Importers and exporters lead the pack in the Kenya Revenue Authority (KRA) Authorised Economic Operators (AEOs) as more industry players continue to enroll in the programme to enhance efficiency in the cargo clearance process. KRA said that it has now accommodated 155 importers and exporters since the programme started in 2006.
With 83 registered in the programme, clearing agents take the second position. However, this number is low considering that the Kenya International Freight and Warehousing Association (KIFWA) has registered over 560 and 780 clearing agents in Mombasa and Nairobi respectively.
There are only 7 transporters enrolled in the programme. Kenya Transporters Association (KTA) has over 200 registered members with a significantly huge proportion of transporters, especially those with few trucks not being members. There is only one ship agent enrolled in the programme, according to KRA.
The AEO program was conceived by the Commissioners of Customs of the East African (EAC) countries of Burundi, Kenya, Rwanda, Tanzania and Uganda in 2006 after the adoption of the World Customs Organization (WCO) SAFE Framework of Standards by the WCO Council in 2005.
“The Commissioners’ decision was in line with the EAC Protocol that requires the EAC region to set up a Customs Union as one of the building blocks for regional integration,” East African Community (EAC) secretariat posts in a brief on its website.
The decision was also prompted by the consideration that since the AEO program is about trade facilitation and the security of the supply chain, traders and Customs stood to gain more if the whole supply chain within the region is covered under one program.
The AEO aims to enhance Customs efficiency in the face of increasing volumes of trade and the increasing vulnerability of the international trade supply chain to security threats as well as the use of the international trade supply chain as a conduit for high security risk materials.
The AEO program tackles these challenges by shifting the perspective, so that instead of focusing on the goods themselves, Customs focuses on the traders.
“The compliant traders are therefore given the AEO status which means they are low risk companies and can therefore be trusted by Customs,” EAC said, adding that this implies that Customs can handle the consignments of such companies with less controls compared to others thus the program serving as an instrument for growing compliance.
The AEO program is designed to facilitate and enhance the experience of the complaint trader when undergoing Customs clearance processes.
There are both the national and regional AEOs. The EAC Regional AEO program covers and is applicable in all the Partner States namely Burundi, Kenya, Rwanda, Tanzania and Uganda save for the Republic of South Sudan which was not a member Partner State of EAC at the commencement of the programme.
The regional AEO program operates under a common set of criteria, instruments, authorisation process, benefits and monitoring system in all the Partner States. An applicant for AEO Status, irrespective of the Partner State, therefore, goes through the same set of criteria like her or his counterparts in other Partner States.
KRA has made deliberate efforts to promote pre-arrival release processes for the AEOs. Over 60 percent of regional trade transactions go through Kenya and the country is committed to guaranteeing smooth transit of goods. KRA says that the introduction of the Integrated Customs Management System (iCMS), which is due for launch, will help the AEOs to enjoy automatic cargo release.
While cargo release time has decreased to seven days thanks to reforms in Kenya and particularly in KRA, “AEOs enjoy the highest turnaround time of three days for processing release.” Moreover, the AEO programme has also reduced storage cost for traders by 30 percent.
