Kenya’s New Customs Rule Mandates Certificate of Conformity When Importing

Kenya now requires a certificate of conformity known as the Pre-Export Verification of Conformity, (or “PVoC") which is required for customs clearance on every importation of finished goods.  The only exceptions to this rule are

     1)     Raw materials for processing into Finished Products

     2)     Spare parts for own use by a manufacturer, and

     3)     Customized machinery not meant for sale.

It should be noted that where an exception is purported as applicable, additional support would be required to substantiate the applicability of the exception.

The PVoC must be available upon a shipments arrival to Kenya.  Where it arrives without the PVoC, or where it is issued with a date later than the shipment’s arrival, it will be presumed that the procedures for the pre-export verification were not followed and the importer will automatically be assessed a 15% penalty on the CIF value.  They will be further required to post a redeemable bond of a similar amount pending the import’s quality verification.

Both the Kenya Revenue Authority and Kenya Bureau of Standards (“KEBS”) have oversight of this new rule, the latter for which administers the “Pre-Export Verification of Conformity to Standards” program for exports to Kenya.  As the purpose is to minimize the risk of unsafe and substandard goods entering the Kenyan market by ensuring that products meet the health, safety and environmental standards for Kenyans, non-compliant goods will be denied entry.

What does this change mean?

In order to avoid delays in the issuance of the PVoC, exporters should contact an authorized verification company as early as possible as it is mandated to be undertaken in the country of origin.  If your company anticipates future exports to Kenya, identifying an appropriate location is a smart way to avoid potential additional delays when it comes time to ship your product.

The companies Société Générale de Surveillance (“SGS”), Intertek International, Messrs Bureau Veritas, and the China Certification and Inspection Group have all been contracted by KEBS to perform the pre-export verifications.  Keep in mind however, that each verifier is assigned certain regions for which it may carry out the verification - as opposed to having a general right for inspecting products originating from any part of the world - so finding an approved one for your region is a prudent first step.

Contacting the local branch of any of these companies where the product is located should be the first step to determine whether it can perform the verification, or if another company should be contacted.

Next Steps

This requirement which previously applied to only a limited class of goods now applies to all finished goods.  If you are uncertain as to how to obtain the PVoC on your current or anticipated Kenya bound shipments, or seek guidance on whether your product may meet one of the exceptions, post your questions/comments below or email clark.deanna@gmail.com.

Argentina's New SIMI System Replaces DJAI Import Process

For those of you exporting to Argentina, you know all too well how challenging customs clearance has been with the required prior approval by the Administración Federal de Ingresos Públicos (AFIP- Argentine Tax and Customs Authority) and the submission of a Sworn Affidavit of Intent to Import, commonly known as the “DJAI.”

As announced at the end of December 2015, the newly ushered in “Sistema Integral de Monitore de Importaciones,” (“SIMI” - Integral System of Import Monitoring), has taken the DJAI’s place as Argentina’s new import verification mechanism. 

Unfortunately, despite the termination of the “DJAI,” a registration for an import license remains required for all imports, under 1 of 2 categories - either an “automatic import license,” or a “non-automatic import license.”  Once obtained, these licenses remains valid for 90 days.

The processing and management of these licenses must now be done via SIMI, whose purpose is to also provide the Argentine government with a simple and transparent way to gather statistical information on imports.

Non-Automatic Import License

A non-automatic import license must be applied for where a shipment requires a prior approval.  What determines whether or not a prior approval is needed turns on whether or not the article is included in the tariff of the Mercosur Common Nomenclature (“MCN”) which includes some, but not all, tariff numbers under the following chapters:

Chapters 28, 29

Chapters 34, 36, 39

Chapter 40, 42, 44, 48, 49

Chapters 51, 52, 54, 55, 56, 57, 58, 59

Chapters 60, 61, 62, 63, 64, 65, 68, 69

Chapters 70, 73, 74, 76

Chapters 82, 83, 84, 85, 86, 87, 89

Chapter 90, 94, 95, 96

Depending on the product’s tariff number, 1 of 15 different protocols for procuring the license must be undertaken, each of which requires the submission of data related to the goods itself and the exporter.

Automatic Import License

An automatic import license may be applied for where goods do not require a prior approval.  Such application requires providing no less than 14 data points such as country of origin, FOB values, and product information.

What does this change mean?

The new SIMI system should streamline customs clearance into Argentina given the application of the non-automatic import license and the reduction in goods subject to prior approval.

If you export goods to Argentina, be prepared for the possibility that customs may come back asking questions in relation to the values you have provided as Argentina maintains a database of what it considers to be the import value of certain articles based on the history of values recorded by other prior imports of the same kind.  Moreover, in the case of warranty or replacement parts, Argentina does not recognize that these articles have no value but will accept a lower value than that under a traditional sale.

It is therefore important that valuations remain consistent both for customs entry purposes as well as in the event a customs challenge related to the value, and hence the duties and taxes paid to the government, needs to be resolved.

It should be noted that Argentina customs has been known to look to historic import data and customer price lists of third party companies when making a challenge in an effort to collect higher tax and duty revenues. 

Next Steps

Exporting to Argentina and experiencing shorter customs clearance times may be possible with some advance preparation.  If this is something you would like to explore, post your questions and/or comments below.