WORLD TRADE
ORGANIZATIONG/VAL/N/1/KEN/1
21 January 2002
(02-0302)
Committee on Customs Valuation Original:  English
NOTIFICATION UNDER ARTICLE 22 OF THE
AGREEMENT ON IMPLEMENTATION OF ARTICLE VII OF
THE GENERAL AGREEMENT ON TARIFFS AND TRADE 1994
KENYA
The following communication, dated 9 January 2002, has been received from the Permanent
Mission of Kenya.
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In accordance with the Decision of the Committee on Customs Valuation of 12 May 1995, I
have the honour to notify the Committee on Customs Valuation of the legislation1 of Kenya relevant
to customs valuation, as contained in clauses 10 and 17 of the Finance Act 2000, a copy of which is
attached.
                                                     
1 In English only.G/VAL/N/1/KEN/1
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Value of Imported Goods, Excisable Goods, and Goods for Export
Determination of
value of importedgoods127.(1) The value of imported goods, whether exempt from duty, liable to specific
duty or liable to ad valorem  duty, shall be as laid down in the Seventh
Schedule.
8 of 1985, s.3
4 of 1983, s.12
5 of 1998, s.7(2) In the case of goods imported under a contract of sale, the price paid or
payable on that sale shall be deemed to be the value;
Provided that the price is properly adjusted to take account of
circumstances which differ from a sale as is contemplated by the SeventhSchedule
(3) The rate of exchange to be used for determining the equivalent in Kenya
currency of any foreign currency shal l be the prevailing current selling rate
of sight drafts as last notified by the Central Bank, or the rate applied bybanks or financial institutions, whichever is the higher, when an entry is
presented and accepted by the proper officer in accordance with section
127A.
(4) Notwithstanding subsection (3), the rate applicable shall be further
determined by the Commissioner as the weighted average of the prevailing
selling rates in force during the previous week and, subject to any official
revaluation or devaluation of any currency as notified by the Central Bank,
shall remain valid throughout the week.
(5) Notwithstanding subsection (3) and (4) and section 127A, the Minister
may, by notice in the Gazette, declare the rate of exchange to be used from
time to time in determining the equivalent in Kenya currency of any
foreign currency.
(6) Subject to subsections (3) and (4), the Commissioner may require any bank
or financial institution to submit details or any information in respect of therates of exchange of foreign currency and such details or information shall
be given immediately.
(7) Any bank or financial institution which fails to comply with subsection (6)
shall be guilty of an offence.
(8) Where an entry has been checked and accepted by the proper officer, the
duty payable shall be paid within five days from the date of the acceptance,
and in default a new assessment of the value shall be determined in
accordance with subsections (3) and (4).
Determination of
value of goodsfor export10 of 1986, s.69 of 1992, s.10
4 of 1993, s.13
5 of 1998, s.8127A (1) The value of goods for export, whether exempt from duty, liable to
specific duty or liable to ad valorem  duty, shall include:
(a) the cost of the goods to the buyer outside Kenya;
(b) packing charges;
(c) transport and all other charges up to the time of delivery of the 
goods on board the exporting aircraft or vessel, or at the place of 
exit from Kenya;G/VAL/N/1/KEN/1
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(d) any levy, excess, duty or tax
(2) In the case of goods for re-exportation, the value shall include:
(a) the landed cost at the time of importation;
(b) all other charges, including transport up to the time of the delivery
of the goods or, board the exporting aircraft or vessel or to the
place of exit from Kenya.
(3) The rate of exchange to be used for determining the equivalent in Kenya
currency of any foreign currency shall be the prevailing current buying rate
of sight drafts as last notified by the Central Bank, or the rate applied bybanks or financial institutions, whichever is the higher, when an entry is
presented and accepted by the proper officer in accordance with section 63.
(4) Notwithstanding subsection (3), the rate applicable shall be further
determined by the Commissioner as the weighted average of the prevailingbuying rates in force during the previous week and, subject to any official
revaluation or devaluation of any currency as notified by the Central Bank,
shall remain valid throughout the week.
(5) Subject to subsections (3) and (4), the Commissioner may require any bank
or financial institution to submit details or any information in respect of the
rates of exchange of foreign currency and such details or information shall
be given immediately.
(6) Any bank or financial institution which fails to comply with subsection (5)
shall be guilty of an offence.
(7) Where an entry has been checked and accepted by the proper officer, the
duty payable shall be paid within five days from the date of the acceptance,
and in default, a new assessment of the value shall be determined inaccordance with subsections (3) and (4).
Appraisal of
value of imported
goods, etc.
10 of 1988, s.11.4 of 1999, s.10127B (1) Notwithstanding any other provisions of this Act, where the proper
officer, or any other officer authorized by the Commissioner, has reason to
believe that the value of the imported goods or goods for export or goods
for re-exportation is below or above the transaction value, the proper
officer or authorized person shall appraise in accordance with the methodsset out in the Seventh Schedule.
(2) A certificate of the appraised value given under the hand of the proper
officer or other persons authorized by the Commissioner shall be prima
facie evidence of the value of those goods.
(3) Upon written request, the importer shall be entitled to an explanation, in
writing, from the proper officer or person authorized by the Commissioner
as to the method applied in appraising the goods pursuant to this section.
(4) Where a dispute arises regarding the decision of the proper officer or other
persons authorized by the Commissioner under the foregoing subsections,
the importer or other person liable for the payment of duty may withinG/VAL/N/1/KEN/1
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thirty days of the day he is notified of the decision, appeal to the Tribunal
established under section 127E.
(5) The Tribunal shall consider and determine every appeal made under
subsection (4) shall cause his decision thereon to be served upon theappellant specifying reasons therefor.
(6) A person aggrieved by a decision of the Tribunal under subsection (5) may
appeal to the High Court within fourteen days.
(7) An importer may remove goods subject to an appraisal under this section
from customs authority pending final determination of the value thereof bythe proper officer or other person authorized by the Commissioner upon
payment of a cash deposit equivalent to the assessed duty, and any excess
thereof shall be refunded within thirty days from the date of final
determination of duty payable.
(8) The Commissioner shall cause to be kept records of all administrative and
judicial decisions taken under this section in conformity with the
Agreement on Customs Valuation.
(9) In this section, the expression "Agreement on Customs Valuation" refers to
the Agreement on Implementation of Article VII of the General Agreement
on Tariffs and Trade on Customs Valuation signed in Marrakesh,
Morocco, on the 15
th April 1994.
Value of goods
far excise dutypurposes8 of 1991, s.11,4 of 1993, s.14,6 of 1994, s.4127C . (1) The value of imported goods for purposes of levying excise duty shall be
the sum of:
(a) the value of such goods ascertained for the purpose of import duty,
and,
(b) the amount of import duty, suspended duty and dumping duty if
any.
(2) The value of locally manufactured goods for purposes of levying ad
valorem  excise duty shall be the ex-factory selling price.
(3) For the purposes of subsection (2), the ex-factory selling price shall
include:
(a) The cost of any wrapper, package, box, bottle or other container in
which the excisable goods are packed;
(b) the cost of any other goods contained in or attached to the
wrapper, package, box, bottle or other container; and
(c) any other cost incidental to the sale of the goods including
advertising, financing, warranty, commission, transportation,mark-up or any other cost incurred related to delivery to the point
of sale.
(4) Notwithstanding subsection (3)b., the cost of returnable containers shall be
excluded from the excisable value.
Preshipment
inspection of127D. (1)Notwithstanding any other provision of the Act, the Minister may, by,
notice in the Gazette, prescribe certain imported goods which shall beG/VAL/N/1/KEN/1
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imported goods
8 of 1996, s.4subject to pre-shipment inspection.
(2) The Commissioner may appoint any person for the purposes of conducting
pre-shipment inspection of the goods prescribed under subsection (1).
(3) An appointment under subsection (2) shall be subject to such terms and
conditions as may be agreed in writing between the Government and the
appointed person.
(4) A person appointed under subsection (2) shall, on completion of
pre-shipment inspection of any goods, issue a certificate of such inspection
to the Commissioner and to the importer.
(4A) Goods in respect of which a certificate has been issued under subsection
(4) shall not be subjected to any further inspection except by a proper
officer.
(5) A person, who, at the commencement of this section is appointed by the
Minister to conduct pre-shipment inspection, shall be deemed to be aperson appointed by the Commissioner and to the importer.
(6) In this section, the expression "pre-shipment inspection" means the
examination of imported goods prior to shipment in order to ascertain the
description, quality, quantity and the value of such goods.
Establishment of
Appeals Tribunal127E . (1) The Minister shall, by order publish in the Gazette, establish an Appeals
Tribunal for purpose of hearing appeals under section 127B.
(2) The Tribunal shall consist of a Chairman and not less than four but not
more than six members who shall be appointed by the Minister and who
shall hold office for such period and upon such terms and conditions as theMinister may determine.
(3) The quorum for meeting of the Trib unal shall be the Chairman and two
other members.
(4) All matters before the Tribunal shal l, in the event of a difference of
opinion, be decided by the votes of the majority of the members thereof.
127F . (1) A person shall, before filing an appeal with the Tribunal, deposit with the
Commissioner the full duty assessed under section 127B.
(2) Any duty deposited with the Commissioner under subsection (1) shall,
where the decision of the Tribunal or the High Court, as the case may be,
is in favour of the aggrieved persons, be refunded to such person, less the
amount of duty which was not disputed.
(3) On hearing an appeal, the Tribunal shall have all the powers of a
subordinate court of the first class to summon witnesses, to take evidence
upon oath or affirmation and to call for the production of books and other
documents.G/VAL/N/1/KEN/1
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(4) Where the Tribunal considers it desirable for the purpose of avoiding
expense or delay or any other special reasons to do so, it may receive
evidence by affidavit and administer interrogations and require the person
to whom the interrogations are administered to make a full and true reply
to the interrogations within the time specified by the Tribunal.
(5) In its determination of any matter the Tribunal may take into consideration
any evidence which it considers relevant to the subject of an appeal before
it, notwithstanding that the evidence would not otherwise be admissible
under the law relating to evidence.
(6) The Tribunal shall have the power to award the costs of any proceedings
before it and to direct that such costs be taxed in accordance with any scale
prescribed for suits in the High Court or to award a specified sum of costs.
(7) All summons, notices or other documents issued under the hand of the
Chairman of the Tribunal shall be deemed to be issued by the Tribunal.
(8) Any interested party may be represented before the Tribunal by an
advocate or by any other person whom the Tribunal may, in its discretion,
admit to be heard on behalf of the party.
(9) Any person summoned by the Tribunal to attend and give evidence or to
produce any records, books of account, statements, or other documents, or
required to answer interrogations and who without sufficient cause:
(a) refuses or fails to attend at the time and place mentioned in the
summons served on him; or
(b) refuses or fails to answer fully and satisfactorily, to the best of his 
knowledge and belief all questions lawfully put to him by or with 
the concurrence of the Tribunal, or
(c) refuses or fails to produce any records, books of account,
statements or other documents which are in his possession orunder his control mentioned or referred to in any summons served
on him.
Shall be guilty of an offence and liable to a fine not exceeding fifty
thousand shillings, or to imprisonment for a term not exceeding two years
or both.
(10) Where the Tribunal awards costs in any appeal, it shall, on application by
the person to whom the costs are awarded, issue to him a certificate stating
the amount of costs.
Cap.40. (11) Every certificate issued under subsection (10) may be filed in the High
Court by the person in whose favour  the costs have been awarded and
upon being so filled shall be deemed to be a decree of the High Court and
may be executed as such provided that an order for costs against the
Government shall not be enforced save in the manner provided for by the
Government Proceedings Act.
Cap.21 (12) The Chief Justice may make rules governing appeals and providing for the
fees to be paid, the scale of costs of any such appeal, the procedure to be
followed therein and the manner of notifying the parties thereto; and untilG/VAL/N/1/KEN/1
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such rules are made, and subject thereto, the provisions of the Civil
Procedure Act shall apply as if the matter appealed against were a decree
of a subordinate court exercising original jurisdiction.
(13) Where in any suit for the recovery of any tax, or other amount payable
under this Act, the Court is satisfied that any party to the suit has appeal to
the Tribunal, the Court shall on such conditions as it may think fit stay the
proceedings in the suit pending the determination of the appeal.
SEVENTH SCHEDULE
VALUE OF IMPORTED GOODS
(s127B)
The customs value of imported goods shall be determined through application of the
following Articles in the sequence indicated except where otherwise stated.
ARTICLE 1
Value of the Goods
The customs value of imported goods shall be the price actually paid or payable for the goods
when sold for export to Kenya, adjusted in accordance with the provisions of Article 8, provided:
(1)(a) That there are no restrictions as to the disposition or use of the goods by
the buyer other than restrictions which:
(i) are imposed or required by law;
(ii) limit the geographical area in which the goods may be resold; or
(iii) do not substantially affect the value of the goods; and
(b) That the price is not subject to some condition or consideration for which a value cannot be
determined with respect to the value of the goods being valued.
(c) That no part of the proceeds of any subsequent resale, disposal or use of the goods by the
buyer will accrue directly or indirectly to the seller, unless an appropriate adjustment can be
made in accordance with the provisions of Article 8; and
(d) That the buyer and seller are not related, or where the buyer and seller are related, that the
transaction value is accepted for customs purposes under the provisions of paragraph (2).
(2)(a) (i) in cases where the buyer and the seller are related, within the meaning of Article 15,
the transaction value shall be accepted provided that the relationship did not influence
the price;
(ii) where the customs has grounds for considering that the relationship influenced the
price of the goods, it shall communicate the grounds in writing to the importer and
shall afford reasonable time for the importer to respond thereto.
(b) The customs shall accept the transaction value in a sale between related persons where the
importer demonstrates that such value closely approximates to one of the following occurring
at or about the same time:G/VAL/N/1/KEN/1
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(i) the transaction value in sales by the same party to unrelated buyers of identical or
similar goods sold for export to Kenya;
(ii) the customs value of identical or similar goods as determined under the provisions of
Article 5;
(iii) the customs value of identical or similar goods as determined under the provisions of
Article 6.
(c) In applying the foregoing tests, due account shall be taken of demonstrated differences in
commercial levels, quantity levels, the elements enumerated in Article 8 and costs incurred by
the seller in sales in which the seller and the buyer are related.
(d) The tests set forth in paragraph (2)(b) shall be applied at the initiative of the importer and only
for comparison purposes.
ARTICLE 2
Transaction Value of Identical Goods
(1)(a) If the customs value of imported goods cannot be determined under the provisions of
Article 1, the customs value shall be the transaction value of identical goods sold by other
sellers for export to Kenya at or about the same time as the goods being valued.
(b) Under this Article, the transaction value of goods shall be:
(i) the transaction value of identical goods in a sale at the same commercial level and in
substantially the same quantity as the good being valued;  or shall be used to
determine the customs value;
(ii) where no such sale is found, the transaction value of identical goods sold at a
different commercial level or in different quantities adjusted to take account of
differences attributable to commercial level or to quantity.
Provided that such adjustments are made on the basis of demonstrated evidence
which establishes the reasonableness and accuracy of adjustment, whether the
adjustment leads to an increase or a decrease in the value.
(2) Where the cost and charges refereed to in paragraph (2) of Article 8 are included in the
transaction value, an adjustment shall be made to take account of significant differences in cost and
charges between the imported goods and the identical goods in question arising from differences in
distances and mode of transport.
(3) If, in applying this Article, more than one transaction value of identical goods is found, the
lowest such value shall be used to determine the customs value of the imported goods being valued.
ARTICLE 3
Transaction Value of Similar Goods
(1)(a) If the customs value of the imported goods cannot be determined under the provisions of
Articles 1 or 2, the customs value shall be the transaction value of similar goods sold forexport to Kenya and exported at or about the same time as the goods being valued.
(b) Under this method, the transaction value shall be determined using:G/VAL/N/1/KEN/1
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(i) the transaction value of similar goods in a sale at the same commercial level and in
substantially the same quantity as the goods being valued; or
(ii) the transaction value of similar goods sold at a different commercial level or in
different quantities adjusted to take account of differences attributable to commercial
level or to quantity:
Provided that such adjustments are on basis of demonstrated evidence which
establishes the reasonableness and accuracy of the adjustment, whether the
adjustment leads to an increase or decrease in value.
(2) Where the cost and charges referred to in paragraph (2) of Article 8 are included in the
transaction value, an adjustment shall be made to take account of significant differences in such costsand charges between the imported goods and the similar goods in question arising from differences in
distances and modes of transport.
(3) If, in applying this Article, more than one transaction value of similar goods is found, the
lowest such value shall be used to determine the customs value of the imported goods being valued.
ARTICLE 4
Where the customs value of imported goods cannot be determined under the provisions of
Articles 1, 2 or 3, Articles 5 and 6 may be applied, and the sequence of application shall be reversed atthe request of the importer.
ARTICLE 5
Deductive Value
(1)(a) If the imported good or identical or similar imported goods are sold in Kenya in the same
condition as they were imported the customs value of the imported goods under the
provisions of this Article shall be based on the unit price at which the imported goods or
identical or similar goods are sold in the greatest aggregate quantity, ar or about the time of
importation of the goods being appraised, to persons who are not related to the persons from
whom they buy such goods, subject to deductions for the following:
(i) either the commissions usually paid or agreed to be paid or the additions usually
made for profit and general expenses in connection with sales of such goods or goods
of the same class or kind imported into Kenya;
(ii) the usual costs of transport and insurance and associated costs within Kenya territory;(iii) where the appropriate, the costs and charges referred to in paragraph (2) of Article 8;
and
(iv) the customs duties and other national taxes (Value Added Tax, excise, etc.) payable
in Kenya by reason of importation or the sales of the goods.
(b) If neither the imported goods nor identical nor similar imported goods are sold at or about the
same time of importation as the goods being appraised, the customs value shall, subject to the
provisions of paragraph (1)(a) be based on the unit price at which the imported goods or
identical or similar imported goods are sold in Kenya in the same condition as imported at the
earliest date after importation of the goods being appraised but before the expiration of ninetydays after such importation.
(2) If neither the imported goods nor identical nor similar imported goods are sold in Kenya in
the same conditions as imported, then, if the importer so requests, the customs value shall be based onG/VAL/N/1/KEN/1
Page 10
the unit price at which the imported goods, after further processing are sold in the greatest aggregate
quantity to persons in Kenya who are not related to the persons from whom they bought such goods,
due allowance being made for the value added by such processing and the deductions provided for in
paragraph 1(a).
(3) The term "unit price at which goods are sold in the greatest aggregate quantity" means the
price at which the greatest number of units is sold in sales to persons who are not related to the
persons from whom they bought such goods at the first commercial level after importation at which
such sales take place.
ARTICLE 6
Computed Value as Value for Duty
(1) Subject to provisions under this Article, the value for customs purposes shall be based on the
computed value.  The computed value of goods being appraised is the aggregate of amounts equal to:
(a) Subject to paragraph (2), the cost, charges and expenses incurred  in respect of, or the value
of:
(i) materials employed in producing the goods being appraised; and
(ii) the production or other processing of the goods being appraised; and determined in
the manner prescribed; and
(b) The amount, determined in the manner prescribed, for profit and general expenses considered
together as a whole, that is generally reflected  in sales for export into Kenya of goods of the
same class or kind as the goods being appraised made by the producer in the country ofexport.
(2) Without limiting the generality of paragraph (1)(a) the cost charges, expenses, and value
referred to in that paragraph include:
(i) the cost or value of materials and fabrication or other processing employed in
producing the imported goods;
(ii) an amount for profit and general expenses equal to that usually reflected in sales of
goods of the same class or kind as the goods being appraised which are made by
producers in the country of exportation for export to Kenya;
(iii) the cost or value of all other expenses necessary to reflect adjustment in paragraph (2)
of Article 8.
(3) To allow access to any account or other record for the purposes of determining a computed
value the importer shall maintain proper books of account, (including sales contract, purchase orders,
invoices or agreements) and shall be responsible fo r the information supplied by the seller of the
goods being appraised.  However, the Commissioner as provided under Section 8 of this Act shallverify information supplied by the producer of the goods, through the importer in the country of
export.
ARTICLE 7
(1) If the customs value of the imported goods cannot be determined under the provisions of
Articles 1 through 6, the customs value shall be determined using reasonable means consistent with
the principles and general provisions of the World Trade Organization (WTO) Agreement on CustomsG/VAL/N/1/KEN/1
Page 11
Valuation and of Article VII of GATT 1994 and on the basis of available data collected by customs or
supplied by the importer.
(2) However, no customs value shall be determined under the provisions of this Act on the basis
of:
(a) the selling price of identical or similar goods produced in Kenya;(b) a system which provides for the acceptance for customs purposes the higher of two alternative
values;
(c) the price of goods on the domestic market of the country of exportation;(d) the cost of production other than computed values which have been determined for identical
or similar goods in accordance with the provisions of Article 6;
(e) the price of goods or export to another coun try other than Kenya from the country of export;
(f) minimum customs values;  or(g) arbitrary or fictitious values.
(3) If the importer so requests, the importer shall be informed in writing of the customs value
determined under the provisions of this Act and the Article used to determine such value.
ARTICLE 8
(1) In determining the customs value under the provisions of Article 1 of this Schedule there shall
be added to the price paid or payable for imported goods:
(a) The following, to the extent they are incurred by the buyer but are not included in the
transaction price:
(i) commissions and brokerage, except buying commissions;
(ii) the cost of containers which are treated as being one for customs purposes with the
goods in question;
(iii) the cost of packing whether for labour or materials.
(b) The value apportioned as appropriate, of the following goods and services where supplied
directly or indirectly by the buyer free of charge or at reduced cost for use in connection with
the production and sale for export of the imported goods to the extent that such value has not
been included in the transaction value:
(i) material, components, parts and similar items incorporated in the imported goods;
(ii) tools, dies, moulds and similar items used in the production of the imported goods;
(iii) material consumed in the production of the imported goods, engineering,
development, artwork, design work, and plans and sketches undertaken elsewhere
than in Kenya and necessary for the production of the imported goods.
(c) Royalties and licence fees related to the goods being valued payable by the buyer, to the
extent that such royalties and fees are not included in the transaction value.G/VAL/N/1/KEN/1
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(d) The value or any part of the proceeds of any subsequent sale, resale, disposal or use of the
imported goods that accrues directly or indirectly to the seller.
(e) The freight cost or the cost of transport of the imported goods to the port of discharge (point
of entry).
(f) The handling charges associated with the transport of the goods to the port or place of
importation.
(g) The cost of insurance to either marine or aviation or overland risk.(h) Other costs associated to the transport of the imported goods.(2) Additions to the price paid or payable shall be made under this Act only on the basis of
objective and quantifiable data.
(3) No additions shall be made to the price or payable in determining the customs value except as
provided under this Schedule.
ARTICLE 15
Related Persons
(1) For the purposes of this Act, persons shall be deemed to be related if:
(a) They are officers or directors of one another's businesses.
(b) They are legally recognized partners in business.
(c) One is an employee of the other.(d) One person directly or indirectly owns, controls or hold five percent or more of the
outstanding voting stock or shares of both of them.
(e) One of them directly or indirectly controls the other.
(f) Both of them are directly or indirectly controlled by a third person; or(g) Together they directly or indirectly control a third;  or(h) They are members of the same family.
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