Press Center | Freight Shipping Logistics News
So far, only 35 logistics firms have won the privilege which is granted to importers, clearing agents, and transporters on the basis of proven compliance with the taxman’s regulations.
A customs official, who declined to be named because he is not authorised to speak, said the thorough scrutiny involved had made clearing agents reluctant to apply for the AEO status.
“Most clearing agents have not come forward because of the vetting process which includes scrutiny of past operations and payment of various taxes to KRA,” he said.
There are 700 clearing and forwarding companies registered with KRA.
The Kenya Shippers Council (KSC) recently recommended scaling up the AEO programme to address the high cost of doing business in the industry. AEO-compliant firms, for instance, do not have to strip their containers for customs verification. Stripping a 20ft container costs Sh6,000.
With KRA subjecting about 55 per cent of containers to verification, importers pay over Sh1.6 billion annually for the exercise, a Kenya Shippers Council policy paper on Container Freight Stations says.
Although CFSs incur this cost, the billing is passed on to cargo owners and consumers because state agencies that demand the process do not re-imburse the expense.
The Authorised Economic Operators programme is open to all players whose applications are successful. The initiative ran on a pilot basis for a year in 2008 before it was launched.
The KSC report says unilateral actions by trade facilitation agencies were behind acute delays in clearing cargo.
“Usually, they do not conduct joint verifications resulting in containers being stripped several times. Some agencies still insist on physical inspections even after KRA invested in electronic scanners,” said the report.
The report identifies system failures on Kenya Ports Authority and KRA automated systems as another cause for delays, before the cargo is moved to CFSs whose operators estimate the combined downtime to four hours daily.
PARASTATAL heads who signed the Mombasa port community charter risk being sacked if their agencies do not deliver on the contents of the new entity. The charter signed between the government and the private sector aims at improving the movement of cargo from the port into hinterland