PUBLIC NOTICES 18/09/2023 APPLICATION FOR LICENCES FOR TRANSIT GOODS LICENCE (C28) AND VEHICLES CONVEYING OTHER GOODS UNDER CUSTOMS CONTROL (C40)

The Kenya Revenue Authority (KRA) issued a public notice on September 18, 2023, reminding transporters of transit goods (C28) and other goods under customs control (C40) to apply for or renew their annual licences. These licences, crucial for facilitating regional trade while ensuring customs compliance and revenue protection, are mandated by the East African Community Customs Management Act (EACCMA), 2004, and its accompanying Regulations. The notice underscored the expiry of existing licences on December 31, 2023, and set a deadline of October 31, 2023, for submitting renewal applications for the subsequent year. This article delves into the legal framework, application requirements, and the implications of non-compliance for legal professionals advising clients engaged in cross-border logistics within the East African Community.

On September 18, 2023, the Kenya Revenue Authority (KRA) released a significant public notice concerning the application for and renewal of licences for vehicles conveying Transit Goods (C28) and other Goods Under Customs Control (C40). This notice served as a critical reminder to all transporters operating within Kenya's customs territory that their existing licences were set to expire on December 31, 2023, necessitating timely applications for the subsequent year. The deadline for these applications was stipulated as October 31, 2023.

These licences are not mere administrative formalities; they are foundational to the efficient and secure movement of goods across East African borders, playing a pivotal role in regional trade facilitation and revenue safeguarding. The KRA's consistent issuance of such notices highlights the ongoing importance of strict adherence to customs regulations. This article aims to provide legal practitioners with a comprehensive understanding of the legal underpinnings, procedural requirements, and practical implications associated with C28 and C40 licences in Kenya, drawing from the relevant statutory instruments and KRA guidelines.

The legal framework governing customs procedures in Kenya, particularly concerning transit goods and goods under customs control, is primarily enshrined in the East African Community Customs Management Act (EACCMA), 2004, and the East African Community Customs Management Regulations, 2010. The EACCMA was enacted to facilitate the implementation of customs matters across the East African Community (EAC) Partner States, aiming for a fully fledged Customs Union. Section 244 of the EACCMA, 2004, alongside Regulations 104 and 210 of the EACCMA Regulations, 2010, specifically addresses the licensing of vehicles conveying transit goods and other goods under customs control.

Goods under customs control refer to any goods subject to customs supervision from the time of importation until their release from customs, or until they are exported. Transit goods, specifically, are those transported under customs control from one customs office to another, or from a foreign country through the territory of one or more Partner States to a foreign destination. The licensing regime, administered by the KRA's Customs and Border Control Department, is designed to ensure that such movements are monitored, secure, and compliant with regional customs laws, thereby preventing illicit trade, diversion of goods, and revenue evasion. This framework is further supported by the requirement for customs bonds, which act as a financial guarantee to the KRA, ensuring the payment of applicable duties and taxes should the goods not reach their declared destination or if other conditions are breached.

The KRA public notice of September 18, 2023, specifically called for applications for the Transit Goods Licence (C28) and the Licence for Vehicles Conveying Other Goods Under Customs Control (C40). The C28 licence is issued for vehicles or vessels conveying goods in transit through the Partner States, while the C40 licence is for vehicles or vessels carrying goods under customs control. Both licences are critical for transporters operating within the EAC region, ensuring compliance with the EACCMA.

To obtain or renew these licences, applicants must submit several mandatory documents. These typically include a copy of the motor vehicle logbook, a valid insurance certificate, and for foreign vehicles, a COMESA Yellow Card or equivalent insurance cover. A duly filled application form, signed and stamped by a Customs Officer, is also required. The application process traditionally involved physical submission at KRA Customs Regional offices in Mombasa, Kisumu, Nakuru, Eldoret, or Times Tower in Nairobi. However, as of July 1, 2026, the KRA has fully digitized the licensing process for C28 and C40, requiring applications to be processed electronically through the Regional Electronic Cargo Tracking System (RECTS) and the Integrated Customs Management System (ICMS). This digital shift aims to enhance efficiency, reduce processing times, and improve cargo monitoring.

Upon successful application and approval, a licence fee equivalent to US$200 per licence is payable in Kenya Shillings. The licences are typically issued for a year, expiring on December 31st. Non-compliance with these licensing requirements carries significant penalties. Transporters found operating without valid C28 or C40 licences may face substantial monetary fines, legal proceedings under customs law, and the seizure of goods. Furthermore, vehicles operating without valid licences may be detained or impounded, and operators could be barred from customs clearance systems. The EACCMA also provides for offences related to transit goods, such as not following specified routes, which can lead to penalties. The integration with RECTS further enables real-time monitoring of transit cargo, detecting unauthorized route deviations or cargo diversion, thereby strengthening regional customs cooperation and security.

The KRA's move towards a digital licensing system, effective July 1, 2026, signifies a broader trend towards modernizing customs operations and enhancing compliance through technology. This includes the shift to multi-vendor, user-owned electronic seals for cargo tracking, further improving oversight and traceability. Practitioners should note that while the public notice in question was for 2023 renewals, the underlying legal framework and the KRA's commitment to strict enforcement remain constant, with the added layer of digital processing for future applications.

The Kenya Revenue Authority's public notice on C28 and C40 licences serves as a crucial reminder of the stringent regulatory environment governing transit and customs-controlled goods in Kenya. For legal practitioners, understanding the nuances of the East African Community Customs Management Act, 2004, and its Regulations is paramount to advising clients effectively. The shift to a fully digital licensing system via RECTS and ICMS, effective July 1, 2026, represents a significant modernization effort by the KRA, aimed at streamlining processes and bolstering compliance.

Practitioners should advise their clients to prioritize timely application and renewal of these licences, ensuring all documentary requirements are met, including valid vehicle logbooks, insurance, and COMESA Yellow Cards where applicable. The implications of non-compliance, ranging from substantial fines and vehicle impoundment to legal proceedings, underscore the necessity of strict adherence. As the KRA continues to leverage technology for enhanced cargo monitoring and enforcement, legal professionals must stay abreast of these developments to guide transporters through an increasingly digitized and regulated cross-border trade landscape, safeguarding their operations and mitigating potential liabilities.