TRADE FACILITATION PROJECT IN KENYA * * * * * * HANDBOOK ON IMPORTING AND EXPORTING IN KENYA * * * * * * Final Report * * * * * * Prepared By: Almaco Management Consultants Ltd and Emerging Market Economics August 2005 Disclaimer This Handbook has been prepared as a general informational guide. The information contained herein is not intended to provide legal advice or substitute for information otherwise available from relevant governmental institutions, agencies and departments. While every effort has been made to verify the accuracy of the information at the time of writing, the Authors bear no legal responsibility or otherwise for the accuracy or content, as information is dynamic and subject to change. ii TABLE OF CONTENTS ACRONYMS............................................................................................................................ vii DEFINITIONS........................................................................................................................... ix CHAPTER 1: INTRODUCITON..............................................................................................................1 1.1 Need for a Handbook on Importing to and Exporting from Kenya..................................... 1 1.2 The Purpose of the Handbook.............................................................................................. 1 1.3 Target Users......................................................................................................................... 1 1.4 How to use the Handbook....................................................................................................2 1.5 Methodology........................................................................................................................ 2 1.6 Organization of the Handbook............................................................................................. 2 CHAPTER 2: OVERVIEW OF INTERNATIONAL TRADE: THE KENYAN PERSPECTIVE.....4 2.1 Introduction.......................................................................................................................... 4 2.2 The Trade Environment ....................................................................................................... 4 2.2.1 The Geographical Location........................................................................................... 4 2.2.2 The Economy................................................................................................................ 4 2.2.3 Trade Activities............................................................................................................. 5 2.2.4 Exports from Kenya...................................................................................................... 5 2.2.5 Imports into Kenya .......................................................................................................6 2.2.6 Trade in Services........................................................................................................... 7 2.2.7 Trade Policy.................................................................................................................. 8 2.2.8 Import and Export Incentives........................................................................................ 9 2.2.9 Trade Agreements....................................................................................................... 13 2.2.10 World Trade Organization ........................................................................................ 18 CHAPTER 3: MAIN TRADE FACILITATION INSTITUTIONS .....................................................20 3.1 Introduction........................................................................................................................ 20 3.2 Customs Declaration and Clearance .................................................................................. 20 3.2.1 Customs Services Department Offices ....................................................................... 21 3.3 Port Release ....................................................................................................................... 21 3.3.1 Kenya Ports Authority (KPA)..................................................................................... 21 3.3.2 Kenya Airports Authority (KAA)............................................................................... 22 3.4 Compliance of Imports with Kenyan Standards ................................................................ 24 3.4.1 Kenya Bureau of Standards (KEBS)........................................................................... 24 3.5 Compliance with Agricultural Standards........................................................................... 26 3.5.1 Kenya Plant Health Inspectorate Service (KEPHIS).................................................. 26 3.5.2 The Horticulture Crops Development Authority (HCDA) ......................................... 27 3.5.3 Pest Control Products Board (PCPB) ......................................................................... 27 3.6 Compliance with Health and Safety Standards.................................................................. 28 3.6.1 Port Health Office....................................................................................................... 28 3.6.2 List of Port Health Offices.......................................................................................... 28 3.7 Transportation Services ..................................................................................................... 29 3.7.1 Marine Transporters.................................................................................................... 29 3.7.2 Air Transporters.......................................................................................................... 29 3.7.3 Rail Transport ............................................................................................................. 30 3.7.4 Road Transporters....................................................................................................... 31 3.7.5 Couriers or Express Operators.................................................................................... 31 iii 3.8 Implications of the Different Modes of Transport............................................................. 32 3.8.1 Rail Versus Road ........................................................................................................ 32 3.8.2 Marine Versus Air....................................................................................................... 33 3.8.3 Deciding the Mode of Transport................................................................................. 36 3.9 Warehousing Services........................................................................................................ 36 3.9.1 Customs Bonded Warehouse ...................................................................................... 36 3.10 Transit Shed Operators .................................................................................................... 37 3.11 Clearing and Forwarding ................................................................................................. 37 3.11.1 Kenya International Freight & Warehousing Association (KIFWA)...................... 37 3.11.2 Selecting a Clearing and Forwarding Agent............................................................. 37 3.12 Security Services.............................................................................................................. 38 3.13 Financial Services ............................................................................................................ 38 3.13.1 Commercial Banks.................................................................................................... 38 3.13.2 Export-Import Banks (EXIM)................................................................................... 38 3.13.3 Development Banks.................................................................................................. 39 3.13.4 External Finances...................................................................................................... 39 3.13.5 Financing Imports ..................................................................................................... 39 3.13.6 Financing Exports ..................................................................................................... 39 3.13.7 The Kenya Bankers Association............................................................................... 40 3.13.8 Selecting a Commercial Bank................................................................................... 40 3.14 Insuring your Goods ........................................................................................................ 41 3.14.1 Insuring Exports........................................................................................................ 41 3.14.2 Insuring Imports........................................................................................................ 41 3.14.3 The Association of Kenya Insurers........................................................................... 41 3.14.4 Selecting an Insurance Company.............................................................................. 41 3.15 Trade and Investment Promotion..................................................................................... 42 3.15.1 Ministry of Trade and Industry – Department of External Trade............................