recommends for Gazettement to Commissioner of Customs Services because of VAT and the EAC secretariat because of import duties on imported inputs

iv) The decision of the Committee is communicated to the company by KAM

4. GAZETTEMENT i) If approved, the new company is

Gazetted and therefore allowed to make applications through forms C56 or C60 for Duty/ VAT remission on raw materials.

ii) Users of inputs that have import are gazetted by EAC secretariat and only those that have VAT are gazetted by the commissioner of custom.

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5. SUBMISSION OF APPLICATION TO TREO PRIOR TO

IMPORTATION 1) For single order arrangement:

C 56 /C60 Application Form

Form C61 (IDF)

Pro-Forma Invoice/Import Invoice

Statement of Raw Material utilisation through letter of credit (L/C)

Confirmation of purchase by buyer.

Detailed Introductory letter by the applicant

Copy of company registration/certificate of incorporation

Copy of VAT Registration

Copy of PIN Certificate

2) For 6 months continuous arrangement:

Evidence of past export performance over previous twelve months.

Details of production and export plans for the next 6 months.

List of goods to be imported including description, tariff classification, quantity, value and estimated duty to be remitted

6. SUBMISSION OF APPLICATION FOR BOND TO

CUSTOMS SERVICES DEPARTMENT AFTER EXECUTION OF THE BOND AT BANK OR INSURANCE IN PRESENCE OF CUSTOMS, EXPORTER CAN PROCEED WITH IMPORTATION.

An Insurance Bond or a Bank Guarantee for 100% of the total import Duty and VAT to be remitted must be issued. (See Road Map for Importers)

CB 13 Application form (4 copies) distributed to:

Original – Customs

Duplicate – Customs (point of entry processing)

Triplicate – Importer

Quadruplicate- Guarantor

Approved Form C56/C60

7. IMPORTATION OF RAW MATERIALS

AND CLEARANCE THROUGH CUSTOMS

Apply to customs for self clearance or Engage Licensed Clearing Agents

8. UTILIZATION OF THE RAW MATERIAL

Maintain proper records of used & un-used materials.

Random Inspection by Customs Officials.

Submission of quarterly reports.

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11. SUBMISSION OF RECONCILIATION

DECLARATION ON FORM C57 (TRIPLICATE) AND (C 61)

- Reconciliation Declaration within 12 months or in case where a renewal was issued after 6 months, with following documentary evidence:

- In the case of inputs gazetted by EAC secretariat reconciliation declaration

- Import entry - Ex-warehouse entry (for customs bonded goods) - Proof of export – foreign exchange payment

through commercial bank / Export entry certification

- Evidence of raw material utilisation showing inputs/outputs/by-products/production losses/scrap

- Copy of security bond-CB 13 - Copy of form C56/C60 - Form C58 (Transfer forms)

10. INSPECTION OF CUT-OFF WASTE

Under this procedure the Customs Services Department: - Inspects on-site the waste. - Issues the Certificate of Destruction of

waste for cut off waste of no customs commercial value.

- Assesses taxes on unused inputs or cargos that are of commercial value

12. VERIFICATION OF

RECONCILIATION FILES Under this procedure: - A letter of recommendation for the

cancellation of the bond is issued. Inspection of the operations on

need basis.

13. APPLICATION TO CUSTOMS

FOR CANCELLATION OF BOND CB Form

C 30 Application form for bond cancellation

Letter of recommendation on cancellation

Attach triplicate copy CB Form

14. CANCELLATION OF BOND

The Customs Services Department cancels the Bond and notifies the exporter and the guarantor (Bank or Insurance Co.)

The original CB Form bond security is returned/retired.

9. EXPORTATION OF GOODS PRODUCED

(Ref. Exports: roadmap for

exporters)

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5. EXPORT PROCESSING ZONES (EPZ) PROGRAMME A ROAD MAP FOR EXPORTERS

WHAT IT PROVIDES - Corporate Tax Holiday: For first 10 years and

tax at 25% for next 10 years, - Withholding Tax Holiday: For first 10 years on

dividends & other payments to non-residents, - Customs and Excise Import Duty Exemption:

machinery, raw materials & intermediate inputs, - Stamp Duty Exemption, - Facilitation and Aftercare: Work permits,

Customs, Industrial Relations & Utilities, - Single Licence: for most activities, certain

sectors may require special permits and licences,

- 100% Investment Deduction: over 20 years on initial capital investment.

- Exemption from pre-shipment inspection (PSI) and import declaration form (IDF) fees

- EPZ manufacturing, service and zone developer/operator licence allow upto 20% domestic sales; EPZ commercial licence requires 100% exporting

ELIGIBILITY Companies incorporated in Kenya for the sole purpose of engaging in the following export oriented activities: - Manufacturing or Processing

Activities - Commercial Activities including:

bulk breaking , trading, re-labelling, grading, packing e.g. regional distribution centres

- Service Activities including: brokerage, repair, consultancy and information and telecommunication enabled services (ITES) e.g. BPO, Call & Contact Centres, etc.

- Zone Developer/Operator Activities

- Business Service Permit (BSP): services rendered primarily to EPZ enterprises & staff

ADMINISTERING AGENCY Export Processing Zones

Authority (EPZA) www.epzakenya.com

Note: For Commercial Activities - Import of inputs & machinery duty free, - Not entitled to the 10 year corporate tax & withholding tax holidays, - No sales to domestic customs area - Firm must label goods indicating country of origin e.g. manufactured in China repacked in Kenya, - Activity must be carried out in separate building from where manufacturing is taking place, - EPZA is required to consult with Commissioner General of KRA before licensing.

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2b. APPLICATION FOR ENTERPRISE LICENCE (Manufacturing, services & commercial activities) Form EPZE (1) with following annexes: - Manpower requirement, - Electricity requirement, - Water requirement, - Telecommunication requirement, - Port and airport requirement, - Management posts (including expatriates), - Environmental checklist. Submitted with US$250 application fee; Export buyers and bank reference letters; qualifying projects approved in principle by EPZA.

2a. APPLICATION FOR EPZ DEVELOPER/ OPERATOR Form EPZD (1)

Application for developer/operator licence which involves designation of an area (piece of land) in Kenya as an EPZ.

Submitted with US$250 application fee.

Application evaluated, site visits made and building plans inspected.

1. SUBMISSION OF PROJECT PROPOSAL TO EPZA

Project Proposal ( 2-3 pages) outlining: product or service; production process; destination markets; project costs; financing structure; location & premises desired; employment to be generated; technology to be transferred.

EPZA carries out preliminary screening by assessing the potential fit of the project. Application forms & guidelines are provided to investor.

2. INCORPORATION OF EPZ COMPANY IN KENYA FOR SOLE PURPOSE OF ENGAGING IN EPZ ACTIVITIES - EPZA approves draft Memorandum and Articles of Association then investor incorporates EPZ

company, - Submit copies of Certificate of Incorporation plus Memorandum and Articles of association to EPZA

with licence fee. - Submits copies of other relevant licences not issued by EPZA and not exempted by EPZ Act e.g.

Mines & Geology (processing of minerals), Pharmacy & Poisons Board (pharmaceuticals) and NEMA (activities listed in Second Schedule of Environmental Management Coordination Act, 1999).

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5b. GRANT OF LICENCE FOR EPZ ENTERPRISE (form EPD (3)) - Provided on payment of US$1,000 annual licence fee for

enterprise locating in an existing gazetted zone (e.g. Athi River).

- Licence bears firm name, activity and zone location.

4a. LETTER OF ADVICE Letter to the proposed investor advising that EPZA Board has recommended gazettement to Minister responsible for Trade and should proceed to

Incorporate an EPZ Company (refer to procedure 3b),

Obtain certificate of Registration,

Transfer/lease of land to EPZ entity,

Obtain Environmental Impact Assessment (EIA) licence from NEMA.

4b. ZONE GAZETTEMENT Legal Notice prepared, forwarded for approval by Attorney General’s Chambers, signed by minister responsible for Trade and published in Kenya Gazette

5a. DEVELOPER/OPERATOR LICENCE GRANTED TO EPZ FIRM Upon payment of US$5,000 annual fee, licence issued (Form EPD 1). Developer develops zone infrastructure using EPZ incentives with compliance with EPZ import/export procedures

5c. OTHER REQUIREMENTS FOR LICENCED ENTERPRISE

Company Personal Identification Number (PIN),

EPZ Import/Export Code

Valid EPZ licence

Letter of VAT Exemption from KRA

Certificate of Incorporation

3b. INCORPORATION OF EPZ COMPANY IN KENYA FOR SOLE PURPOSE OF ENGAGING IN EPZ ACTIVITIES - EPZA approves draft Memorandum and Articles of

Association then investor incorporates EPZ company, - Submit copies of Certificate of Incorporation plus

Memorandum and Articles of association to EPZA with licence fee.

- Submits copies of other relevant licences not issued by EPZA and not exempted by EPZ Act e.g. Mines & Geology (processing of minerals), Pharmacy & Poisons Board (pharmaceuticals) and NEMA (activities listed in Second Schedule of Environmental Management Coordination Act, 1999).

3a. REQUIREMENTS FOR ZONE - Land leased or owned by developer - Lease should have 30 unexpired years - Suitable infrastructure including:

Electricity at 11KV,

Water supply at 25 cubic metres per day,

Access roads,

Illuminated security wall,

Custom offices,

Ablution facilities for workers,

6 metres between building & fence.

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6. APPLICATION FOR EXPATRIATE EMPLOYEES FROM EPZ ENTERPRISE WITH ALL REQUIRMENTS: - Cover letter from the licensed EPZ company to EPZA, - Form 3 and 22 duly filled, - C.V., Testimonials and Certificates of the applicant, - Certificates of understudy and Kenyanization form duly filled, - 3 passport size photographs of the applicant, - Photocopy of applicant’s Passport, - Additional requirements for class H work permit:

Share certificate from Registrar of Companies,

Memorandum & Articles of Association,

Certificate of Incorporation,

PIN of company and applicant,

Proof of investment – Bank statement, Audited accounts if renewal NB: All these documents must be provided in duplicate

8. EXECUTION OF BOND CPZB/ CB Form – General Bond for the removal of goods to/from Export Processing Zone

9. GOODS TRANSPORTED FROM PORT OF ENTRY TO EPZ UNDER CUSTOMS SEAL BY SHIPPING CONTAINER OR ANY OTHER SEALABLE VEHICLE.

7. COMPANY PROCEEDS WITH IMPORT OF INPUTS/MACHINERY Exemption from Pre-Shipment Inspection (PSI), Exemption from payment of Import Declaration Fee (IDF), Customs Documentation done- C17B entry.

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13. EXAMINATION OF GOODS FOR EXPORT BY CUSTOMS PRIOR TO LEAVING EPZ

Copies of a C17B to accompany goods to port of exit

Packing List

Bill of Lading

Invoice

15. CANCELLATION OF BOND BY CUSTOMS

Copy of C30 on bond cancellation attached with C17B.

Cancellation done online.

14. GOODS TRANSPORTED FROM EPZ TO PORT OF EXIT UNDER CUSTOMS SEAL, CONTAINERIZED OR ANY OTHER SEALABLE VEHICLE.

10. CUSTOMS INSPECTION AND CERTIFICATE OF RECEIPT OF GOODS - C17B is stamped so that bond

(CPZB/CB Form) can then be cancelled.

12. COMPANY PROCEEDS WITH EXPORT C17B, Bond (CPZB/CB14) allocated, Sales to customs territory requires IDF and

payment of import duties and VAT by customer in the domestic market and a surcharge of 2.5%,

Authority from Minister of Trade required to sell into domestic market,

KEBS inspection to ascertain conformity to standards prior to selling into the domestic market is required.

11. EPZ ENTERPRISE PROCEEDS WITH LICENSED EPZ ACTIVITY

The company required to maintain stock records and submit monthly returns to customs (commercial licence),

Quarterly and annual returns submitted to EPZA

Company complies with conditions of EPZ licence

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6. MANUFACTURING UNDER BOND (MUB) A ROAD MAP FOR USERS

8. MUB OPERATOR COMPLETES EXPORT ENTRY

CF. 4 MUB entry form

WHAT IT PROVIDES The Exporter is exempted from Duty and VAT on imported machinery and raw materials used in manufacturing goods for export ELIGIBILITY Manufacturing companies registered in Kenya that export all or part of their products. ADMINISTERING AGENCY Kenya Investment Authority (KenInvest)

1. APPLICATION TO KENYA INVESTMENT AUTHORITY (KenInvest)

Certificate of incorporation

Application for investment certificate

Upon acquisition of all relevant licences and approvals, KenInvest writes to Minister for Finance to facilitate MUB project

3. PAYMENT OF LICENCE FEE TO COMMISSIONER, CUSTOM SERVICES

Authority to pay the licence fees shall be issued to the applicant.

The license fees payable is US $1500.

In-case a licence is issued in the course of the year, the fees is computed on a pro rata basis.

Late applicants shall pay a non re fundable late application fee.

The license shall be issued on form C19.

A licensee of a bonded factory shall submit a return of goods remaining in the bonded factory to the Commissioner, for the period up to the 30th day of June of each year.

4. MANUFACTURING PROCESS STARTS

Documents are lodged (C17B) electronically with customs for processing

Execution of Security Bond CB ( MUB import Entry form) to cover Imported goods for manufacture under bond

2. APPLICATION TO COMMISSIONER, CUSTOMS SERVICES DEPARTMENT, FOR A MUB LICENCE

Application in a prescribed form C18

Attach approved architectural plans of buildings, Inspection of premises for suitability by a custom officer in terms of location, size, construction materials etc

A description of each building, room, place and item of plant, as well as the purpose for which each will be used

Approval by the Commissioner is granted. Bonded factory Number is allocated. A security bond shall be executed on form CB6.

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5. EXPORTER EXECUTES BOND

CB Form General Bond for the security of warehouse goods or removal of manufactured goods and export under bond.

Bond secures duty on goods on removal or in factory and compliance with all provisions relating to MUBs.

6. MUB OPERATOR ENTERS MACHINERY AND RAW MATERIALS INTO REGISTERS

Cf. 6 Machinery and raw materials register.

Separate entries made for imported and locally obtained equipments

10. EXPORTER TRANSPORTS GOODS IN SEALED CONTAINERS TO FINAL PORT/ POINTS OF EXIT

9. INSPECTION OF GOODS BY CUSTOMS AND SEALING OF

CONTAINERS

11. EXPORTER OBTAINS CERTIFICATE OF SEALED VEHICLES/CONTAINER TO PORT OF EXIT AND SUBMITS TO CUSTOMS OFFICER AT BONDED FACTORY WITHIN 30 DAYS

Certificate of Export

12. CANCELLATION OF SECURITY BONDS BY CUSTOMS

Lodgement of C30 application

Attachment of supporting documents

7. MUB OPERATOR ENTERS MANUFACTURED GOODS AND WASTES INTO REGISTERS

CF.7 Manufactured Goods Register

CF.8 Wastes and Rejects Register

Form EPD (2) Provided upon payment of US$5,000 annual fee

8. MUB OPERATOR COMPLETES EXPORT ENTRY

CF. 4 MUB entry form

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Annex 1

The Challenges Facing Kenya

The need for a new framework for the conduct of business

and commerce in Kenya

The process of economic reforms and growth calls for

supportive policy environment for business to thrive. To

achieve this, there is urgent need to develop a framework that

sets out modalities that will govern the conduct of business

transactions while at the same time conforming to international

standards.

In order to strengthen the policy framework, the Export

Promotion Council is promoting the use of a Business Charter,

which incorporates a Code of Conduct for all business and

commercial contracts.

This Charter establishes a clear set of standards and

performance for the supply of goods and services. These are

contained in a set of governing principles, to which all leading

private and public sector organisations in Kenya are invited to

subscribe and adhere to.

The Council believes that such a Charter will raise

expectations and change attitudes, concerning the

transparency of contracts and accountability for the use of

resources, in both public and private sectors. If it is to be

effective, this Charter will have to be adopted and promoted at

the highest levels of public and private sectors.

The Charter also needs the support of the Government

through the provision of an arbitration service and its adoption

as a condition of public sector procurement.

The Charter includes a statement of governing principles with

widespread application. The aims is of these principles are to

promote higher standards of service delivery, to be adopted by

all leading private and public sector organisations and

promulgated with appropriate adaptations by all concerned

companies and organisations engaged in commerce. Thus,

those companies and organisations, which are dedicated to

high standards for the conduct of business and commerce, will

be distinguished from those which are not. The companies,

which do not adopt or apply these principles, will not deserve

new business and will eliminate themselves from major

contracts.

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The prime vehicle for implementing and enforcing of the

governing principles will be the commercial contract. It is

hoped that this will be reinforced with legislation to ensure

transparency with provision for registration and reporting,

including audit where appropriate. There should also be proper

arrangements for dealing with complaints and for seeking legal

redress in cases of dispute through an arbitration procedure.

2. A Strategy for Improving Business Ethics

The strategy for improving business ethics in Kenya will be

threefold.

First, to re-establish, in consultation with the public and

private sectors, a set of standards for the conduct of

business and commerce,

Second, to promulgate these widely and to seek their

universal acceptance in public and private sectors, and

Third, to solicit a genuine commitment by all parties

engaged in business and commerce to the highest

standards of business ethics.

The primary means of implementation will be through

persuasion and publicity targeting all leading business

organisations.

The secondary means will be through the fixing of higher

standards for public sector procurement and the provision of

an investigation and arbitration service to provide redress in

the case of disputes or departure from declared Governing

Principles.

The aim will be to achieve the attachment of a set of

appropriate standards, based on the agreed Governing

Principles, to every business and commercial contract for both

domestic and export markets.

These standards will set out the indicators of the quality of

product and service. Appropriate measures will then be taken

to ensure adherence to these standards through publicity and

transparency, credible arrangements for inspection and audit,

complaint procedures and legal redress as a last resort.

18

3. The Business Charter

The Business Charter comprises three statements:

A statement of basic rights, enjoyed by citizens of Kenya

and those doing business and commerce.

A statement of obligations, which accompany those rights,

enjoyed by citizens of Kenya and those doing business and

commerce under the protection of Kenyan law

A statement of principles, governing business and

commercial transactions.

3.1. Basic Rights

The buyer is entitled to:

Choice of supply, without favour or discrimination

Information on performance and quality, which is clear and

unambiguous

Performance and quality, which equals or exceed the

explicit standards

Quality of service, including meaningful advice

Value for money, within a contract acceptable to both sides

After-sales service, which is prompt and reasonable

Means of redress, when things go wrong.

The supplier is entitled to:

Information on business and sales opportunities

Equal opportunity to make an offer, without hidden

conditions

Payment with a contract acceptable to both sides

Opportunity to put things right when they go wrong

Redress under the law, when binding agreements are

broken.

19

3.2 Basic Obligations

All contracts shall provide for the following:

a) Specific terms and conditions of payment; clearly defined

responsibilities for production, delivery and other essential

elements, so as to create a clear and unambiguous

understanding of the obligations of the buyer and the seller.

There should be no hidden or parallel terms and conditions.

Both parties should be loyal to each other in the spirit and terms of the contract. All parties should have mutual co-existence and benefit from the agreement. b) Contracting parties should establish payment terms, which

are acceptable to buyer and seller, and establish a

mechanism for payment which allows for safe and timely

transfer of funds.

Any penalties due for failure to abide with the laid down terms of the contract should be clearly specified. Conditions for termination or non-performance through natural calamities or disasters should be indicated with provision for reasonable notice.

c) Generally, the interests of the general public shall be

watched over, promoted and safeguarded, by the highest

possible standards of professional behaviour in the

circumstances.

Care should be taken not to mislead the public, either through inappropriate information or deed. Public confidence shall be promoted through the prevention or correction of any abuse, which might undermine this confidence.

d) Environment - goods and services should be produced and

supplied in a manner which does not harm or permanently

detract, either directly or indirectly, from the environment

and Kenya's natural resources.

e) All parties to business and commercial contracts shall act

within the Laws, Regulations and Official Procedures of

Kenya and those of transit and destination countries,

relating to their product or service. There is a full portfolio of

laws in Kenya, covering the conduct of business and

commerce, which should be consulted for information and

guidance.

3.3 A Statement of Principles, governing Business and

Commercial Transactions

The governing principles of the Code of Conduct are:

20

Standards of quality and service - Standards of service to be explicit, published and prominently displayed. These should encompass any statutory entitlement, courtesy and helpfulness in delivery, and a commitment to prompt action.

a) Openness - The supplier should clearly indicate whether or

not the goods and services meet the standards set for their

performance.

b) Information - Full, accurate and up to date information,

about the goods and services being provided and the terms

and conditions attached, should be made readily available

in language, which is readily understood by the customer.

Performance - Indicators of performance should be established, measured and published by the supplier for the benefit of the customer and the managers of the producers and service providers.

c) Choice - wherever practicable, steps should be taken to

provide and maintain a choice of suppliers and service

providers within both public and private sectors.

d) Non-discrimination - Goods and services should be

offered and made available to all, regardless of race,

gender, religion, language or community. The interests of

minority or special interest groups should be properly

catered for.

Accessibility - Goods and services to suit the needs and convenience of clients, not of the suppliers or service providers; this requires flexible hours of service, flexible means of delivery, ready access to sources of information and enquiry points.

e) Complaint procedures - When things go wrong and the

desired goods or services are not delivered, the customer

is entitled to an honest explanation and appropriate

redress. The complaint procedure should be well publicised

and readily available.

f) Redress - Lessons should be learned from things which go

wrong. Severe failures, which cause damage to the

customer's interests, should be redressed through

appropriate compensation.

The Code of Conduct

The Code of Conduct requires that each company, or

organisation, accepting the Business Charter and its

Governing Principles, shall undertake to do the following:

a) Prepare and adopt through their highest governing

authority a charter for their business and their customers,

21

which is based on and incorporates the Governing

Principles, adapted to the needs of their sector or industry

b) Publish this charter in the company's promotion and sales

literature and terms and conditions of business

c) Ensure that all executives, employees and agents are

thoroughly familiar with the Customers’ Charter and bind

themselves to apply it to the conduct of the company or

organisations’ affairs

d) Attach a copy of the Governing Principles and their

Customers’ Charter to every contract for the supply of

goods and services and to every contract of employment

e) Provide for appropriate means of receiving and recording

customers' complaints or difficulties and for redress

f) Include in their annual report details of the measures taken

to establish and maintain their Customers’ Charter and their

progress in achieving the standards, which they have set

themselves

g) Submit an annual report to their stakeholders, including

owners, shareholders, and business or trade association,

on the progress towards the achievement of these

standards.

22

Annex 2: LISTS OF REFERENCE FORMS

No DESCRIPTION REFERENCE ORIG/COPY

1 Declaration of Value Form C52 Copy

2 Import Declaration Form Form C61 Original

3 Certificate of Origin Form A Original

4 Movement Certificate EUR. 1 No A Original

5 COMESA/EAC Certificate of Origin Original

6 Certificate of Ordinary Certificate of Origin –KEBS/KNCCI Original

7 Import Entry Form C17B Original

8 Application for Personal Identification Number for an Individual Form TQ 1 Original

9 Application for Taxpayer Identification Number for Company,

Partnership, Trust or Association

Form TQ 2C Original

10 Registration of Business Names Act - certificate of registration Form r. 5 Copy

11 Certificate of Incorporation GPK (F9) Copy

12 Import/Export Code Number Copy

13 Application for Export Processing Zone Developer/Operations License Form EPZD (1) Copy

14 Application for Export Processing Zone Enterprise License

(Manufacturing)

Form EPZE (1) Copy

15 Application for Export Processing Zone Enterprise License

(Commercial)

Form EPZE (1) Copy

16 Export Processing Zone License Form EPD (1) Copy

17 Export Processing Zone Developer/Operations License Form EPD (2) Copy

18 Export Processing Zone Enterprise License Form EPD (3) Copy

23

19 Bond for the Removal of Goods to/from Export Processing Zone Form CPZB Copy

20 Application for Security Pass Form EPZ Pass (1) Copy

21 Road Customs Transit Declaration Form C35A Original

22 Export/Re-Export Entry Form C 17B Original

23 Application for refund of Deposit or cancellation of Bond in respect of

Goods entered in transit and subsequently re-exported or for refund of

deposit or cancellation of bond given as security in accordance with

part XII of the act

Form C 30 Original

24 Import Declaration form Form C 61 Original

25 Manufacture Under Bond Export Entry Form C17B Original

26 Manufacture Under Bond Import Entry Form C17B) Original

27 General Bond for the Security Warehoused goods or removal for

Manufacture and Export Under Bond

Form CFB I Original

28 Imports for Direct/Indirect Exports Application Form Form C 56 Copy

29 One Stop Approval Process - Investment Application Form Original

24

Annex 3 ABBREVIATIONS

COMESA Common Market for Eastern and Southern Africa

CRF Clean Report of Finding

TREO Tax Remission for Exports Office

EPZ Export Processing Zone

EPZA Export Processing Zones Authority

EU European Union

GSP Generalised System of Preferences

HCDA Horticultural Crops Development Authority

IA Inspection Agency

ID Identification Documents

IDF Import Declaration Form

KenInvest Kenya Investment Authority

KEPHIS Kenya Plant Health Inspectorate Service

KEBS Kenya Bureau of Standards

L/C Letter of Credit

LN Legal Notice

MUB Manufacturing Under Bond

PIN Personal Identification Number

FTA Free Trade Area

25

RFI Request for Information

VAT Value Added Tax

CIF Cost Insurance Freight

PVOC Pre-shipment verification of conformity to standard.

EPC Export promotion Council

EAC East African Community

KNCCI Kenya National Chamber of Commerce & Industry

KRA Kenya Revenue Authority

26

Annex 4 SAMPLE FORMS

EPZA KIA IA Form TREO Others

EPZE 1

EPD (3)

EPZA (1)

EPD (1)

EPD (2)

EPZ PASS

CPZ B

C 60

C 57

C 58.

CF2

CFS

CF.1

CFB

CF.5

CF6

CF7

CF.8

CF4

C56 – Customs

C 57

C 60

C61 “

CB13 “

C30 “

T.Q2C “

T.Q1 “

Single business Permit/Licence

Certificate of Incorporation

C29

EUR 1

COMESA/ EAC Certificate of Origin

C35A

Import Licence

RFI (Request for Information)

Air Waybill

Bill of Lading

CRF

C17B- Customs

CF1 - “

C56