Local Manufacturers Export Compensation Act Cap 482 - as Plain Text by MWakili

LAWS OF KENYA LOCAL MANUFACTURES (EXPORT COMPENSATION) ACT CHAPTER 482 Revised Edition 2012 [1987] Published by the National Council for Law Reporting with the Authority of the Attorney-General www.kenyalaw.org [Rev.

2012] CAP.

482 Local Manufactures (Export Compensation) CHAPTER 482 LOCAL MANUFACTURES (EXPORT COMPENSATION) ACT ARRANGEMENT OF SECTIONS Section 1.

Short title.

2.

Interpretation.

3.

Compensatory payments.

4.

Deduction in respect of compensatory payments.

5.

Restriction on payments.

6.

Application for payment.

7.

Action to be taken on application.

8.

Offences.

9.

Liability of employers and of officers of companies.

10.

Proceedings.

11.

Repealed 12.

Regulations.

SCHEDULES FIRST SCHEDULE Repealed SECOND SCHEDULE Repealed 3 [Issue 1] [Rev.

2012] CAP.

482 Local Manufactures (Export Compensation) CHAPTER 482 LOCAL MANUFACTURES (EXPORT COMPENSATION) ACT [Date of assent: 12th June, 1974.] [Date of commencement: 1st November, 1974.] An Act of Parliament to provide for compensatory payments to be made in respect of certain locally manufactured goods which are exported from Kenya and for matters connected therewith and incidental thereto [Act No.

9 of 1974, L.N.

263/1974; L.N.

264/1974, L.N.

117/1976, Act No.

11 of 1976, Act No.

8 of 1977, Act No.

12 of 1977, L.N.

86/1977, L.N.

105/1977, L.N.

16/1978, L.N.

17/1978, Act No.

8 of 1978, Act No.

13 of 1978, Act No.

10 of 1980, Act No.

14 of 1982, L.N.

82/1984, Act No.

8 of 1985, L.N.

35/1985, L.N.

252/1985, Act No.

10 of 1986, L.N.

261/1986, L.N.

75/1987; Act No.

10 of 1987, Act No.

10 of 1988, L.N.

30/1989; Act No.

8 of 1989, L.N.

152/1989; Act No.

10 of 1990, Act No.

8 of 1991, L.N.

6/1992; Act No.

9 of 1992, L.N.

12/1993; L.N.

88/1993; Act No.

4 of 1993.] 1.

Short title This Act may be cited as the Local Manufactures (Export Compensation) Act.

2.

Interpretation In this Act, unless the context otherwise requires appointed dealer means an authorized dealer appointed under section 3 to pay compensatory payments on behalf of the Commissioner; authorised dealer means a person who is authorised under the Exchange Control Act (Cap.

113) to deal in foreign currency; Commissioner means the person for the time being having charge of the Customs and Excise Department; compensatory payment means a payment provided for by section 3.

eligible goods deleted by Act No.

4 of 1993, s.

34(a); export means to take or cause to be taken out of Kenya by air, land or water, and includes a supply to an export processing zone; export processing zone means an export processing zone designated under the Export Processing Zones Act (Cap.

517); Foreign Currency means currency other than that of Kenya; originating in Kenya, in relation to goods, means that those goods (a) have been produced wholly in Kenya; or (b) have been produced in Kenya and the total value of imported materials, or materials of undetermined origin, which have been used at any stage in the production of the goods does not exceed seventy percent of the ex-factory value of the goods.

[Act No.

8 of 1978, s.

11, Act No.

10 of 1986, s.

28, Act No.

10 of 1990, s.

34, Act No.

4 of 1993, s.

34(a).] 5 [Issue 1] CAP.

482 [Rev.

2012] Local Manufactures (Export Compensation) 3.

Compensatory payments Subject to this Act, a person who exports eligible goods shall be paid by or on behalf of the Commissioner a compensatory payment: Provided that no compensatory payment shall be paid by or on behalf of the Commissioner in respect of the exportation of eligible goods (i) which by the process of their manufacture include goods, whether eligible goods or ineligible goods, specified in and for the purposes of an order made under section 138 of the Customs and Excise Act (Cap.

472) (which provides for remission of certain duties); or (ii) specified in and for the purpose of an order made under section 145 (1) of the Customs and Excise Act (Cap.

472) (which provides for refunds of certain duties); or (iii) which are manufactured under bond licensed for the purpose of exports under section 58A of the Customs and Excise Act (Cap.

472); or (iv) which by the process of manufacture include goods, whether eligible for export compensation or not, which have been the subject of a remission, rebate or refund of duty upon or after importation, under any provisions of the Customs and Excise Act (Cap.

472).

[Act No.

11 of 1976, s.

8, Act No.

14 of 1982, s.

15, Act No.

8 of 1991, s.

50, Act No.

4 of 1993, s.

34(b).] 4.

Deduction in respect of compensatory payments The Commissioner shall deduct the amount of all compensatory payments from the payments of customs and excise revenue falling to be paid by him into the Consolidated Fund.

[Act No.

8 of 1977, s.

5, Act No.

13 of 1978, Sch.] 5.

Restriction on payment (1) No compensatory payment shall be made in respect of the exportation of eligible goods before (a) the exportation is completed; and (b) foreign currency due in respect of the exportation has been received in Kenya by an authorized dealer or payment has been made or settlement effected in accordance with a bilateral agreement between the Government of Kenya and any other government.

(1A) Notwithstanding subsection (1), no compensatory payment shall be made in respect of gold (non-monetary) and articles thereof, other precious and semi-precious metals or stones and their articles in semi-manufactured or fully manufactured form, before they are presented to the proper officer of customs for physical examination and certification prior to exportation: (1B) Notwithstanding the provision of subsection (1) (b) and subject to such conditions as may be prescribed by the Minister, compensatory payment may be made before foreign currency due in respect of such exportation has been received.

[Issue 1] 6 [Rev.

2012] CAP.

482 Local Manufactures (Export Compensation) Provided that compensatory payment under this subsection shall be made only if the claimant has (a) undertaken to produce evidence of receipt of the relevant foreign currency in full within ninety days from the date of payment; or (b) furnished a bond security in such sum of money, not being less than the compensatory payment claimed, as the Commissioner may determine.

(2) For the purposes of subsection (1), exportation of goods shall be deemed to be completed (a) in the case of exportation by sea or air, at the time at which the vessel or aircraft carrying the goods departs from its final berth, anchorage or position at the port or airport within Kenya at which the goods are shipped for export; (b) in the case of exportation by land, at the time at which the vehicle carrying the goods passes across the external frontiers of Kenya; and (c) in the case of exportation by parcel post, at the time the export entry document is stamped by a proper officer of customs.

(3) Where eligible goods which have been exported are subsequently, for whatsoever reason, imported into Kenya, the exportation shall be deemed not to have taken place, and any compensatory payment made in respect thereof shall be repaid to the Commissioner by the person by whom it was received.

(4) Where there is no evidence of receipt of foreign exchange in respect of goods for which export compensatory payment has been made in accordance with subsection (1B) within ninety days from the date of payment, the export compensatory payment made, together with a penalty of three percent of the compensatory payment per month or part thereof, with effect from the date of payment shall, subject to section 8, forthwith be payable to the Commissioner by the person who received the compensatory payment.

[Act No.

8 of 1978, s.

11, Act No.

10 of 1987, s.

28, Act No.

10 of 1990, s.

35, Act No.

8 of 1991, s.

51 Act No.

9 of 1992, s.34(a).] 6.

Application for payment An application for a compensatory payment made by a person claiming to be entitled thereto shall be made to the Commissioner, through the Treasury, a person appointed by the Treasury or an appointed dealer as the case may be, in the prescribed form.

[Act No.

10 of 1987, s.29.] 7.

Action to be taken on application (1) Where an application for compensatory payment is received by the Treasury or a person appointed by the Treasury or an appointed dealer, any of them shall, if satisfied that exportation of the eligible goods concerned is completed as required by section 5, notify the Commissioner the appropriate amount of compensatory payment due to the exporter in respect of the exports and when so authorized by the Commissioner, shall pay to the applicant on behalf of the Commissioner the appropriate amount of compensatory payment.

7 [Issue 1] CAP.

482 [Rev.

2012] Local Manufactures (Export Compensation) (2) In respect of an application for a compensatory payment, the Commissioner (a) if he is satisfied that the applicant is not entitled thereto, or that there has been a breach of this Act or regulations made thereunder in relation to the eligible goods concerned, or to the exportation thereof, may disallow the application in whole or in part; or (b) in any other case, shall allow the application.

(3) Where an application is disallowed under paragraph (a) of subsection (2), any payment made under subsection (1) in relation to that application shall be repayable to the Commissioner by the person by whom it was received to the extent required by the disallowance.

[Act No.

10 of 1987, s.30.] 8.

Offences (1) A person who (a) knowingly or recklessly makes or causes to be made a statement, whether oral or in writing, in or for the purposes of an application under section 6, which is false in a material particular; or (b) fails, in such an application, to disclose information material to the application which is within his knowledge; or (c) fails to comply with a condition applicable to the allowance of such an application, shall be guilty of an offence and liable to a fine not exceeding one hundred thousand shillings or to imprisonment for a term not exceeding five years or to both or to both.

(2) Upon the conviction of a person for an offence under subsection (1), an amount equivalent to twice the export compensatory payment made in respect of the application concerned, together with a penalty of three percent per month or part thereof, with effect from the date the compensatory payment was made, shall forthwith be payable to the Commissioner by the person who received the compensatory payment, whether such person is the person so convicted or not.

[Act No.

10 of 1986, s.

28, Act No.

10 of 1990, s.36.] 9.

Liability of employers and of officers of companies (1) Where an offence under paragraph (a) or (b) of subsection (1) of section 8 of this Act is committed by an employee or agent, the person by whom such employee or agent is employed shall, if he is a person who has received or may have expected to receive a compensatory payment as a result of the application concerned, be guilty of the same offence unless he proves to the satisfaction of the Court that he did not know, and could not reasonably be expected to know, that the act or omission constituting the offence was taking place, and that he took all reasonable steps to ensure that the offence was not committed.

(2) Where a person convicted of an offence under this Act is a limited company, every director of the company, and every officer of the company concerned in the management thereof, shall also be guilty of the offence unless he proves to the satisfaction of the Court that the act or omission constituting the offence took place without his knowledge or consent and that he could not reasonably be expected to have that knowledge.

[Issue 1] 8 [Rev.

2012] CAP.

482 Local Manufactures (Export Compensation) 10.

Proceedings (1) A sum stated by this Act to be repayable to the Commissioner shall be a civil debt recoverable summarily by the Commissioner from the person responsible for the repayment.

(2) Any officer, as defined in the Customs and Excise Act (Cap.

472), shall, subject to the control of the Attorney-General, have power to conduct a prosecution for an offence against this Act and for that purpose shall have all the powers of a public prosecutor appointed under the Criminal Procedure Code (Cap.

75).

[Act No.

8 of 1978, s.

11.] 11.

Repealed by Act No.

4 of 1993, s.

34(c).

12.

Regulations (1) The Minister may make regulations for the better carrying into effect of the purposes and provisions of this Act and, without prejudice to the generality of the foregoing, regulations may be made for the purposes of (a) prescribing anything which is to be, or may be, prescribed under this Act; (b) regulating applications under section 6, and providing for the method of proof of any matters required to be fulfilled or proved for the purposes of any such application; (c) the administration and application of the provisions of this Act in relation to the production and origin of eligible goods and the application of the percentage criterion in the ex factory value of eligible goods; (d) prescribing the information to be supplied, by the exporter or producer, or other person concerned in the production or exportation, of eligible goods, for the purposes of the proper valuation of those goods; (e) providing for the production of books of account and other documents relating to the purchase, production, sale or exportation of eligible goods.

(2) Regulations may prescribe the penalties, not exceeding a fine of ten thousand shillings, which may be annexed to a breach of the regulations.

FIRST SCHEDULE [Repealed by Act No.

4 of 1993, s.

34(d).] SECOND SCHEDULE [Repealed by Act No.

4 of 1993, s.

34(d).] 9 [Issue 1] [Rev.

2012] CAP.

482 Local Manufactures (Export Compensation) [Subsidiary] CHAPTER 482 LOCAL MANUFACTURES (EXPORT COMPENSATION) ACT SUBSIDIARY LEGISLATION List of Subsidiary Legislation Page 1.

Local Manufactures (Export Compensation) (Procedures) Regulations, 1974 13 2.

Local Manufactures (Export Compensation) (Origin of Eligible Goods) Regulations, 1974.

21 11 [Issue 1] [Rev.

2012] CAP.

482 Local Manufactures (Export Compensation) [Subsidiary] LOCAL MANUFACTURES (EXPORT COMPENSATION) (PROCEDURES) REGULATIONS, 1974 ARRANGEMENT OF REGULATIONS Regulation 1.

Citation.

2.

Interpretation.

3.

Declaration of eligible goods.

4.

Loading of eligible goods.

5.

Applications to appointed dealers.

5A.

Application to include goods in eligibility lists.

6.

Production of records.

7.

Deferment of payment.

8.

Forwarding of applications.

9.

Payment to appointed dealers.

10.

Payments to exporters.

11.

Offences.

SCHEDULE 13 [Issue 1] CAP.

482 [Rev.

2012] Local Manufactures (Export Compensation) [Subsidiary] LOCAL MANUFACTURES (EXPORT COMPENSATION) (PROCEDURES) REGULATIONS, 1974 [L.N.

265/1974, L.N.

125/1986, L.N.

145/1987, L.N.

217/1990, L.N.

143/1992.] REGULATIONS UNDER SECTION 12 1.

Citation These Regulations may be cited as the Local Manufactures (Export Compensation) (Procedures) Regulations, 1974.

2.

Interpretation In these Regulations, proper officer has the meaning assigned to it under the Customs and Excise Act (Cap.

472).

3.

Declaration of eligible goods (1) Any person or his authorized agent who exports eligible goods and wishes to claim compensatory payment under the Act, shall, at the time of entry of the such goods for export, declare on the appropriate customs entry that (a) such goods have been wholly produced in Kenya; or (b) such goods have been produced in Kenya and the value of materials imported from outside Kenya or of undetermined origin which have been used at any stage in the production of the goods does not exceed seventy percent of the ex-factory value of the goods; and (c) it is his intention to claim compensatory payment in respect of the goods in accordance with the Act.

(2) Where an exporter delivers an entry under this Regulation, he shall furnish therewith to the proper officer full particulars supported by documentary evidence of the goods referred to in the entry.

4.

Loading of eligible goods No eligible goods in respect of which a claim for compensatory payment is to be made shall be loaded on an aircraft, vessel or vehicle departing to a foreign port unless (a) the goods (other than gold) have been entered, examined (if the proper officer so wishes) and released for export by the proper officer, or (b) the gold (non-monetary), other precious and semi-precious metals or stones and articles thereof, in manufactured or semi-manufactured form, have been produced to the proper officer together with all the supporting documents for physical examination, certification and application of the customs seal prior to release for export.

[L.N.

143/1992.] 5.

Applications to appointed dealers (1) Applications under section 6 of the Act for compensatory payments shall be in the Form E.C.

2 set out in the Schedule to these Regulations.

(2) No application shall be accepted unless (a) it is completed to the satisfaction of an appointed dealer; and [Issue 1] 14 [Rev.

2012] CAP.

482 Local Manufactures (Export Compensation) [Subsidiary] (b) it is presented with all the relevant documents relating to the exportation of the goods, including (i) a copy of the Export Entry duly certified by the proper officer that he has released the goods and that exportation has been completed and evidence of receipt of the foreign currency therefor, or (ii) a copy of the Export Entry duly certified by the proper officer that he has released the goods and that exportation has been completed and evidence from the Treasury or a person appointed by the Treasury that payment has been made or settlement effected in accordance with a bilateral agreement between the Government of Kenya and another Government; or (iii) a copy of the Export Entry duly certified by the proper officer that he has released the goods and that exportation has been completed and a bond security form E.C.B.

1 duly executed, within twelve months of the date on which the goods were exported or within such further period after that date as the Commissioner may specifically authorise.

[L.N.

125/1986, r.

2(a), L.N.

145/1987, r.

2, L.N.

217/1990, r.

2.] 5A.

Application to include goods in eligibility lists (1) Where any person wishes to export goods which he considers should have been eligible but have not been specified in the Second Schedule to the Act, he shall first make application to the Minister in the Form E.C.

1 in the Schedule, giving full particulars of the process of manufacture and stating reasons which he considers relevant thereto.

(2) If the goods are found to be in compliance with all the conditions stipulated in the Act including any other conditions which the Minister may deem necessary, then such goods shall be included in the Second Schedule to the Act in accordance with section 12.

[L.N.

125/1986, r.

2(b).] 6.

Production of records The exporter or producer of eligible goods shall, on request by a proper officer, produce for inspection by that officer the books of account and other documents relating to the purchase, production, sale or exportation of the goods.

7.

Deferment of payment If an exporter of eligible goods fails to comply with any of the provisions of these Regulations or fails to repay upon demand any compensatory payments made in error or otherwise, the Commissioner shall defer payment until the exporter complies with the Regulations: Provided that where the Commissioner so defers an application, the exporter shall be informed in writing specifying the regulation or regulations with which he has failed to comply.

8.

Forwarding of applications An appointed dealer shall, within thirty days of receipt of an application by exporter for compensatory payment, forward the application to the Commissioner certifying the amount of foreign exchange which has been received in respect of the relevant shipment of eligible goods: Provided that no appointed dealer shall be required to forward an application until he is satisfied that it meets the requirements of the Act and these Regulations.

15 [Issue 1] CAP.

482 [Rev.

2012] Local Manufactures (Export Compensation) [Subsidiary] 9.

Payment to appointed dealers The Commissioner shall pay to the appointed dealers from revenue collected on behalf of the Government in accordance with section 4 of the Act on receipt of applications forwarded under regulation 8, the compensatory payments which have been claimed in full compliance with the Act and these Regulations: Provided that (i) payment shall not prevent the Commissioner subsequently adjusting or reclaiming the amount paid, in accordance with regulation 7; (ii) the Commissioner may demand other supporting information from appointed dealers relating to claims for compensatory payments as he may feel to be necessary.

10.

Payments to exporters An appointed dealer shall, within seven days of receipt of a compensatory payment from the Commissioner, pay such sums as he may have been authorised to exporters: Provided that, in the event of the Commissioner subsequently reclaiming an amount in accordance with regulation 9, an appointed dealer may reclaim that amount from the exporter.

11.

Offences A person who contravenes regulation 4 or 6 shall be guilty of an offence and liable to a fine not exceeding ten thousand shillings.

SCHEDULE FORMS Form E.C.1 (Rule 5A(1)) LOCAL MANUFACTURES (EXPORT COMPENSATION) (PROCEDURES) REGULATIONS, APPLICATION FOR GOODS TO BE INCLUDED IN THE ELIGIBILITY LIST FOR EXPORT COMPENSATION PAYMENT (To be completed in triplicate with copies of Certificate of Incorporation or Registration) 1.

Applicant: Name and address:.

.

.

.

Telephone No.

.

Plot No.

.

Street.

Exporters Registration (Central Bank) Certificate No.

.

Exporters Code (Customs) No.

.

Bankers.

2.

Goods: Description of goods.

.

.

Statistical Code No.

.

Customs Tariff No.

.

Rate of import duty.

Rate of sales tax.

[Issue 1] 16 [Rev.

2012] CAP.

482 Local Manufactures (Export Compensation) [Subsidiary] SCHEDULE, Form E.C.1continued 3.

Raw Materials: (a) Imported: Description.

Statistical Code No.

.

Rate of sales tax.

Other taxes and rates.

(b) Local: Statistical Code No.

.

Rate of sales tax.

4.

Exports made in the last three years: Year Quantity Value KSh.

.

.

.

.

.

.

.

.

.

5.

Inputs: Give full details of all inputs used to produce the goods showing the percentages of the imported and local proportions, exclusive of duties and taxes.

(List the ingredients together with the cumulative proportions).

(a) Imported.

%.

% (b) Local.

%.

%.

% 6.

Additional information: Give any additional relevant information.

.

.

I/We declare that the information given above is true and correct to the best of my/our knowledge and belief.

.

Signature and designation.

FOR OFFICIAL USE Comments.

.

.

Recommended/Not recommended.

Secretary Export Compensation Vetting Committee Form E.C.2 (Rule 5(1)) LOCAL MANUFACTURES (EXPORT COMPENSATION) (PROCEDURES) REGULATIONS, EXPORTERS CLAIM FOR COMPENSATORY PAYMENT (To be submitted to an Authorised Dealer in triplicate) In accordance with the Local Manufactures (Export Compensation) Act (Cap.

482) I/We.

.

being an approved Exporter, Registration (Central Bank) Certificate No.

.

Code (Customs) 17 [Issue 1] CAP.

482 [Rev.

2012] Local Manufactures (Export Compensation) [Subsidiary] SCHEDULE, Form E.C.2continued No.

.

of (Address).

having exported eligible goods wish to claim compensatory payment as set out below: Export CD 3 Foreign Compensatory Entry Quantity Description Place of No.

and F.O.B Currency Payment No.

and of Goods Export Date Value Received Claimed Date Total I/We certify that the goods exported have been manufactured in Kenya and the value of materials imported from outside Kenya or of undetermined origin (excluding duties and taxes) which have been used at any stage in the production of the goods does not exceed seventy percent of the ex- factory value of the goods.

I/We declare that the information given above is true and correct to the best of my/our knowledge and belief.

Exporters Signature.

Date.

AUTHORISED-DEALERS CERTIFICATE (To be completed by Bank through which the exporter claims) We.

certify that foreign currency amounting to.

has been received from an external source.

Authorised Signature.

Date.

.

.

Full name Designation FOR OFFICIAL USE Compensatory payment approved Sh.

(in words) (Sh.

.

).

Checking Officer.

Refund Voucher No.

.

of.

Authorising Officer.

OFFICIAL STAMP Form C.B.1 (Rule 5(2)) [L.N.

217/1990.] BOND FOR PAYMENT OF EXPORT COMPENSATION TO PRIOR RECEIPT OF FOREIGN CURRENCY I/We.

of.

and.

of.

Hereby acknowledge that I/we am/are bound to the Commissioner of Customs and Excise in the sum of.

shillings to be paid to the Commissioner of Customs and [Issue 1] 18 [Rev.

2012] CAP.

482 Local Manufactures (Export Compensation) [Subsidiary] SCHEDULE, Form C.B.1continued Excise for which payment I/we bind myself/ourselves jointly and severally also my/our heirs, executors, administrators and assigns and each of them.

Dated the ., 20.

WHEREAS the above-named.

has/have applied to the Commissioner of Customs and Excise for payment of export compensation prior to receipt of foreign currency: NOW THEREFORE the condition of this obligation is such that if the above-named.

shall receive and account for the foreign currency in accordance with the Exchange Control Act within ninety days from the date of exportation of eligible goods, then this obligation shall be void but otherwise shall be and remain in full force.

Signed, sealed and delivered by.

the above-named.

in the presence of.

.

Signature Signed, sealed and delivered by.

the above-named.

in the presence of.

Approved on the ., 20.

.

for Commissioner of Customs and Excise 19 [Issue 1] [Rev.

2012] CAP.

482 Local Manufactures (Export Compensation) [Subsidiary] LOCAL MANUFACTURES (EXPORT COMPENSATION) (ORIGIN OF ELIGIBLE GOODS) REGULATIONS, 1974 ARRANGEMENT OF REGULATIONS Regulation 1.

Citation.

2.

Interpretation.

3.

Goods wholly produced in Kenya.

4.

Goods partly produced in Kenya.

5.

Application of regulations 3 and 4.

6.

Mixed consignments.

7.

Segregation of materials.

8.

Mixing of goods.

21 [Issue 1] CAP.

482 [Rev.

2012] Local Manufactures (Export Compensation) [Subsidiary] LOCAL MANUFACTURES (EXPORT COMPENSATION) (ORIGIN OF ELIGIBLE GOODS) REGULATIONS, 1974 [L.N.

266/1974.] 1.

Citation These Regulations may be cited as the Local Manufactures (Export Compensation) (Origin of Eligible Goods) Regulations, 1974.

2.

Interpretation (1) In these Regulations materials include products, parts and components used in the production of goods; produced and a process of production include the application of any operation or process with the exception of an operation or process which consists only of one or more of the following (a) packing, wherever the packing materials may have been produced; (b) splitting up into lots; (c) sorting or grading; (d) marking; (e) putting up into sets.

(2) Energy, fuel, plant, machinery or tools used in the production of approved exports and materials used in the maintenance of such plant, machinery and tools shall be regarded as wholly produced in Kenya when determining the origin of such goods.

(3) In determining the place of production of marine products and goods, a vessel registered or licensed in Kenya shall be regarded as part of the territory of Kenya and, in determining the place from which such goods originated, marine products taken from the sea or goods produced therefrom at sea shall be regarded as having their origins in Kenya if they were taken by, or produced in, a vessel registered or licensed in Kenya and have been brought directly in such vessel to the territory of Kenya.

3.

Goods wholly produced in Kenya For the purposes of section 2 of the Act the following goods, among others, shall be regarded as having been produced wholly in Kenya (a) mineral products extracted from the land in Kenya; (b) vegetable products manufactured in Kenya; (c) live animals born and raised in Kenya; (d) products obtained within Kenya from live animals; (e) products obtained by hunting or fishing within Kenya; (f) marine products taken from the sea by a vessel registered or licensed in Kenya; (g) used articles fit only for the recovery of material provided that they have been collected from users within Kenya; (h) scrap and waste resulting from manufacturing operations within Kenya; (i) goods produced within Kenya exclusively from one or other of the following (i) products under subparagraphs (a) to (h); [Issue 1] 22 [Rev.

2012] CAP.

482 Local Manufactures (Export Compensation) [Subsidiary] (ii) materials containing no element imported from outside Kenya or of undetermined origin.

4.

Goods partly produced in Kenya In determining whether or not goods have been produced in Kenya and whether or not the total value of imported materials, or materials of undetermined origin, which have been used at any stage in the production of the goods exceeds seventy per cent of the ex factory value of the goods for the purposes of section 2 of the Act, the following provisions shall apply (a) any materials which meet the conditions specified in these Regulations in respect of goods which have been produced wholly in Kenya shall be regarded as containing no element imported from outside Kenya; (b) the value of any materials which can be identified as having been imported from a foreign country shall be their c.i.f.

value accepted by the East African Customs and Excise Department on clearance for home consumption or, in the case of materials imported from Uganda or Tanzania, the value ascertained in accordance with Annex V to the Treaty for East African Co- operation as if such goods were liable to transfer tax in Kenya; (c) if the value of materials imported from a foreign country or from Uganda or Tanzania cannot be determined in accordance with paragraph (b) of this regulation, the value shall be the earliest ascertainable price paid for them in Kenya; (d) if the origin of materials cannot be determined, such materials shall be deemed to have been imported from a foreign country and their value shall be the earliest ascertainable price paid for them in Kenya; (e) the ex-factory value of approved exports shall be the price paid or payable for them to the producer in Kenya, that price being adjusted where necessary to a free-on-board or free frontier basis in Kenya; this amount shall also be taken to be the ex-factory value in those cases where the producer is also the exporter of the approved exports; (f) the value under paragraph (b), (c) or (d) of this regulation or the ex-factory value under paragraph (e) of this regulation may be adjusted to correspond with the amount which would have been obtained in the open market between buyer and seller independent of each other; this amount shall also be taken to be the ex-factory value when the goods are not the subject of a sale.

5.

Application of regulations 3 and 4 Subject to regulations 6, 7 and 8 of these Regulations, the provisions of regulations 3 and 4 shall apply to the goods mentioned in regulations 6, 7 and 8.

6.

Mixed consignments (a) Each article in a consignment of imported goods shall be considered separately.

(b) For the purposes of paragraph (a) of this regulation (i) tools, parts and accessories which are imported within an article, the price of which is included in that of the article or for which no separate charge is made, shall be considered as forming a whole within the article so long as they constitute the standard equipment customarily included on the sale of articles of that kind; (ii) in cases not within the ambit of subparagraph (i) of this paragraph, goods shall be treated as a single article, if they are so treated for the purpose of assessing customs duty on like articles.

23 [Issue 1] CAP.

482 [Rev.

2012] Local Manufactures (Export Compensation) [Subsidiary] (c) An assembled or disassembled article which is imported in more than one consignment because it is not feasible to transport or transfer it in a single consignment may, on the option of the importer, be treated as one article.

7.

Segregation of materials For those products or industries where it would be impractical to segregate physically materials of similar character or different origin used in the production of goods, segregation may be replaced by an appropriate accounting system, approved by the Commissioner, which ensures that no more goods are designed to operate in Kenya than would have been the case if it had been possible physically to segregate the materials.

8.

Mixing of goods In the case of mixtures, not being groups, sets or assembles of separate articles dealt with under regulation 6 of these Regulations, the Commissioner may refuse to accept as originating in Kenya a product resulting from the mixing together of goods which would qualify as originating in Kenya with goods which would not so qualify if the characteristics of the products as a whole are not essentially different from the characteristics of the goods which have been mixed.

[Issue 1] 24.