PUBLIC NOTICES 18/09/2023 RENEWAL OF LICENCES FOR BONDED WAREHOUSES, TRANSIT GODOWNS AND MANUFACTURER UNDER BOND (MUB).

The Kenya Revenue Authority (KRA) routinely issues public notices reminding operators of bonded warehouses, transit godowns, and manufacturers under bond (MUB) to renew their annual licenses. The notice dated September 18, 2023, served as a critical reminder for the renewal of licenses expiring on December 31, 2023. This article outlines the statutory framework governing these facilities under the East African Community Customs Management Act, 2004, and its accompanying Regulations. It details the mandatory conditions and procedural requirements for license renewal, emphasizing the necessity for timely submission through the Customs ICMS system and highlighting the KRA's stringent vetting process to ensure compliance and mitigate revenue risks.

On September 18, 2023, the Kenya Revenue Authority (KRA) issued a public notice concerning the annual renewal of licenses for operators of bonded warehouses, transit godowns, and facilities operating under the Manufacturer Under Bond (MUB) scheme. This notice, a recurring feature in the KRA's regulatory calendar, underscored the critical importance for businesses engaged in customs-controlled storage and manufacturing to ensure their operational permits remain valid. The timely renewal of these licenses is not merely a bureaucratic formality but a fundamental requirement for maintaining legal compliance and operational continuity within Kenya's customs territory.

The operation of bonded warehouses, transit godowns, and Manufacturer Under Bond (MUB) facilities in Kenya is meticulously regulated under the East African Community Customs Management Act, 2004 (EACCMA) and the East African Community Customs Management Regulations, 2010. These legislative instruments provide the overarching framework for the deferment of duties and taxes on imported goods, thereby facilitating trade, managing cash flow, and promoting local manufacturing for export. Specifically, Sections 62-69 and 160-166 of the EACCMA, read together with Regulations 74-81 and 153-168 of the EACCMA Regulations, delineate the conditions for licensing, operation, and supervision of these customs-controlled facilities. Bonded warehouses, for instance, allow for the storage of dutiable goods without immediate payment of duties, typically for an initial period of six months, extendable under specific conditions, while MUB schemes enable manufacturers to import raw materials duty-free for processing into finished goods primarily for export. Transit godowns, on the other hand, facilitate the temporary storage of goods destined for other countries within or outside the East African Community, ensuring smooth transit operations. All these facilities are subject to annual licensing by the Commissioner of Customs and Border Control and operate under strict customs supervision, often requiring bond security to guarantee deferred duties.

The KRA's public notice of September 18, 2023, while not fully detailed in publicly available snippets for that specific year, aligns with consistent requirements outlined in similar KRA pronouncements for subsequent years, such as those for 2024 and 2025 license renewals. Operators were typically reminded that their licenses would expire on December 31st of the current year and were required to submit renewal applications by October 31st. The mandatory conditions for renewal consistently include a comprehensive set of documents and compliance prerequisites. These typically entail a copy of the valid license for the preceding year, valid relevant security bonds (such as Form CB6), the company's current CR12 (a document from the Registrar of Companies detailing company particulars), and a copy of the title deed or a valid lease agreement for the premises with a duration extending beyond the license term. Furthermore, applicants must provide current Tax Compliance Certificates for both the company and each of its directors, along with the company's audited annual accounts for the previous financial year. The application must be submitted using a duly completed, signed, and customs officer-stamped Form C18, which is available for download from the KRA website. A critical procedural aspect highlighted in these notices is the requirement for applications to be submitted strictly through the Customs ICMS system. The KRA explicitly states that renewal is contingent upon the applicant having no outstanding transactions or issues with any KRA department, and that the submission of documents does not automatically guarantee renewal, as further vetting by the Authority is undertaken. Non-compliance with these renewal requirements or failure to meet the KRA's vetting standards can lead to severe consequences, including the inability to operate the bonded facility, imposition of penalties, and potential forfeiture of goods stored therein, thereby disrupting supply chains and incurring significant financial losses for businesses.

The KRA's public notice of September 18, 2023, served as a crucial reminder for operators of bonded warehouses, transit godowns, and MUB facilities to adhere strictly to licensing renewal protocols. For legal practitioners, it underscores the importance of proactively advising clients on the meticulous preparation and timely submission of all required documentation, including valid security bonds, tax compliance certificates, and audited accounts, through the designated Customs ICMS system. Ensuring that clients have no outstanding issues with any KRA department is paramount, as this can be a decisive factor in the renewal process. Practitioners should emphasize that the KRA's vetting process is thorough and discretionary, and mere submission does not guarantee approval. Moving forward, businesses and their legal advisors must remain vigilant for future KRA public notices and regulatory updates, as customs administration policies and requirements can evolve. Proactive engagement with KRA guidelines and robust internal compliance mechanisms are essential to safeguard operational licenses and ensure seamless trade and manufacturing activities within Kenya's customs framework.