The Kenya Revenue Authority (KRA) has successfully rolled out a Facilitative Authorized Economic Operators initiative to fast-track customs clearance of low-risk direct exports of Tea, Flowers, Soda ash, Coffee, Spices, and Herbs and Avocados. The objective of this initiative is to reduce the time and cost associated with documentary and border compliance.
“The exporters of the above seven (7) listed direct exports are advised to engage the services of Authorized Economic Operator Clearing Agents in order to enjoy these benefits,” KRA said in a public notice recently.
This is a huge boost that follows a recommendation by a recent regional stakeholder sensitization meeting for SMEs on the AEO scheme held early this year. A study that was conducted last year by the Federation of East African Freight Forwarders Association (FEAFFA) with support from the Commonwealth Secretariat also decried the low uptake of the programme.
The study blamed a lack of knowledge on the benefits accruing to those accredited as AEO run by the Customs Authorities in the East African region has led to its low uptake, according to industry players.
This is a result of a lack of adequate sensitization among the industry stakeholders and tedious application processes that take long without sufficient guarantee that one will finally get accreditation, the report noted.
There is also a lack of harmony and standard application and accreditation procedures, which particularly affects the regional AEOs uptake.
The uptake has been averaging 27 economic operators authorized each year between 2015 and 2019.
“Majority of the operators currently reporting benefits from the AEO program are by default relatively large operators. Smaller operators expressed feelings of exclusion and low value for money,” noted the study.
There is a clear lack of motivation. The application process is very complex and the AEOs programmes are not known or recognized by other agencies save for customs and the Bureau of Standards, according to Roy Mwanthi, Kenya International and Warehousing Association (KIFWA) Chairman.
However, this is expected to change in the coming days if the ongoing efforts to create awareness yields result. There is a need to bring all other partner government agencies on board to break the existing bottlenecks, stakeholders have recommended.
There is also a need to add other players to the AEO transaction pairing including transporters and manufacturers. Revenue authorities are also expected to support sensitization on AEOs.
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