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Bonds

Definition of Bonds terminologies

Bond

According to the World Customs Organisation (WCO) Glossary of International customs terms 2018, a bond is “an undertaking in due legal form, by which a person binds himself to the Customs to do or not to do some specified act”.

It is a legal contract executed under a seal whereby the person or persons entering into it bind themselves to pay a specified amount of money if any of conditions of the contract are not satisfied.

The bond simply guarantees that Customs will collect all import duties, taxes, fines or penalties from the surety company, if they cannot collect them from the importer.

• Bank guarantee

This is a requirement for payment under dispute where the principal decides to execute a bond (of the amount in dispute) instead of paying in cash. Its validity depends on the use.

• Bond Reinstatement

A bond may be reinstated due to various reasons for example, due to successful accounting of transactions covered by the bond. In iCMS (Integrated Customs Management System), a bond reinstatement notice is send to the bond applicant.

• Bond Suspension

A bond may be suspended due to various reasons for example, due to failure to account for the transactions covered by the bond. In iCMS, a bond suspension notice is send to the bond applicant.

• Surety/guarantor

The person who undertakes to pay the bond if the principal fails not only to fulfill the conditions but also to pay the penalty to bond. These are normally the insurance companies or banking institutions.

• Custom Security Bond

Contract executed under seal whereby the party or parties entering into it bind themselves to pay to The Commissioner of Customs a specified sum of money, referred to as the penalty to the bond, if any of the conditions of the bond are not satisfied. The obligation in all security bonds is joint and several.

• Principal

The person who undertakes to fulfill the conditions of the bond and pay the penalty of the bond if any of the conditions of the bond are not satisfied. They are normally the importers or their agents.

Household Goods and Personal Effects

First Arrivals

Personnel arriving for a new contract into the country are exempted from paying taxes on their personal effects/household goods and one motor vehicle under part A paragraph 4 of the 5th Schedule of the East Africa Community Customs Management Act 2004, provided that the contract is for a term not less than two years. The paragraph provides for the conditions and limitations for such importation.

Used household goods and personal effects are duty exempt provided goods have been owned and used by the client for a minimum of one year and goods are imported within three months of the Work Permit being issued.

Items cannot be sold, lent or otherwise disposed-off during stay of a client who is under work permit.

Returning Residents

Returning Kenyans are exempted from paying taxes on their personal effects part B paragraph 5 of the 5th Schedule of the East Africa Community Customs Management Act 2004. The paragraph provides for the conditions and limitations. Among them,

• If you are intending to change residence to come back to Kenya, you must be over 18 years old. We shall verify your supporting documents which may include your passport, Alien ID, work permits etc.
• Original Valid passport used for the last 2 years or any previous passport other than the current passport. (The entry and exit stamps are used by customs to check the compliance of the regulation).
• Must have proof of living abroad for two years and have their effects imported within 3 months of arrival.

Under the Same Schedule, returning residents are also allowed, one motor vehicle (excluding buses and mini buses) into the country duty free subject to the following conditions:

• The importer must be changing residence and not just been out of the country merely on temporary nonresidential visit.
• The Importer must be over 18 years old.
• The individual must have personally owned and personally used the motor vehicle outside Kenya for at least twelve months (excluding the period of the voyage in the case of shipment) prior to importing the motor vehicle. As an importer, we shall verify this when you furnish us with your original passport.

Left Hand Drive Vehicles for Returning Residents

A Kenyan Resident returning from a country that operates Left Hand Drive (LHD) motor vehicles shall be allowed to import a replacement Right Hand Drive (RHD) vehicle from any other source subject to the following conditions:

• The person must be bona fide changing residence (Permanently) from a place outside Kenya and not merely making temporary visits back home.
• The person must fulfill all the requirements for importation of personal and household effects by a returning resident as outlined under paragraph 5 of part B of the 5^th schedule to the east African Community Customs Management Act, 2004.
• The returning resident must proof that he/she owned and personally used a LHD vehicle in the country of former residence for a period of at least one year, prior to his/her return.
• The returning resident must provide proof of disposal (Transfer of ownership) of the previous owned LHD vehicle before changing residence from the former country of residence.
• The current retail selling price (CRSP) of the RHD replacement vehicle shall not exceed that of previously owned LHD vehicle.
• Both the previously owned LHD vehicle and the RHD replacement vehicle shall not be of any of the following categories: -
  • Bus or Minibuses of a seating capacity of more than 13 passengers
  • Load carrying vehicles of load carrying capacity exceeding two tones
• The replacement vehicle must comply with the Kenya Bureau of Standards requirements of Legal Notice No. 78 of 15th July 2005 (Verification of Conformity to Kenya Standards Imports Order, 2005) and KS1515:2000 Kenya Standard Code of Practice for Inspection of Road Vehicles.

These guidelines shall only apply to residents returning from countries that operate LHD motor vehicles who had previously owned and used a LHD vehicle in the country of former residence.

Required Documents:

Supporting documents should be attached including but not limited to:

• Passport - original, (if issued within last 2 years, the old passport is also required)
• Residence Visa/Work Permit - original
• PIN Certificate ? obtained through the Kenya Revenue Authority
• Bill of Lading/Air Waybill ? original
• Comprehensive Valued Inventory ? 3 copies, detailed per box /boxes numbered, signed by owner
• Comprehensive Packing List
• Authority letter ? Nominating a licensed customs clearing agent to act on their behalf
• Original logbook from country of importation in case of motor vehicle

Diplomat Status

Diplomatic goods are not subject to inspection with the approved Pro1b form. Diplomats must be present in Kenya when shipment arrives.

Required Documents

• Passport - Original
• PRO IB Forms ? approved by Ministry of Foreign Affairs, exempts diplomat from inspection
• PRO IA Form ? required if importing alcohol, approved by Ministry of Foreign Affairs
• Comprehensive inventory ? all high-tech equipment, computers, electronics, stereos etc.
• PIN certificate

Importation of Pets

Dogs & cats are allowed with approved import permit; they are dutiable but exempt from VAT.

Pet birds are prohibited.

Required Documents

• Import Permit ? obtained from Veterinary Department, Kabete, Nairobi prior to departure.
• Pet Owner?s Passport.
• Certificate of Vaccination ? including rabies, must be current.
• Health Certificate - by a Veterinarian.

What are the requirements to enable me travel across Kenyan borders by road with a personal car?

For Kenyan residents traveling with a vehicle registered in Kenya, you will have to deposit your logbook with Customs at the point of exit or border and collect it upon re-entry into the country.

For foreigners, a carnet de passage has to be used. This document is obtained from Automobile Association of any country. It contains a list of countries it can be used.

Importing a Motor Cycle

Test

Importing a Motor Cycle

Test

About Importing

Import means to bring or cause to be brought into the Partner States from a foreign country. Importation of any commodity into the country will require that you enlist the services of an accredited customs clearing agent. The clearing agent is mandated to process the importation documents on the ICMS system and assist in clearing goods on your behalf.

All imports procured by Kenyan-based importers must be insured with companies licensed to conduct business in Kenya. Importation of animals, plants, and seeds are subject to quarantine regulations.

Importing

Learn about your obligations while importing vehicles, motor cycle and other goods.

Exemptions on Importation

• Materials used for the preparations for cleaning dairy apparatus - Surface-active preparations and washing preparations whether or not containing soap, specially prepared for cleaning dairy apparatus.
• Mosquito nets and materials for the manufacture of mosquito nets.
• Seeds for Sowing.
• Chemically defined compounds used as fertilizers.
• Museums, Exhibits and Equipment.
• Horticulture, Agriculture or Floriculture Inputs.
• Education, Educational Articles and Materials.
• Inputs for use in the manufacture of agricultural.
• Relief goods imported for emergency use in specific areas where natural disaster/calamity has occurred for emergency relief purposes by organization such as UN or a relief agency. The importation shall be made within 6 months not exceeding 12 months.
• Hotel Equipment or goods engraved or printed or marked with the hotel logo imported for hotel use.
• Speed Governors.
• Computer software, any media containing computer software.
• Electrical Energy saving bulbs for lighting with power connecting cap at one end.
• Specialised Solar equipment and accessories.
• Motor vehicles specially designed for refuse/garbage collection and disposal imported or purchased by local authorities or persons contracted by the local authorities to collect refuse/garbage.

How to Import

Duties and taxes are levied on any imported and exported goods before releasing them from Customs; except goods qualifying for special privilege according to the laws and regulations, whereby their duties and taxes are exempted.

To import any goods such as cars or machinery requires the engagement of a customs clearing agent.

When engaging with your preferred clearing agent ensure you always have:

• Import Declaration Forms (IDF)
• Customs declaration (Entry)
• A Certificate of Conformity (CoC) from the PVoC agent for regulated products
• an import standards mark (ISM) when applicable
• valid Commercial invoices from the exporting firm
• valid pro forma invoices from the exporting firm

The customs clearing agent is then allowed to declare the goods you are importing on the customs portal known as SIMBA.

Authorized Economic Operators (AEO)

AEO is a World Customs Organisation Best practice, Customs Business model designed to reward players involved in the international supply chain who have demonstrated to be reliable partners of Customs.

These partners must have a track history of compliance to Customs laws and regulations over time.

Eligibility to join AEO is currently open to 2 categories;

• Clearing Agents
• Importers/Exporters/Manufacturers