Duty Remission

The EAC Customs Management (Duty Remission) Regulations, 2008

IN EXERCISE of powers conferred by Section 140 of the East African Community Customs Management Act, 2004, the Council of Ministers makes these Regulations this 17th day of March 2008.

Citation and commencement

1. These Regulations may be cited as the East African Community Customs Management (Duty Remission) Regulations, 2008.
2. These Regulations shall come into force on such date as the Council may, by notice published in the Gazette, appoint

Interpretation.

In these Regulations, unless the context otherwise requires-

“Committee” means the Duty Remission Committee established under regulation 4;

“manufacture” means any process by which a commodity is finally produced and includes assembling, packing, bottling, repacking, mixing, blending, grinding, cutting, bending, twisting, joining, or other similar activity;

“manufacturer” means a manufacturer or producer to whom remission is granted and published in the Gazette in accordance with section 140 of the Act.

Goods on which remission may be granted.

The Council may grant remission of duty under section 140 of the Act on -

1. Goods imported for use in the manufacture of goods for export;
2. Such goods imported for use in the manufacture of approved goods for home consumption as the Council may, from time to time, by notice in the Gazette, determine.

Application for remission of duty.

1. An application for remission of duty shall be made to the Council through the Commissioner in Form R1 in the Schedule to these Regulations.
2. Upon receipt of an application for remission, the Commissioner shall forward the application to the Committee for its comments.
3. The Commissioner shall after receiving the comments under sub regulation (2) forward the application together with his or her comments to the Council.
4. The Council may for reasons to be communicated to the applicant reject an application for remission under these Regulations.

Validity of Duty Remission.

1. Remission of duty granted under these Regulations shall be valid for a period of twelve months from the date of the publication of the grant in the Gazette.
2. The Council, may on the application by a manufacturer, grant remission on such further quantity of goods to be imported by the manufacturer under these Regulations.
3. The Council may, on application by a manufacturer, extend the period referred to in sub regulation (1) for a further period of six months.

Conditions attached to remission of duty.

1. A manufacturer of goods for export shall
   • pay duty on any imported goods that are not used in the manufacture of goods for export or where the goods so manufactured are not exported;
   • submit returns quarterly, to the Commissioner giving relevant information as the Commissioner may require.
2. A manufacturer of goods for home use shall-
   • pay duty on any imported goods that are not used in the manufacture of goods for which such goods were approved;
   • submit returns quarterly, to the Commissioner giving relevant information as the Commissioner may require.
3. Where a manufacturer is liable to pay duty under subregulation (1) (a) suregulation 2(a), the manufacturer shall, in addition to paying the duty applicable, be liable to pay a penalty of ten percent of the dutiable value.
4. A person who fails to submit returns as required under this regulation commits an offence and shall be liable on conviction to a fine of two thousand dollars.

Entry and bond for goods imported

1. Imported goods to which these Regulations apply shall be entered using Form C17
2. A manufacturer of goods imported for use in the manufacture of goods for export under these regulations shall execute a bond in accordance with sections 106 and 107 of the Act using Form CBR1
3. A bond executed under sub regulation (2) shall cover the entire quantity approved and published in the Gazette by the Council.

Cancellation of bond.

A security bond shall be cancelled upon –

1. proof of exportation of the manufactured goods;
2. payment of duty and the penalty under regulation 7;
3. proof of transfer of goods under regulation 11;
4. proof of destruction of the goods.

By-products, scrap or waste from process of manufacture

Where a by-product, scrap or waste of commercial value results from a process of manufacture or production utilizing goods subject to duty remission, duty shall be payable on the prevailing value of the by- product, scrap or waste in accordance with the Act, unless the by-product, scrap or waste is exported or destroyed under the supervision of the proper officer.

Transfer, etc. of goods

1. Manufactured goods resulting from approved imported goods under these Regulations may be transferred to another manufacturer, with the approval of the Commissioner, to another manufacturer for use in the manufacture of goods for export.
2. The transfer of goods under sub regulation (1) shall-
   • be in Form R2
   • be secured by a bond executed using Form CBR2 by the recipient of the transferred goods and shall be in such amount as may be determined by the Commissioner.

Commissioner may authorise re-exportation.

The Commissioner may authorize re-exportation of goods on which duty remission is granted under these Regulations.

Maintenance of books and records

A manufacturer shall maintain separate books and records relating to-

1. locally sourced goods;
2. goods imported by the manufacturer;
3. goods received by a manufacturer by way of transfer under regulation 11.

Powers of a proper officer

A proper officer may inspect and verify books and records, production facilities of a manufacturer and examine any goods or materials within the production facility or any storage place relating thereto.

Revocation of grant

The Council may for reasons to be communicated to the applicant revoke a grant of duty remission.