What are Customs Auction Sales?
A customs auction sale is the sale of goods to the highest bidder so as to dispose of goods not lawfully removed from the Customs Warehouse after a certain period.
What Law supports the existence of Public Auctions?
Section 42 of the East Africa Community Customs Management Act, 2004 authorises the Customs Warehouse keeper to sell any goods deposited in the Customs Warehouse subject to a number of procedures.
At What point are goods eligible for Auction?
After 21 days, goods that have not been entered or removed are moved to the Customs Warehouse. Thereafter, if they are not removed within 30 days then the Customs Warehouse keeper shall give a notice that unless those goods are removed within 30 days of the day of notice they shall be deemed abandoned and therefore eligible for auction.
What categories of goods are eligible for auction?
All goods that are not prohibited or restricted are eligible for auction.
How is the disposal of goods categorised?
Goods are disposed if they are in accordance with the following:
- Seized goods – disposed once the goods are condemned (determined to be unfit for use)
- Abandoned goods – May also include perishable goods, prohibited goods or goods imported by the government.
- Unclaimed baggage.
- Firearms and ammunition – if not cleared lawfully prior/during importation. They are surrendered to the firearms bureau or the police.
- Postal packages for re-exportation – if re-exportation does not take place lawfully.
What are Conditions for Sale?
Conditions for sale are guidelines applied at all Customs Auctions Sales based on legal provisions in the East Africa Community Customs Management Regulations. These conditions must be read out in either English or Swahili at the beginning of every auction and all bidders are bound by these conditions. The auctioneer sets the conditions for that day.
Can goods be withdrawn before a sale?
Yes, the owner of any goods advertised may write to the commissioner and notify him/her of the particulars of the goods he wishes to have withdrawn and satisfy the commissioner that they are the owners of the goods. This must be done in not less than seven days to the day of the sale.
Goods can also be withdrawn if they are entered (declared and taxes duly paid) before the day of the auction. Goods are deemed to belong to the owner until the day of the auction/notice period elapses.
How is the value of these goods determined?
Officers from the valuation branch are invited to assess individual values for each of the items on the list. The full customs value (Cost, Insurance, Freight (CIF) price) is usually taken as the value but if the goods have deteriorated, the value may adjust accordingly. Duty liable for the said item is also taken into consideration.
What is the reserve price?
The reserve price (duty+taxes) is to be fixed at a reasonable level taking into account the value and duty on the goods and the circumstances of sale and should reflect the lowest price of which the Valuation Officer considers the goods should be sold. For example, for goods of a C.I.F. invoice value of Shs.120/-, and liable to duty 25%, the total value and duty is Shs.155 - but taking into account the type of goods and circumstances of sale, the Valuation officer may consider that they will fetch only shs.100/- and that amount will therefore be the reserve price.
Which kind of goods are subject to special conditions?
Perishable goods because of their nature are subject to special conditions such as immediate auction.
What happens to the proceeds from auctions?
Proceeds from auctions are used for either of the following purposes:
- Payment as duty and taxes.
- To meet the cost of the auction.
- Payment of rent for where the cargo is held.
- Cargo handling charges.
**if there is any balance from the proceeds then an owner can claim it if they are able to satisfy the Commissioner that the inability to enter the goods was as a result of circumstances beyond their control.