WORLD TRADE
ORGANIZATIONG/SCM/Q3/KEN/8
23 October 2002
(02-5802)
Committee on Subsidies
and Countervailing MeasuresOriginal:  English
SUBSIDIES
Requests Pursuant to Article 27.4 of the Agreement
on Subsidies and Countervailing Measures
Replies to Follow-Up Questions Posed by the UNITED STATES1
Regarding the Notification of KENYA2
The following communication, dated 14 October 2002, has been received from the Permanent
Mission of Kenya.
_______________
Question
The following questions are submitted in respect to the request by Kenya to reserve its
rights to use the procedures contained in G/SC M/39 to request an extension of the transition
period for export subsidies under Article 27.4 of the Agreement on Subsidies and
Countervailing Measures Agreement (ASCM).  These questions are submitted without
prejudice to our final position.  We reserve the right to ask further questions.
Export Processing Zones
Export Promotion Programme under Customs and Excise RegulationsManufacture under Bond
Could Kenya please provide the implementing legislation, and any relevant
amendments, for each of these programmes?
Reply
Following communication from your delegation dated 28 May 2002 and contained in
document G/SCM/Q3/KEN/7, we are pleased to forward the implementing legislation for the
following three programmes:
- Export Processing Zones
- Export Promotion Programme under Customs and Excise Regulation
- Manufacture under Bond
                                                     
1 G/SCM/Q3/KEN/7
2 G/SCM/N/74/KEN and G/SCM/Q3/KEN/6.G/SCM/Q3/KEN/8
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TABLE OF CONTENTS
Page
EXPORT PROCESSING ZONES ACT, CHAPTE R 5175 ............................................................5
EXPORT PROMOTION PROGRAMME UNDER CUSTOMS AND EXCISE
REGULATIONS, EXPORT PROMOTION OFFICE ............................................................22
CUSTOMS AND EXCISE ACT, CAP 472, PART IVA
MANUFACTURE UNDER B OND .................................................................................28
FINANCE BILL,  1988......................................................................................................30G/SCM/Q3/KEN/8
Page 3
LAWS OF KENYA
CHAPTER 517
THE EXPORT PROCESSING ZONES ACT
ARRANGEMENT OF SECTIONS
PART I – PRELIMINARY
Section
1. Short title
2. Interpretation
PART II – THE EXPORT PROCESSING ZONES AUTHORITY
3. Establishment and membership of the Export Processing Zones Authority
4. Meetings and procedures of the Authority
5. Seal and execution of documents6. Appointment of the chief executive of the Authority
7. Appointment and remuneration of the staff
8. Protection from legal action
9. Objectives of the Authority
10. Power of the Authority to make rules11. General fund and annual budget of the Authority
12. Accounts, etc. of the Authority
13. Disclosure of information
14. Committees
PART III – EXPORT PROCESSING ZONES
15. Declaration of export processing zones
16. Facilities, etc. within an export processing zone
17. Activities permitted within an export processing zone
18. Power of Minister to make rules
PART IV – LICENSING PROVISIONS
19. Licences
20. Register of licences
PART V – EXPORT PROCESSING ZONE DEVELOPERS AND OPERATORS
21. Qualifications of export processi ng zone developers and operators
22. Power of export processing zone developers and operators
PART VI – EXPORT PROCESSING ZONE ENTERPRISES
23. Establishment of export processing zone enterprisesG/SCM/Q3/KEN/8
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PART VII – OPERATORS WITHIN EXPORT PROCESSING ZONES
24. Goods deemed to be exported and imported into Kenya
25. Goods within an export processing zone
26. Prohibited activities within the export processing zone27. Removal of goods from the export processing zone;  etc.
28. Exchange controls on receipts and payments of export processing zone enterprises
PART VIII – BENEFITS TO EXPORT PROCESSING ZONES ENTERPRISES, ETC.
29. Benefits accruing to export processing zone enterprises, etc.
30. Inspection facilities
PART IX – MISCELLANEOUS PROVISIONS
31. Appeals to the Minister
32. Power of Minister to give directions33. Reports to the Minister
34. Regulations
35. General powers of the Minister
FIRST SCHEDULE - Permitted activities
SECOND SCHEDULE - Limitations on importsG/SCM/Q3/KEN/8
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CHAPTER 517
12 of 1990
14 of 1991
7 of 1991EXPORT PROCESSING ZONES ACT
Commencement of 23 November 1990
An Act of Parliament to provide for the establishment of export processing zones
and the Export Processing Zones Authority;  to provide for the promotion and
facilitation of export oriented investments and the development of enabling
environment for such investment and for connected purposes.
PART I – PRELIMINARY
Short title 1. This Act may be cited as the Export Processing Zones Act.
Interpretation
7 of 1992 S.22. In this Act, unless the context otherwise requires "adequate security"
means security which has been accepted as adequate by the Authority for the
purpose of section 10;
"Authority" means the Export Processing Zones Authority established by
section 3;
"company" means a company within the meaning of the Companies Act or a
company incorporated outside Kenya but registered in Kenya under the
Companies Act;
Cap. 486 "commercial activity" means trading in, breaking bulk, grading, repacking orrelabelling of goods and industrial raw materials;
"customs control" means the measures applied to ensure compliance with the
laws and regulations which the customs officers are responsible for enforcing;
"customs officer" means a customs officer appointed under the Customs and
Excise Act;
"customs territory" means the territory in which the customs laws of Kenya apply
in full, but does not include an export processing zone;
Cap. 472 "domestic Kenyan business" means any individual, partnership, corporation ofother entity conducting a trade on business within Kenya, which is not an export
processing zone enterprise;
"duty" means the fiscal, customs and excise duty for the time being leviable
under any written law;
"export" means to take or cause to be taken out of the customs territory or into an
export processing zone;G/SCM/Q3/KEN/8
Page 6
"export processing zone" means a designated part of Kenya where any goods
introduced are generally regarded in so far as import duties and taxes are
concerned, as being outside the customs territory but are duly restricted by
controlled access and wherein the benefits provided under this Act apply,;
"export processing zone developer" means a corporate body established to
develop and administer an export processing zone under this Act;
"export processing zone enterprise" means a corporate body, including a
developer or an export processing zone operator, which has been granted a
licence under this Act;
"export processing zone export" means any product sold by an export processing
zone enterprise in an export processing zone for exportation direct or through the
customs territory;
"export processing zone import" means any input or service to be supplied to an
export processing zone enterprise within an export processing zone, whether from
outside or inside the customs territory;
"export processing zone operator" means a corporate body engaged in the
management of an export processing zone designated under section 25;
Supra "goods" includes all kinds of articles, wares, merchandise and stock and, where
any such goods are sold under the customs and Excise Act, includes the proceeds
of sale;
"import" means to bring or cause to be brought into the customs territory from a
foreign country or from an export processing zone;
"industrial raw materials" means, items used as ingredients in the manufacture of
goods;
"infrastructure" means a physical structure such as road, bridge, or storm sewer
which facilitates economic or other activity or protects property;
"Import duties and taxes" means customs duties and all other duties, taxes, fees or
other charges which are collected on or in connection with the importation andexportation of goods but does not include fees and charges which are limited in
amount to the costs of services rendered under this Act;
Act 7/93 "Kenya Revenue Authority" means the Authority established by section 3 of the
Kenya Revenue Authority Act;
"licence" means a licence issued under this Act;"manufacture" includes:
(a) the conversion of organic or inorganic material by manual, mechanical,
chemical or biochemical means into a new product by changing the size,
shape, composition, nature or quality of such material;  and
(b) assembly of parts into piece of machinery or other products;G/SCM/Q3/KEN/8
Page 7
but excludes
(i) the installation of machinery or equipment for the purpose of
construction;  or
(ii) any process that is primarily of agricultural, pastoral,
horticultural or silvicultural activities;
"minister" means the minister for the time being responsible for Industry;"service activity" means an export-related service provided by an export
processing zone enterprise including consultancy, information, brokerage and
repair services, financial services and commercial activity;
"commercial activity" means trading in, breaking bulk, grading, repacking or
relabelling of goods and industrial raw materials
"industrial raw materials" means items used as ingredients in the manufacture of
goods;
Establishment and
membership of theExport Processing
Zones Authority
7 of 1993 S.3"Kenya Revenue Authority" means the Authority established by section 3 of the
Kenya Revenue Authority Act.  "Amendment No. 110 of 2000"
PART II – THE EXPORT PROCESSING ZONES AUTHORITY
3. (1) There is hereby established an authority to be known as the
export Processing Zones Authority;
(2) The Authority shall be a body corporate with perpetual succession and a
common seal and shall be capable in its corporate name of
(a) suing and being sued;
(b) taking, purchasing or otherwise acquiring, holding, charging and
disposing of movable and immovable property;
(c) having and managing its own general fund including borrowing and
lending money;
(d) entering into contracts(e) doing or performing all such other things or acts necessary for the proper
performance of its functions under this Act which may lawfully be doneby a corporate body;
(3) The Authority shall consist of:(a) a chairman to be appointed by the President;(b) a representative of the Kenya Association of Manufacturers;(c) a representative of the National Chamber of Commerce and Industry;G/SCM/Q3/KEN/8
Page 8
(d) four other members appointed by the Minister from the private sector,
who in his opinion have experience and expertise in manufacturing or
export trade or commercial and financial matters;
(e) the Permanent Secretary to the Treasury;(f) The Permanent Secretary to the Ministry for the time being responsible
for industry;
(g) the Governor of the Central Bank of Kenya;(h) the Commissioner of Customs and Excise;(i) the Commissioner of Lands;(j) the managing director of the Investment Promotion Centre;  and
(k) the chief executive of the Authority.
(4) The Chairman and every member appointed under paragraphs (b), (c) and
(d) of subsection (3) shall hold office for a period of three years and shall be
eligible for re-appointment.
(5) Any Member appointed under paragraphs (b), (c) and (d) of subsections
(3) shall cease to hold office if;
(a) he delivers to the Minister a written resignation of this appointment;(b) on the advice of the Authority, the Minister removes him from office on
the grounds that he is incapacitated by mental or physical illness or is
otherwise unable or unfit to discharge the functions of a member or is
unable to continue as a member;
(c) he has been absent from three consecutive meetings of the Authority
without leave or good cause;
(d) he is adjudged bankrupt or enters into a composition scheme or
arrangements with his creditors;
(e) he is sentenced by a court to imprisonment for a term of six months or
more;  or
(f) he is convicted of an offence involving dishonesty, fraud or moral
turpitude.
(6) The members of the Authority shall be paid such remuneration and
allowance out of the general fund of the Authority as may be determined by the
Minister
Cap 480 (7) The Authority shall be exempt from payment of any stamp duty
chargeable under the Stamp Duty Act.G/SCM/Q3/KEN/8
Page 9
Meetings and
procedures of the
Authority4. (1) The chairman of the Authority shall convene such meetings at
least once each month and whenever he receives a written request by at least two
members, and in the absence of the chairman, meetings shall be convened by the
chief executive of the Authority and the members present shall elect one of themembers to preside as chairman.
Protection from Legal
Action(2) The quorum for any meetings of the Authority shall be half of its
members and the Authority may, subject to the requirements for the quorum,
regulate the procedure in regard to meetings of the Authority and the transaction
of business at such meetings.
(3) If the chairman of the Authority by reason of extended illness or absence
is temporarily unable to perform the duties of his office, the President shall
appoint another member of the Authority to act in his place during the period of
absence.
(4) The chairman may at any time resign by a letter addressed to the
President and the resignation shall take effect upon being accepted by the
President.
(5) Any member who has a direct or indirect interest in any decision that is
to be taken on any matter by the Authority, shall disclose the nature of such
interest at the meeting of the Authority where such decision is being taken and
the disclosure shall be recorded in the mi nutes of the meeting, and if either the
member of a majority of the members' interest in the matter is such as to
influence his judgement, he shall not participate in the deliberation or thedecision of the Authority on such matter.
Seal and execution of
document5. (1) The common seal of the Authority shall be kept in the custody of
the Authority and shall not be affixed to any instrument or document except as
authorized by the Authority.
(2) All documents other than those required by law to be under seal, made
by, and all decisions of the Authority may be signified under the hands of the
chairman, or, in the case of a decision taken at a meeting at which the chairman is
not present, under the hand of the person presiding at such meeting.
Appointment of the
chief executive of theAuthority6. (1) The Minister may, on recommendation of the Authority appoint
a chief executive of the Authority whose conditions and terms of employment
including remuneration shall be determined by the Minister.
(2) The chief executive shall, subject to the general direction and control of
the Authority, be charged with the direction of the affairs and transactions of theAuthority, the exercise, discharge and performance of its objectives, functions
and duties, and the administration and control of the servants of the Authority.
(3) The Minister may, on recommendation of the Authority, remove from
office the chief executive appointed under subsection (1).G/SCM/Q3/KEN/8
Page 10
Appointment and
remuneration of staff7. (1) The Authority may appoint such other officers and servants as it
considers necessary for the efficient discharge of its responsibilities and
functions.
(2) The officers and servants appointed under subsection (1) shall be
remunerated in such manner and at such rates and shall be subject to conditions
of service as may be determined by the Authority;
(3) Subject to this Act, every officer or servant appointed under subsection
(1) shall exercise such powers and functions and perform the duties assigned to
him from time to time by the chief executive.
8. (1) Neither the Authority, any of its members, officers nor servants
shall be personally liable for an act which is done or purported to be done in good
faith by such person, on the direction of the Authority or in the performance or
intended performance of any duty or in the exercise of any power under this Actor the regulations made thereunder;
(2) Any expenses incurred by any person referred to in subsection (1) in any
suit or prosecution brought against him before any court in respect of any Act
which is done or purported to be done by him under this Act on the direction ofthe Authority shall, if the court holds that such act was done in good faith be paid
out of the general fund of the Authority, unless such expenses are recovered by
him in such suit or prosecution.
Objectives of the
Authority 14 of 1991,Sch.9. (1) The principal objectives of the Authority shall be
(a) the development of all aspects of the export processing zones with
particular emphasis on provision of advice on the removal of
impediments to, and creation of incentives for, export-oriented
production in areas designated as export processing zones;  and
(b) the regulation and administration of approved activities within the export
processing zones, through implementation system in which the export
processing zone enterprises are self regulatory to the maximum extent;
and
(c) the protection of Government revenues and foreign currency earnings.(2) For the purpose of carrying out the objectives specified in subsection (1),
the Authority may exercise, perform and discharge all or any of the following
powers, duties and functions:
(a) to advise the Minister on all aspects of development of the export
processing zone;
(b) to implement the policies and programmes of the Government with
regard to the development of the export processing zones;
(c) to identify and map the areas to be designated as export processing
zones;
(d) to plan the development and maintenance and to finance the basic
infrastructure up to the perimeter of the export processing zones;G/SCM/Q3/KEN/8
Page 11
(e) to examine and process applications for designation of export processing
zones and issue relevant approvals;
(f) to examine and process applications for licences by the export processing
zone developers, export processing zone operators, and export processingzone enterprises and issue relevant licences.
(g) to promote and market export processing zones among investors;(h) to issue certificates of origin to export processing zone enterprises for the
purposes of a generalized system of preferences and other trade
preferences given under bilateral or multilateral trade agreement;
(i) to act as a "one-stop" centre through which the export processing zone
enterprises can cannel all their applications for permits and facilities not
handled directly by the Authority;
(j) to process building plans and issue relevant approvals in consultation
with the Ministry responsible for physical planning and other relevant
Authorities;
(k) to perform all such administrative functions in relation to the designated
export processing zones as would normally be performed by local
Authorities;
(l) to maintain current data on the performance of the programme in each
individual export processing zone and export processing zone enterprise;
(m) to enforce within the export processing zone compliance with customs
procedures and other requirements for preventing the unauthorized use of
designated export processing zones and export processing enterprise;
(n) to enforce compliance with exchange control procedures and other
requirements for preventing the unauthorized use of designated export
processing zone and export processing zone enterprises;
Cap 472
Cap 112Cap 476(o) to suspend or cancel the licence of an export processing zone enterprise
or an export processing zone developer which is in the violation of the
Customs and Excise Act, the Exchange Control Act and the Value AddedTax Act;  and
(p) to do all such other acts as may be incidental or conducive to the
attainment of the objective of the Authority or the exercise of its powers
under this Act.
Power of the Authority
to make rules
14 of 1991, Sch.10. (1) Without prejudice to the generality of the powers conferred
under this Act, the Authority shall formulate such rules as may be required for the
purpose of ensuring orderly and fair development and operation of export
processing zones and export processing enterprises, and in particular rules to –
Committees (a) determine application procedures and criteria for the approval of export
processing zones or export processing developers or export processing
zone operators and export processing zone enterprise;G/SCM/Q3/KEN/8
Page 12
(2) The Authority shall render its decision on the designation of an export
processing zone and all other approvals required under this Act within thirty days
from the date on which the completed application form for the relevant approval
or the licence has been received by the Authority;
11. (1) The Authority shall have its general fund.(2) There shall be paid into the general fund(a) all such sums of money as may be paid as fees under this Act;  and
(b) all such sums of money as may be received by the Authority for its
operations from any other source.
(3) There shall be paid out of the fund all such sums of money required to
defray the expenditure incurred by the Authority in the exercise, discharge andperformance of its objectives, functions and duties under this Act;
(4) The annual budget of the Authority shall be subject to approval by the
Treasury and any funds generated in the general fund in excess of the amounts
deemed appropriate by the Minister shall be paid into the consolidated Fund.
Accounts etc. of the
Authority12. (1) The Authority shall cause proper books of accounts to be kept of
its income and expenditure, assets and liabilities and all other transactions of the
Authority.
(2) The Authority or any person officially authorized in that behalf by the
Authority may, by notice in writing, require any licensee to furnish to the
Authority or to an authorized person, within such period as is specified in the
notice, not being less than thirty days, all such returns or information as specified
in such notice.
Provided that nothing in this secti on shall compel a licensee to disclose
his patented commercial secrets.
Disclosure of
information13. (1) The Authority or any officer or servant of the Authority shall not
disclose to any person or use any return or information acquired under
section 12(2) except for the purpose of achieving the objectives of the Authorityunless required to do so by a court of law.
(2) Any officer or servant of the Authority who contravenes this section shall
be guilty of an offence and liable to a fine not exceeding two hundred thousand
shillings or imprisonment for a term not exceeding three years or to both.
Committees 14. The Authority may appoint committees, whether of its own members or
otherwise, to carry out such general or specific functions as may be specified by
the Authority, and may delegate to any such committee such of its powers as the
Authority may deem appropriate.G/SCM/Q3/KEN/8
Page 13
Declaration of export
processing zones
7 of 1993.s.4PART III – EXPORT PROCESSING ZONES
15. (1) The Minister may, on the recommendation of the Authority, and
in consultation with the Minister for the time being responsible for Finance, withthe object of attracting, promoting or increasing the manufacture of goods, or
provision of services, for export, by notice in the Gazette, declare any area in
Kenya to be an export processing zone.
Facilities etc. within an
export processing zone(2) Every declaration of an export processing zone under subsection (1) shall
define the limits of the zone and shall remain in force until revoked by the
president by order in the Gazette.
16. (1) The Authority may require the export processing zone developer
to provide and maintain in an export processing zone such facilities including
adequate enclosure to separate an export processing zone from the customs
territory, as it may consider necessary for the proper and efficient functioning ofthe zone.
(2) Subject to this Act, no person shall reside within an export processing
zone without the prior permission of the Authority;
(3) The Authority may at its discretion order the exclusion or removal from
an export processing zone of any goods or discontinuance of any activity or
operations which in its opinion, are dangerous or prejudicial to public interest,
health or safety.
Provided that the Authority shall not issue an order under this section
without first giving such a person an opportunity of being heard.
(4) Any person who contravenes this section shall be guilty of an offence
and liable to a fine not exceeding two hundred thousand shillings or to
imprisonment for a term not exceeding three years or to both.
Activities permitted
within an export
processing zone7 of 1993 S.517. (1) The activities eligible to be carried out within an export
processing zone shall be manufacturing activities, commercial activities or
service activities.
(i) where manufacturing and commercial activities involving goods
manufactured outside Kenya are carried on by an export processing zone
enterprise, the two activities shall be physically separated;  and
(ii) where commercial activities involve goods manufactured outside Kenya,
such goods shall be clearly labelled as products of the country wheresuch goods were manufactured.
(2) For the purposes of subsection (1), notwithstanding the repeal of the First
schedule the activities specified in that schedule or additions made
thereto by the Minister by notice in the Gazette shall continue to becarried out in the manner specified for each designated export processing
zone.
(3) The Authority shall give notice to the Kenya Revenue Authority of every
export processing zone enterprise licenced under this section specifyingG/SCM/Q3/KEN/8
Page 14
(a) the activities in respect of which the enterprise is licenced and shall, in
relation to commercial activities, indicate whether the enterprise is
permitted to deal in goods not directly related to manufacturing activities.
(b) any conditions attached to the licence.
Power of the Minister to
make rules.18. The Minister may after consultation with the Authority, make rules for
the proper establishment and administration of the export processing zones.
PART IV - LICENSING PROVISIONS
Licences.
14 of 1993, sch.19. (1) No person shall carry on business as an export processing zone
developer, export processing zone operator or export processing zone enterprise
or hold himself out as providing or maintaining activities or facilities within an
export processing zone enterprise unless he has been licensed as an export
processing zone developer or an export processing zone operator or an export
processing zone enterprise as the case may be.
(2) The Authority may on receiving application in the prescribed form issue
a licence to any person to carry on business as an export processing zone
developer or an  export processing zone operator or an export processing zone
enterprise and every licence issued under this subsection shall be in theprescribed form.
Register of licences (20) The Authority shall keep in such form as it deems appropriate a register
of the holders of current licences issued under this Act specifying in relation to
each holder of a licence.
(a) his name(b) the address of the principal place at which he carries on business;  and(c) the name or style under which the business is carried on if different from
the name of the holder of the licence.
(2) Where:-(a) The holder of the licence ceases to carry on the business to which the
licence relates;  or
(b) A change occurs in any particulars which are required to be entered in the
register of licence holders with respect to the holder of a licence
the holder of the licence shall within four teen days of the occurrence of the event
concerned give to the Authority particular of such change in the prescribed form.
Qualifications of export
processing zonedevelopers and
operations
14 of 1991, schLicencesPART V – EXPORT PROCESSING ZONE DEVELOPERS AND
OPERATORS
21. (1) An export processing zone developer or operator shall:-
(a) be a company incorporated in Kenya for the sole purpose of developing
and operating an export processing zone;G/SCM/Q3/KEN/8
Page 15
(b) have the necessary capital and expertise required for developing the
export processing zone;  and
(c) except for an export processing zone operator appointed under
section 22, own or lease land for a minimum period of thirty years within
the export processing zone
(2) Each export processing zone developer shall receive an export processing
zone operator's licence from the Authority if it qualifies under the criteria
prescribed in the regulations.
Powers of export
processing zone
developers andoperators.
14 of 1991, sch.22. (1) An export processing developer shall have to
(a) to act or appoint an export processing zone operator to undertake
management and administration of the export processing zone on its
behalf subject to section 19(1);
(b) lease, sub-lease or sell land or buildings to licensed export processing
zone enterprises, and charge rent or fees for other services that may be
provided, in convertible foreign currency.
(2) the export processing zone developer shall
(a) take improvements to the export processing zone site and its facilities
according to the plans approved by the Authority;
(b) provide or facilitate provision of infrastructure and other services
according to the design and engineering studies submitted to the
Authority together with the application;
(c) provide adequate enclosures to segregate  the zone area from the customs
territory for the protection of revenue together with suitable provisions
for the movement of persons, conveyances, vessels and goods entering orleaving the zone;
(d) provide adequate security on the site office, accommodation and facilities
for customs as determined by the Authority;
(e) adopt rules and regulations for business within the zone, which shall
promote its safe and efficient operations;
(f) maintain adequate and proper accounts and other records in relation to its
business and report on zone activities, performance and development tothe Authority on an annual basis or as required by the Authority, the
Commissioner of Customs and Excise, the Central Bank, the Central
Bureau of Statistics or other relevant authorities;  and
(g) register any lease agreements and service.(3) The accounts and records required under paragraph (f) or subsection (2)
shall be maintained in English.
(4) An export processing zone operator shall have powers stated in
paragraph (b) of subsection (1).G/SCM/Q3/KEN/8
Page 16
(5) An export processing zone operator shall comply with all the provisions
of this section including (d), (e), (f) and (g) of subsection (2).
(6) An export processing zone developer or export processing zone operator
who fails to maintain adequate and proper accounts and other records as requiredby this section shall be guilty of an offence and liable to a fine not exceeding
three hundred thousand shillings.
Establishment of export
processing zone
enterprisesPART VI – EXPORT PROCESSING ZONE ENTERPRISES
23. (1) No export processing zone enterprise shall be established, and
the benefits described in Part VIII shall not accrue to any enterprise unless theexport processing zone enterprise holds a valid licence issued by the Authority.
(2) The licence shall be granted by the Authority if the application is found
to meet the objectives of this Act and if the proposed business enterprise:
(a) is incorporated in Kenya, whether or not it is one hundred per cent
foreign owned, for the sole purpose of producing goods or services for
export within an export processing zone;
(b) proposes to engage in any activity or activities eligible to be undertaken
by an export processing zone enterprise in the export processing zone;
(c) shall not have a deleterious impact on the environment or engage in
unlawful business activities, impinging on national security or may prove
to be a health hazard;  and
(d) conducts business in accordance with the law for the time being in force
save for any exemptions that may from time to time be granted.
Goods deemed to be
exported and importedinto KenyaPART VII – OPERATIONS WITHIN THE EXPORT PROCESSING ZONES
24. Unless otherwise provided under this Act or under any other written
law:-
(a) goods which are taken out from any part of the customs territory and
brought into the export processing zone or services provided from part of
the customs territory to an export processing zone shall be deemed tohave been exported from Kenya and shall be paid for in convertible
currency;  and
(b) goods which are brought out of an export processing zone and taken into
any part of the customs territory for use therein or services provided froman export processing zone to any part of the customs territory shall be
deemed to be imported.
Goods within an export
processing zone
14 of 1991 Sch.
7 of 199325. (1) Subject to section 17, goods within an export processing zone
shall not be taken out of the zone except:-
(a) for export;  or
(b) for export into the customs territory subject to import and customs
procedures and payment of import duties;  orG/SCM/Q3/KEN/8
Page 17
(c) for repair and maintenance or processing or conversion with prior
approval of the Authority and under supervision of customs and subject
to such conditions as may be imposed.
(2) Subject to section 17, services provided by an export processing zone
enterprise shall be provided to:-
(a) persons outside Kenya;  or(b) other export processing zone enterprises in furtherance of the export
activities of such enterprises subject to approval of the Authority;  or
(c) persons in the customs territory subject to approval of the Minister.
Prohibited activities
within the exportprocessing zone26. (1) No retail trade in goods produced in the export processing zone
or imported into the export processing zone, shall be conducted within the export
processing zone;
(2) Goods manufactured in an export processing zone shall not be used in the
zone for personal consumption;
(3) Such business services as approved by the Minister, on advice of the
Authority, may be rendered within an export processing zone.
(4) Any person who contravenes this section shall be guilty of an offence
and liable to a fine not exceeding two hundred thousand shillings or
imprisonment for a term not exceeding three years or to both.
27. (1) Subject to this Act, goods within the export processing zone
may;
Removal of goods from
an export processingzone(a) be removed under supervision of a customs officer from the zone for
export or sent into another export processing zone or bonded factory,
either in original package or otherwise;
(b) Unless otherwise directed by the Authority;
(i) be stored, sold, exhibited, broken up, repacked, assembled, distributed,
sorted, graded, cleaned, mixed, or otherwise manipulated or be
manufactured in accordance with the provision of this Act;  or
(ii) be destroyed under the supervision of customs.(2) Subject to this Act, goods of any description which would be used
directly for the manufacture of other goods by a licensed export processing zoneenterprise or goods manufactured in any part of the customs territory which are
meant for export may be brought into an export processing zone.
7 of 1993, s.7 (3) Any person who contravenes this section shall be guilty of an offence
and liable to a fine not exceeding two hundred thousand shillings orimprisonment for a term not exceeding three years or to both and the goods shall
be liable to forfeiture under the Customs and Excise Act.
Cap. 113 (28) (1) Unless otherwise provided under this Act or under any other
written law –G/SCM/Q3/KEN/8
Page 18
(a) payments of funds by an export processing zone enterprise which may be
received by a resident or non-resident of the customs territory and
debited from the foreign currency account legally maintained and
operated by an export processing zone enterprise shall be subject to the
provisions of the Exchange Control Act applicable to all transactionsbetween such persons and non-residents;
(b) receipts of funds by export processing zone enterprises which may be
paid by residents or non-residents as defined under the Exchange Control
Act shall only be credited into foreign currency accounts legally
maintained and operated by the export processing zone enterprises
provided those payments arise in relation to authorized export processingzone exports or other transactions duly approved under the Exchange
Control Act;  and
(c) all currency transactions between export processing zone enterprises and
non-resident persons, resident outside the customs territory, shall beexempt from the Exchange Control and the Exchange Control Act to
apply Act, except for the regulations made under this Act to export
processing zone enterprises.
(2) Notwithstanding subsection (1), all financial transactions, including
payment of salaries and wages, between export processing zones enterprises and
persons resident in Kenya shall be carried out through commercial bank accounts
Benefits accruing to
export processing zone
enterprises etc.
14 of 1991, sch.PART VIII - BENEFITS TO EXPORT PROCESSING ZONE ENTERPRISES,
ETC.
Cap. 472
Cap. 47629. (1) The export processing zone enterprises, the export processing
zone developers and the export processing zone operators shall be granted
exemption from all existing and future taxes and duties payable under the
Customs and Excise Act and Value Added Tax Act on all export processing zone
imports for use in the eligible business activities of the export processing zone
enterprise including machinery and equipm ent, spare parts, tools, raw materials,
intermediate goods, construction materials, and equipment, office equipment and
supplies, and transportation equipment subject to the limitations on goods
specified in the Second Schedule to this Act and according to the conditions
specified in the Customs and Excise Act and the Value Added Tax Act.
(2) Subject to subsection (1) and without prejudice to any other written law,
the export processing zone enterprises, export processing zone developers and the
export processing zone operators shall be granted the following exemptions –
Cap 472 Exchange control on receipts and payments by export processing zoneenterprises.
(a) exemption from registration under the Value Added Tax Act;(b) exemption from the payment of excise duties as specified in the Customs
and Excise Act;G/SCM/Q3/KEN/8
Page 19
(c) exemption from the payment of income tax as specified in the Income
Tax Act for the first ten years from the date of first sale as an export
processing zone enterprise, except that the income tax rate shall be
limited to twenty-five per cent for the ten years following the expiry ofthe exemption granted under this paragraph;
Cap. 470 Provided that this exemption shall not apply in respect of commercial
activities of an export processing zone enterprise not directly related to
its manufacturing activities.
(d) exemption from the payment of withholding tax on dividends and other
payments made to non-residents during the period that the export
processing zone enterprise is exempted from payment of income tax
under paragraph (c).
(e) exemption from stamp duty on the execution of any instruments relating
to the business activities of an export processing zone enterprise;
(f) exemption from quotas or other restrictions or prohibitions on import or
export trade with the exception of trade in firearms, military equipment
or other illegal goods;
(g) exemption from exchange controls on payments for(i) receipts of export processing zone exports
(ii) payments for raw materials, intermediate goods, tools and spares,
supplies, construction equipment and construction materials, capital
equipment, office equipment, repatriation of royalties, management fees,
technology transfer fees, profits, dividends, advertising expenses,
inspection fees for quality control, debt service and any other legitimate
business expenses;  and
(iii) capital transactions, except on capital funds raised from Kenyan residents
subject to exchange.
(h) exemptions from rent or tenancy controls;  and
(i) any other exemptions as may be granted by the Minister for the time
being responsible for Finance by notice in the Gazette.
Inspection facilities PART IX – MISCELLANEOUS PROVISIONS
30. The customs officer in each export processing zone shall offer-on-site
inspection to the export processing zone for imports into, and exports out of the
export processing zone.
Appeal to the Minister 31. (1) Any person aggrieved by any direction given by the Authority tosuch person or by a decision of the Authority
(a) refusing to grant a licence
(b) imposing limitations or
(c) cancelling or suspending a licenceG/SCM/Q3/KEN/8
Page 20
may appeal to the Minister against such direction, refusal, limitations or
restrictions, cancellation, suspension or removal, as the case may be, within thirty
days from the date of which the decision was communicated to such person
(2) The Minister may, if he considers it in the public interest to do so, set
aside the Authority's decision.
Power of the Minister to
give directions32. (1) The Minister may give to the Authority such directions as he
may consider necessary for the proper functioning of an export processing zone
or for the purpose of protecting revenue and foreign exchange earnings.
Report to the Minister (2) The Minister may from time to time direct the Authority to furnish insuch form as he may require returns, accounts and any other information with
respect to the work of the Authority and the Authority shall comply with such
direction.
Report to the Minister 33. The Authority shall within three months after the close of each financialyear, submit to the Minister a report of its operations and activities throughout the
year, together with audited accounts in such form and detail as the Minister may
from time to time determine.
Regulations 34. The Minister may make regulations in respect of any matter required bythis Act to be prescribed or in respect of which regulations are authorized to be
made.
General power of
Minister35. (1) The Minister may, for health, environmental or public security
reasons and by order published in the Gazette, exclude goods or services from theprovisions of this Act.
(2) The Minister may, for health, environmental or public security reasons
and by order published in the Gazette, prohibit any goods from being taken into
an export processing zone.G/SCM/Q3/KEN/8
Page 21
FIRST SCHEDULE
(Repealed by 7 of 1993, s.8)
SECOND SCHEDULE
LIMITATIONS ON IMPORTS
(s.29(1)) The following goods may not be imported free of import duty and value
added tax by an export processing zone enterprise or an export processing zone
developer –
Amendment of the
Second Schedule to Cap5171. Any vehicle not used solely within an export zone and in any case
Passenger cars
Mini buses
Amednment No. 97 of
20012. The Second Schedule to the Export Processing Zones Authority Act is
amended by deleting paragraph (ii) of item 2 and inserting the following new
paragraph:-
(i) fuel oil which is exclusively and physically expended as raw material for
the manufacture of bitumen, in such quantities as the Commissioner may,from time to time, approve;
(ii) fuel for use in generators and boilers, in quantities and subject to such
conditions as Commissioner may prescribe.
3. Spare parts for motor vehicles, including tyres.G/SCM/Q3/KEN/8
Page 22
CUSTOMS & EXCISE REGULATIONS
EXPORT PROMOTION OFFICE
240A. (1) In this regulation
"approved supplier" means a manufacturer or a producer who imports materials for use in the
production of goods for supply to an indirect exporter;
"Export promotion programmes Office" means the Offi ce in the Ministry of Finance charged with the
responsibility of the administration of this regulation;
"Fuel" includes motor spirits (gasoline), automotive diesel exports and kerosene, but excludes coal,coke, furnace oil, and petroleum gases;
"indirect exporter" means a manufacturer or producer who imports goods for use in the production of
goods for supply to another manufacturer or producer for use in the production of goods for export;
"indirect export" means the materials supplied by an indirect exporter to a manufacturer or producer
for use in the production of exports under this regulation and includes supplies by an approvedsupplier to an indirect exporter;
"indirect exporter" means a manufacturer or producer who imports materials for supply to another
manufacturer or producer for use in the production of goods for export;
"indirect import" means the materials imported by an indirect exporter or, approved supplier for the
production of exports under this regulation;"Manufacture", for the purposes of this regulation, includes any process by which a commodity is
finally produced including assembling, packing, bottling, repacking, mixing, blending grinding,
cutting, bending, twisting, joining or other similar activity.
(2) Subject to this regulation, remission of duty may be granted by the Minister in respect of -(a) goods imported user in, or to be attached to, goods manufactured produced in Kenya for
subsequent exportation; and
(b) imported goods, other than fuel, lubricants, plant, machinery or equipment, for direct
consumption or to be expended in the manufacture or production in Kenya of goods for
subsequent exportation.
(c) imported goods, other than fuel, lubricants, plant, machinery or equipment, for direct
consumption or to be expended in the manufacture or production in Kenya of goods for
supply as shipstores to the national carrier or any airline designated under an air services
agreement between the Government and a foreign government.
(d) imported, goods other than fuel, lubricants, plant machinery or equipment for direct
consumption or to be expended in the manufacture or production in Kenya of goods forsupply to an indirect exporter;
Provided that the indirect exporters and approved suppliers are registered by the
commissioner under such conditions as the commissioner may specify
(3) Subject to this regulation, remission of duty may be granted by the Minister in respect of -
(a) goods imported for use in, or to be attached to, goods manufactured or produced in Kenya;
and
(b) imported goods, other than fuel, lubricants, plant machinery equipment, for direct
consumption, or to be expended in the ma nufacture at production in Kenya of goods;
Provided that the goods produced or manufactured -(i) are duty free under the First Schedule to the Act but excluding fuels; orG/SCM/Q3/KEN/8
Page 23
(ii) are goods, including capital equipment and vehicles, supplied to an official aid funded
project where the goods, if imported, would have qualified for full remission of duty
under Section 138 of the Act; or
(iii) are goods for official use "by the Kenya armed forces";  or
(iv) are goods for supply to the National Carrier or any airline designated under an air
agreement between the government and foreign government.
(v) Are goods manufactured or produced from industrial sugar;
(4) The remission of duty is restricted to -(a) the manufacturer or producer of goods for export referred to in paragraph (2);
(b) an indirect exporter approved under paragraph (6) (c); and(c) the manufacturer or producer of goods referred to in paragraph (3);
(d) sixty-five per centum of duty payable in the case of a manufacturer who uses industrial sugar
as raw material in the production of goods for domestic use.
Provided that remission of duty shall not be granted in respect of suspended duty and damping
duty;
(5) The Export promotion programmes office shall consider for approval all applications for
remission under this regulation.
(6) Subject to paragraph 94), an application for remission of duty under paragraph (2) may be
allowed by the Export Promotion Programmes Office in the following cases -
(a) an receipt of an application on form C.56 supported by -
(i) a bona fide export order or export contract for specified export goods and a letter of
credit or other documentary evidence for a remitting overseas bank;
(ii) detailed production plans including production processes or formulae, and specifying
the types and qualities of goods to be imported;  and
(iii) a list of those goods to be imported including description, tariff classification
quantity, value and amount of duty to be remitted;  or
(iv) Form M issued under the provisions of th e Tea Act in respect to Tea sold in Mombasa
Tea Auction sales.
(b) where an exporter has an established record of exports of specified goods over a period of at
least one year, on receipt of application on Form C.56, for the imports required to produce
exports of value up to the value exported on average over a six month period where theapplication is supported by -
(i) export entries documenting the value of exports of specified goods over the
immediately preceding year, or such lo nger immediately preceding period nor
exceeding three years;
(ii) detailed production plans including production processes or formulae, and specifying
the types and quantities of goods to be imported;  and
(iii) a list of the goods or materials to be imported including description, tariff
classification, quantity, value and the estimated amount of duty to be remitted;  or
(c) on receipt of an application on Form C.56 from an indirect exporter jointly with an application
or application from an exporter or exporters under subparagraph (a) or (b), where the
application of the indirect exporter is supported by -
(i) bone fide order or orders from an exporter or exporters applying under subparagraph
(a) or (b);G/SCM/Q3/KEN/8
Page 24
(ii) detailed production plans including production processes or formulae, and specifying
the types and quantities or goods to be imported;  and
(iii) a list of the goods and materials to be imported as indirect imports including
description, tariff classification, quantity, value and the estimated amount of duty to
be remitted; and a copy of the approved application shall be returned to the applicantduly certified by the Export Promotion Programmes Office.
Provided that the value of imported goods for which remission is being requested under this
paragraph exceeds one million shillings.
(8) Applications under paragraph (6) (b) or (7) (b) can only be made once every six months
except where evidence can be provided that exports or sales have or will reasonably be expected toexceed the average export or sale value for a six month period.
(9) The Export Promotion Programmes Office shal l maintain a register of applications for duty
remission under this regulation which shall include the name, postal address and location of business
premises, and any other information that the Export Promotion Programmes Office may require.
(10) Remission of duty on goods under this regulation is conditional on the applicant undertaking
in Form C.56 -
(a) to pay the duty on any imported goods -
(i) that have not been used in the production of approved exports or indirect exports
where remission is granted under paragraph (2);  or
(ii) that have not been used in the production of the approved good where remission is
granted under paragraph (3);  or
(iii) that have not been re-exported;  or
(iv) that have not been transferred to an approved bonded factory as provided for under
paragraph (21);  or
(v) that have not been transferred to the next production period as provided for in
paragraph (22)
(c) to completed and submit to the Export Promotion Programmes Office a reconciliation
declaration as required under paragraph (22);
(d) to keep and maintain books and records in accordance with paragraph (18);  and(e) to provide security in the form and manner referred to in paragraph (14).(l1) Goods manufactured from goods imported under this regulation shall not be eligible for
export compensation under the Local Manufacturers (Export Compensation) Act or duty remission
under any other written law.
(12) Where a by-product results from a process of manufacture or production utilizing goods
subject to duty remission under this regulation, duty shall be payable on such imported goods in the
same-proportion that the value of the by-product bears to the total value of all goods manufactured or
produced from such imported goods unless the by-products are exported.
(13) Where any scrap or waste of commercial value results from a process of manufacture or
production utilizing goods subject to duty remission under this regulation, duty shall be payable on the
prevailing value of the scrap or waste in accordance with section 127 and 121B, as the case may be,
and the First Schedule, unless the scrap or waste is exported, or destroyed under supervision of the
proper officer.G/SCM/Q3/KEN/8
Page 25
(14) Goods imported under this regulation-
(a) shall be entered on Form C.15 with a declaration of "REMISSION UNDER APPROVED
MANUFACTURE, Legal Notice number ………. of " e ndorsed on each copy in block letters;
and
(b) shall have security bond posted in an amount determined by the Commissioner, but not
exceeding the duty that would otherwise be payable and executed on the form CB.13.
(15) Goods purchased from an indirect exporter under this regulation-(a) shall be transferred from the indirect exporter to the approved manufacturer or producer for
use in the production of exports using form C.58; and
(b) shall have a security bond posted by the recipient of the transferred goods in an amount
determined by the Commissioner but not exceeding the duty that would otherwise be payable
on the indirect exports, and on the form CB.13
(15A) Goods transferred from an approved supplier to an indirect exporter-(a) shall be entered in form C.58; and
(b) shall have bond security executed on Form CB.13;
(16) The security bond shall be cancelled only-(a) after the reconciliation declaration has been verified and approved by the Export Promotion
Programmes Office; and
(b) any unused imported goods have been re-exported or transferred to an approved bonded
factory; or
(c) the duty has been paid:
Provided that for application of remission approved on or after 1 July 1992, the security bond
shall be cancelled within ninety days of receip t by the Export Promotion Programmes Office of a
properly completed Form C.57 as required under paragraphs (31) and (22), subject to the payment of
all duties declared on the Form C.57, if the Export Promotion Programmes Office has failed to
respond in writing to approve or reject such a reconciliation within such a period.
(17) The Export Promotion Programmes Office shall within seven days of the receipt of
satisfactorily completed and supported application as required under paragraph (6) or (7) give
approval or advise the applicant of a rejection stating the reasons for rejection.
(18) Every person who has been granted a remission from duty shall keep and maintain at his place
of business detailed books and records relating to the purchase, importation, stocks of goods,
production, packing, sales, shipping and exportation of all goods.
(19) The books and records referred to in paragraph (18) shall be kept for five years from the time
of application for remission and shall be made available, upon request, to the proper officer, includingan officer of the Export Promotion Programmes office, for examination and verification at all
reasonable times.
(20) Separate books and records shall be maintained for stocks of imported goods, indirect imports
and indirect exports from those maintained for domestic goods.G/SCM/Q3/KEN/8
Page 26
(21) A proper officer, including an officer of the Export Promotion Programmes Office or an
officer appointed by the Export Promotion Programm es Office, is authorized to examine and verify
the books and records, inspect the production facilities of any remission applicant and examine any
goods or materials within the production facility or any storage place related thereto.
(22) A reconciliation declaration in Form C.57 in respect of the duty remission granted shall be
submitted to the Export Promotion Programmes Office in three copies within a nine month period
from the time of approval of the remission application or, for applications approved under paragraph
(6) (a) or (1) (4), 011 completing of the order of contract, whichever is the earlier.
(23) The declaration referred to in paragraph (22) shall be supported by-
(a) certified copies of all import entries and indirect export transfers to which the reconciliation
declaration relates;
(b) a document showing-
(i) in the case of exporters approved under paragraph (2), the linkage goods produced or
manufactured from these imported goods, or any waste or scrap of commercial value,
or any waste or scrap destroyed, or any by-products either exported or sold
domestically resulting from the manufacturing or production of the exported goods;
(ii) in the case of indirect exporters approved under paragraph the linkage between the
indirect exports produced or manufactured from the imported goods, or any waste or
scrap of commercial value, or any waste or scrap destroyed, or any by-products either
exported or sold domestically resulting from the manufacturing or production of the
indirect exports; and
(iii) in the case of manufacturers or producers approved under paragraph (3), the linkage
between the imported goods and the sales of approved goods produced or
manufactured from the imported goods, or any waste scrap at commercial value, or
any waste or scrap destroyed, or any by-products either exported or sold domestically
resulting from the manufacturing or production of the approved goods; and
(iv) the disposal of any remaining unused imported goods or indirect exports by re-export,
transfer to an approved bonded factory, retention for future use in production as
provided for under paragraph (23), or domestic sale subject to duty;
(c) certified copies of all export entry documents or a list of the export entry numbers to which
the declaration relates and certified copies of all indirect export transfer documents; and
(d) the invoices for the exported goods, indirect exports and domestically sold goods, as the case
may be.
(24) Subject to section 58A of the Act, imported goods for which a remission has been authorized
may be sold or transferred to an approved bonded factory.
(25) The remission from duty granted under this regulation may be renewed on the basis of the
conditions of the initial authorization after the nine month period referred to in paragraph (22), by
submission of a new application under paragraph (6) or (7) where-
(a) fulfillment of an export or domestic sales contract has been delayed, or only partially
achieved; or
(b) where production and delivery for export or domestic sale, as the case may be, can be
established to be regular and ongoing.G/SCM/Q3/KEN/8
Page 27
(26) Any person who fails to comply with or cont ravenes any provision of this regulation shall be
guilty of an offence and be liable to a fine not exceeding the higher of five hundred thousand shillings
or three times the value of the goods involved, or be liable to imprisonment for a term not exceeding
three years or to both.
(27) Without prejudice to the provisions of paragraph (26), where any person-
(a) fraudulently contravenes the provisions of this regulation; or
(b) is grossly negligent in complying with the provisions of this regulation; or
(c) repeatedly acts in a manner inconsistent with intent of this regulation, the Export Promotion
Programmes Office may reject or revoke approval of an application under this regulation.G/SCM/Q3/KEN/8
Page 28
CUSTOMS AND EXCISE ACT CAP. 472
PART IVA - MANUFACTURE UNDER BOND
79A. (1) Imported plant machinery and equipment incl uding raw materials exclusively for use in the
manufacture of goods for export under bond shall be entered in Form CF.1 in sextuplicate.
(2) The value of the imported goods under paragraph (1), whether free or exempt from duty, or
liable to specific duty or liable to ad valorem  duty, shall be declared in accordance with sections 127,
127B and 127C of, and the Seventh Schedule to, the Act.
(3) At the port of entry, the proper officer shall take a particular account of the imported goods
and shall enter the account in a special register in Form CF.5.
(4) The plant, machinery, equipment and the raw materials for use in the manufacture of goods
for export under bond shall be consigned care of the proper officer at the station of destination andthose goods shall not be delivered to the consignee or to any other person without the authority of the
proper officer.
(5) On receipt of the goods in the bonded factory, the licensee shall-
(a) enter all the imported plant, machinery and equipment and raw materials in the register in
Form CF. 6; and
(b) enter on a separate register in Form CF. 6 all the locally obtained machinery, equipment and
raw materials.
79B. (1) An application for licensing of premises of manufacturing under bond shall be made in Form
CF. 2.
(2) The factory shall be suitable to the satisfaction of the Commissioner for manufacturing of
goods for export under bond in so far as the location, situation, construction and accommodation are
concerned and a plan of the buildings, factory, and thoroughfares shall accompany the application.
(3) The licence shall be in Form CF. 3 and shall expire on 31 December in the year of issue.
(4) When the application has been approved, the applicant shall pay the licence fee of forty
thousand shillings for each bonded factory regardless of the time of the year the licence is issued.
(5) A licensee to whom a licence is issue shall en ter into a bond in Form CFB. 1 to secure the
duty on goods on removal or in the factory and compliance with all the provisions of the Act and these
Regulations relating to manufacturing of goods for export under bond.
(6) The death of a licensee or of a surety or any other change shall be reported forthwith to the
Commissioner by the licensee or the surety.
(7) All licensed bonded factories shall be di stinguished by numbers and the words "Customs
Bonded Factory" and the number allocated to the factory shall be clearly marked on the principal
entrance to the factory or elsewhere as the proper officer shall approve and shall be removed when afactory ceases to be licensed under the Act.
(8) A licensee of a bonded factory shall submit a return of the goods remaining in his bonded
factory at the close of business on 30 June in each year to the proper officer not later than 31 July of
the same year.G/SCM/Q3/KEN/8
Page 29
(9) Any person who contravenes this regulation shall be guilty of an offence.
79C. All manufactured goods shall be entered in the "Manufactured Goods Register" by the
manufacturer in Form CF.7 and shall be stored in the "Manufactured Goods Stock Room" until they
are delivered therefrom for exportation or for removal to another bonded factory for furthermanufacture.
79D. (1) A register in Form CF. 8 maintained by the licensee for recording wastes and rejects which
must be stored separately in the "Waste and Rejects Stock Room" and the register shall be open for
inspection by the proper officer at any time.
(2) The wastes and rejects from any bonded factory shall be exported or otherwise destroyed
under Customs supervision.
79E. Manufactured goods for export under bond shall be entered in Form CF. 4 and the details
recorded in the manufactured goods register.
79F. Delivery of manufactured goods from the manuf actured goods stock room shall only be made
in the presence of the proper officer after they have been duly entered for exportation and shall be
transported directly to the port of final exportation in sealed vehicles or containers except in the case
of exceptional loads as defined in regulation 96 (6), or in any special case otherwise authorized by the
Commissioner.
79G. The licensee shall obtain a certificate of exportation from the proper officer at the port of exit
on completion of the exportation, and the certificate shall be submitted to the proper officer at the
bonded factory as proof of such export within thirty days, or such further period as the proper officer
may allow, from the date of entry of the goods.
79H. (1) Notwithstanding anything contained in these Regulations, the Commissioner may, subject to
such conditions and limitations as he may impose and on payment of the duties due, permit goods
manufactured in a bonded factory, including waste from the manufacturing process to be entered for
home use.
(2) Subject to paragraph (1), goods manufactured in a bonded factory and are intended for home
use shall be entered in Form C.20.G/SCM/Q3/KEN/8
Page 30
FINANCE BILL, 1988
PART  IVA – PROVISIONS RLATING TO MANUFACTURE UNDER BOND
Licensing of bonded
factories58A. (1) The Commissioner may, on appli cation and with prior approval of
the Minister and subject to such conditions as the Commissioner may impose, issue
a licence in the prescribed form to any person to manufacture goods for export
under bond in specified premises;  and the Commissioner may refuse to issue a
licence or, by notice in writing, suspend, revoke or refuse to renew a licence on the
grounds stated in the notice.
(2) Applications for a licence under this section shall be in the prescribed form
and shall be accompanied by the prescribed fee.
(3) A licence issued under subsection (1) shall be subject to the payment of the
prescribed annual fee and shall expire on 31 December in each year.
(4) The Commissioner may require the person applying for a licence to furnish
such security as the Commissioner may think appropriate as a condition to the
grant of the licence and the Commissioner may, at any time, require a licensee to
furnish a new security in a different amount or on different terms.
(5) No premises shall be used for manufacturing under bond unless there is in
relation thereto a valid licence.
(6) Any person who uses or permits his premises to be used for manufacturing
under bond without a licence, or a licensee who uses or permits his bonded factory
to be used in contravention of the terms of his licence shall be guilty of an offence
and liable to a fine not exceeding one hundred thousand shillings or to
imprisonment for a term not exceeding three years or to both;  and any goods in
respect of which an offence has been committed shall be liable to forfeiture.
Entry of premises as
bonded factories58B. (1) A licensee shall, before commencing to manufacture under bond,
make entry in the prescribed form and in the prescribed manner of each building,
room, place and item of plant in his factory which he proposes to use in the
manufacture or storage of raw materials or manufactured goods:  and, in each
entry, he shall specify the purpose for which each building, room, place or item of
plant is to be used.
(2) A licensee shall not, in the course of manufacturing goods under bond –(a) make use of a building, room, place or item of plant in relation to which
entry is required under this section unless there is, in respect thereof, avalid entry:
(b) effect, without prior permission of the Commissioner, an alteration in
shape, position or capacity to a building, room, place or plant.
Revocation of licence,
etc.58C. (1) Where the Commissioner suspends, revokes or refuses to renew a
licence under section 58A(1), he shall serve or cause to be served, in writing, on
the licensee a notice to that effect.G/SCM/Q3/KEN/8
Page 31
(2) The notice referred to in subsection (1) may be served by delivering it to
the licensee or by leaving it at the bonded factory or with the person in charge of
the bonded factory and thereafter the notice shall be deemed to have been served.
Entry of plant,
machinery, etc. for
exportation or forhome use.58D. (1) Where a manufacturer ceases to be licensed under section 58A, he
shall enter and deliver for exportation or for removal to another bonded factory or
for home use all the plant, machinery and equipment, raw materials or
manufactured goods in the bonded factory within such time as the Commissioner
may specify.
(2) Where on the expiry of the time specified by the Commissioner under
subsection (1), the plant, machinery and equipment, raw materials or manufactured
goods are not entered and delivered in accordance with subsection (1) then the
plant, machinery and equipment, raw materials or manufactured goods shall be
liable to forfeiture.
Manufacturer to
provide facilities58E. (1) A manufacturer shall-
(a) provide office accommodation and just weights, scales, measures and other
facilities for examining and taking account of goods and for securing them
as the proper officer may reasonably require;
(b) keep a record of all items of plant, machinery and equipment, raw
materials and goods manufactured therein and keep that record at all times
available for examination by the proper officer;
(c) provide all necessary labour and materials for the storing, examining,
packing, marking, coopering, weighing and taking stock of the goods
therein whenever the proper officer so requires.
(2) Where a manufacturer contravenes any of the provisions of this section,
the Commissioner may direct that the manufacturer shall cease operations until hehas complied with those provisions to the satisfaction of the Commissioner.
(3) A manufacturer who contravenes any of the provisions of this section or of
a direction given by the Commissioner under this section shall be guilty of an
offence.
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