The Standards (Import Cargo Consolidation) Regulations, 2021 seeks to govern the registration of import cargo consolidators.
| PROPOSED PROVISION FOR AMENDMENT | PROPOSED AMENDMENT | OUR COMMENTS |
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| Regulation 2 Interpretation | “Consolidated cargo” means cargo belonging to various persons assembled into one consignment at the country of supply which may be declared as belonging to one importer at the port of destination and de-consolidated into the original individual consignments for delivery to the respective cargo owners upon arrival at the port of destination or the consolidator’s warehouse. | Consolidation of cargo reduces the cost of importing goods. Secondly, consolidation simplifies the logistics and inventory management process. Instead of dealing with multiple small shipments, a consolidated shipment reduces the complexity of tracking and handling inventory. |
| “Consolidator” means a person who assembles cargo belonging to various persons to form one consignment at the country of supply which may be Interpretation declared as belonging to one importer at the port of destination and de-consolidate into the original individual consignments for delivery to the respective individual cargo owners on arrival at the port of destination or consolidator’s warehouse. | We propose the addition of the words “registered under the Regulations” immediately before the words “who assembles”. This proposal ensures that only persons who are registered as consolidators can consolidate cargo. |
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| "Cargo de-consolidation” means the disaggregation of a consolidated consignment into individual parts belonging to different cargo owners. | Cargo de-consolidation enables the separation of shipments, facilitates custom clearance procedures, and enables the timely distribution of consolidated cargo to individual consignees. | |
| “Committee” means the Joint Vetting Committee established under these regulations. | We propose the removal of the definition of “Committee”. The Joint Vetting Committee (“the Committee”) has not been established in the Standards Act Cap 496 of the Laws of Kenya (“the Standards Act”). This has been comprehensively covered in regulation (7) below. |
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| “Recognized Association for Consolidators” means as an association of consolidators registered by the registrar of societies. | We propose that the definition of “Recognized Association for Consolidators” appears immediately after the definition of “Category C consolidator”. Terms defined in regulation 2 are arranged alphabetically. |
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“Category A consolidator” means a consolidator who licensed under shipping and merchants Act. | We propose the addition of the word “is” immediately after the word “who”. We propose the addition of the word “the” immediately after the word “under”. We propose that the words “shipping” and “merchant” start with a capital letter. |
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| “Category B consolidator” means a consolidator who consolidates goods at the country of export, organizes inspection of the consignment, ship as one consignment, deconsolidates, may deliver to the individual consignees after customs clearance and has a licensed warehouse at the country of export. “Category C consolidator” means a Courier Company which undertakes consolidation and deconsolidation of parcels which are guided by a unified licensing framework under the Kenya Information and Communications (Postal and Courier Services) Regulations, 2010. | The Standards (Import Cargo Consolidation) Regulations, 2021 (“the Regulations”) provide for various categories of consolidators that small and medium enterprises may use to import consolidated cargo from the country of export. |
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| We propose that a definition of “consignee” be added to this regulation. | The Regulations have referred to a consignee without providing a definition of the term. | |
| Regulation 3 Scope of the Regulations | These regulations shall apply to all consolidators importing consignments to Kenya. | Clearly defining the scope of the Regulations ensures the law is applied only where it’s intended. This prevents potential overreach or underreach of the law. |
| Regulation 4 Application for registration as a category A consolidator | A person who wishes to operate as a category A consolidator shall apply to the Director for registration in the prescribed form 1 as set out in the First Schedule. A person shall be qualified to be registered as a category A consolidator if the person: a. holds a valid license issued under Kenya shipping and merchant Act; b. meets the requirements as set out in the First Schedule; c. is tax compliant; d. is a member in a good standing with a Recognized Association for Consolidators; and e. has not committed any offence relating to importation of substandard or counterfeit goods. A person who applies to be registered as a consolidator under sub-regulation (1) shall pay processing fees as prescribed under item no. 4 of the First Schedule. | Regulation 4(1) contradicts section 14C of the Standards Act which provides that vetting and registration of consolidators shall be done by the Kenya Bureau of Standards (“KEBS”) in consultation with the Kenya Revenue Authrority (“KRA”). Therefore, an amendment of the Standards Act would be necessary to incorporate the proposed change in this regulation. For sub-regulation (2)(a), we propose that the words “shipping” and “merchant” start with a capital letter. |
| Regulation 5 Application for registration as a category B consolidator | A person who wishes to operate as a category B consolidator shall apply to the Director for registration in the prescribed form 2 as set out in the First Schedule. A person shall be qualified to be registered as a category B consolidator if the person: a. meets the requirements as set out in the First Schedule; b. is tax compliant; c. is a member in a good standing with a Recognized Association for Consolidators; d. has a warehouse in the country of origin and country of destination that meets the conditions set out in form 4 of the First Schedule; and e. has not committed any offence relating to importation of substandard or counterfeit goods. A person who applies to be registered as a consolidator under sub-regulation (1) shall pay processing fees as prescribed under item no. 4 of the First Schedule. | Regulation 5(1) contradicts section 14C of the Standards Act. It is well recognized that an instrument of subsidiary legislation cannot override the provisions of an Act of Parliament. This was the sentiment of the Supreme Court in Evans Odhiambo Kidero & 4 Others v Ferdinand Ndungu Waititu & 4 others [2014] eKLR. |
| Regulation 6 Application for registration as a category C consolidator | A person who wishes to operate as a category C consolidator shall apply to the Director for registration in the prescribed form 2 as set out in the First Schedule. A person shall be qualified to be registered as a category C consolidator if the person: a. holds a valid license under Kenya Information and Communications (Postal and courier services) Regulations, 2010; b. meets the requirements as set out in the First Schedule; c. is tax compliant; d. is a member in a good standing with a Recognized Association for Consolidators; and e. has not committed any offence relating to importation of substandard or counterfeit goods. A person who applies to be registered as a consolidator under sub-regulation (1) shall pay processing fees as prescribed under Item no. 4 of the First Schedule. | Regulation 6(1) contradicts section 14C of the Standards Act which provides that vetting and registration of consolidators shall be done by KEBS in consultation with KRA. |
| Regulation 7 Joint Vetting Committee | The Director shall establish a committee to be known as the Joint Vetting committee. The Committee shall comprise of 9 members drawn from KRA and KEBS. The Committee shall be chaired by a representative from KEBS. The quorum for the Committee shall be five members which shall include a representative from KRA. The Committee shall formulate its own procedures for the conduct of its business. The functions of the Committee shall be to: a. vet and recommend consolidators for registration; b. review the process of vetting and registration of consolidators.; c. conduct, where necessary inspection of the consolidators warehouses both locally and abroad; d. ensure that public awareness and education on import consolidation is conducted; e. document, maintain and disseminate reports on import consolidation; f. review complaints against registered consolidators; and g. review compliance to conditions of registration under these regulations and recommend for suspension or revocation. In the performance of its functions under sub regulation (6), the Committee shall have powers to: a. require the consolidator to furnish it with such further information or document as it may deem necessary; b. Confirm the authenticity of any document submitted by a person seeking registration as a consolidator; and c. inspect the premises in which goods in respect of which these regulations apply are warehoused or kept. | The Committee has not been established in the Standards Act. It has only been established in the Regulations. Secondly, the Standards Act has not given the Director power to establish the Committee. Section 31 (b) of the Interpretation and General Provisions Act Cap 2 of the Laws of Kenya (“IGPA”) states as follows: “No subsidiary legislation shall be inconsistent with the provisions of an Act.” Therefore, regulation 7 contradicts both the Standards Act and the IGPA. To conclude, we propose that an amendment of the Standards Act would be prudent to incorporate the contents of this regulation. |
| Regulation 8 Vetting of consolidators | A person who applies to be registered as a consolidator shall be vetted by the Committee. The Committee shall recommend to the director in writing whether or not a person shall be registered as a consolidator and if the Committee recommends against such registration, it shall set out its reasons for the recommendation. | Regulation 8 provides that vetting of a person who registers to be a consolidator shall be done by the Committee. This contradicts section 14C of the Standards Act which mandates KEBS in consultation with KRA to vet all consolidators of sea and air cargo. |
| Regulation 9 Notification of the outcome of vetting | The Director shall notify applicants the outcome of the registration in writing: a. approval of the application if the application was successful; and b. to unsuccessful applicant the notification shall set out the reasons thereof. Upon notification of approval of registration, the applicant that shall pay fees prescribed in item no. 4 of the First Schedule. A certificate of registration shall be issued to the consolidator by the Director. Registration certificate shall be valid for two calendar years. The consolidator shall apply for renewal of the certificate of registration at least three months before expiry and pay prescribed fees under First Schedule. A certificate of registration issued to cargo consolidator under this Regulations shall be non-transferable. The director shall circulate a list of registered consolidators to the relevant. | The Standards Act has not given the Director power to notify applicants on the outcome of the registration process. It is quite apparent that the Regulations conflict with the Standards Act. However, an amendment of the Standards Act would be necessary to incorporate this proposal. For sub-regulation (4), we propose the addition of the word “the” immediately before the word “registration”. This proposal will provide clarity to the sub-regulation. For sub-regulation (4), we propose the deletion of the words “registration certificate” and replacing it with the words “certificate of registration”. This proposal seeks to streamline the Regulations and enhance uniformity. The sub-regulations are incorrectly numbered. We propose that the sub-regulations be correctly numbered. Sub-regulation (7) is incomplete. This makes the sub-regulation to be ambiguous. We propose that the missing words be added to provide clarity. |
| Regulation 10 Obligations of a registered consolidator | Every consolidator shall: a. comply with relevant legal and statutory requirements relating to consolidation; b. comply with any registration prescribed in these regulations; c. maintain a record of cargo handled including a separate register of damaged and lost cargo and keep the records for a period of five years; d. establish a system of dealing with complaints of consignees or agents of consignee; e. maintain books of accounts; f. display at a conspicuous place in the consolidators’ s place or places of business the applicable tariff and terms for all items charges; g. have access to a warehouse in the country of export and Kenya which fulfills the requirement specified in Form 4 in the First Schedule; h. Pay prescribed fees set out in item 4 of the First Schedule; and i. employ operations staff with who possess at least a certificate in maritime transport logistics, shipping management, clearing and forwarding, or tax and Customs administration, or their equivalent. | Clearly stating the obligations reduces ambiguity, ensuring that people know what is expected of them. Secondly, by outlining the obligations, statutes provide a basis for enforcing legal rights and holding individuals accountable for their actions. For regulations 10(c)(e), we propose the use of recycling as a mode of disposing the records. Disposal of records by way of recycling ensures the consolidator complies with article 42 of the Constitution. |
| Regulation 11 Suspension and Revocation of Registration | The committee may recommend to the Director the suspension or revocation of a certificate of registration if: a. satisfied that the registration was obtained by any false, incorrect or misleading statement made by the applicant; b. the consolidator fails to comply with any condition of registration under these regulations; c. the consolidator or any of the consolidator’s directors or agents is convicted of an offence under the Act, or Anti-Counterfeit Act; any tax law or any other law relating to importation of goods; and d. the consolidator, or the consolidator’s directors or agents, has been convicted of a criminal offence involving fraud, misrepresentation or dishonesty. The Director upon receipt of the recommendation may suspend or revoke consolidator registration certificate and notify the consolidator and other relevant agencies in writing. | The Director’s power to revoke or suspend a certificate of registration has not been provided for in the Standards Act. The Regulations conflict with the provisions of the Standards Act as the former cannot override the latter. Therefore, an amendment to the Standards Act would be necessary to incorporate this change. |
| Regulation 12 Appeals | A person who is aggrieved by the decision of the Director under the Regulations may appeal to the Standards Tribunal against the decision. | Section 11 of the Standards Act provides that an appeal may be made to the Standards Tribunal (“the Tribunal”) if a person is dissatisfied with a decision of KEBS or the National Standards Council. This means that a person aggrieved by the Director’s decision cannot appeal to the Tribunal. Secondly, we propose that templates of the documents required to be lodged at the Tribunal be provided in the Schedule of the Regulations. A template ensures consistency in formatting and structure across multiple documents. This makes the document easier to read and reduces the risk of errors and omissions. |
Regulation 13 Offences | A person commits an offence if that person imports as a consolidator without being registered as required under this section commits an offence and shall upon conviction be liable to a fine of not exceeding one million shillings or imprisonment for a term not exceeding one year, or to both. | We propose that the missing sub-regulations be added to the Regulations. Incorporating this change will enhance clarity. |