24 June 2018

Kenya: State Agencies Under Scrutiny Over Fake Goods

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opinion

The seizures and eventual destruction of contraband goods worth Sh1.2 billion this week should illustrate Kenya's seriousness in its quest to stem counterfeits and seal taxation loopholes. But does it?

While the series of seizures across the country is a pointer that something is being done to curb the menace, major questions have arisen over the commitment of regulatory and enforcement agencies in fighting the influx of fake products blamed for denying Kenya over Sh100 billion in revenues annually.

One question being raised is how the items find their way into the country and are safely transported to last-mile godowns and eventually placed on store shelves.

Last Tuesday, ready-made undergarments passed off as baby blankets worth Sh11 million, 6,000 rolls of electrical cables worth Sh9.3 million as well as Sh21 million undergarments and misdeclared electrical items worth Sh80 million were found at the Nairobi Inland Container Depot.

Another 40 containers ferrying assorted electronic and other items worth Sh275 million, and Sh828 million worth of cigarettes were also seized in the ongoing purge.

"Suspects arrested at warehouses where counterfeit products were discovered could just be employees of kingpins on the run. We are now after the owners and their government accomplices," said Deputy Head of Public Service Wanyama Musiambo, who heads the multi-agency team on illicit products.

The month-old operations display a clear indication of deep-rooted connections between unscrupulous traders and government officials responsible for enforcing customs, standards and public health, among other tasks that help promote fair trade and quality compliance.

"Civil servants manning border points connive with unscrupulous traders where untaxed products then pass roadblocks before flooding the Kenyan market. This products also endanger the lives of Kenyans," said Mr Musiambo.

While Mr Musiambo, a career policeman, affirmed failure by key agencies, the Kenya Revenue Authority (KRA) broke its deafening silence, warning that anyone found to have concealed counterfeit goods for export or import will be deregistered and lauled to court to answer criminal charges.

"Importers, exporters and clearing and forwarding agencies found culpable will have their goods condemned and forfeited to the state for destruction. The offending clearing and forwarding agent shall have their licences revoked forthwith," said a KRA notice.

The seizures also reveal blatant disregard for the Pre-Export Verification of Conformity (PVoC) that requires all Kenya-bound goods to be inspected by government-appointed private inspection agencies.

PVoC was hailed as Kenya's answer to under-declaration and misdeclaration that saw custom earnings rise as prices for genuine goods were used to determine inspection fees pegged at a percetage of the product's cost.

According to Kenya Bureau of Standards (Kebs) managing director Charles Ongwae, any container arriving at the Mombasa Port without a PVoC certificate was not to be offloaded.

Interestingly, some imported products impounded from retail outlets and distribution points had affixed the Kebs Diamond Mark of Quality stamps, confirming deeply rooted graft.

Kebs has since launched investigations into the breach of the stamps and has promised to issue a public report soon.

The multi-agency team is also trying to unveil the source of official China national police uniforms that are produced in protected factories and are distributed under restricted terms only to government security officers in China.

The Kenya Ports Authority (KPA) has also distanced itself from blame, saying all clearances for imported goods are strictly done online and warning that those providing wrong addresses on Nairobi-bound containers will face the full brunt of the law.

In its statement last week, KPA said traders were making efforts to defeat the government's agenda to utilise the 472-kilometre standard gauge railway, with 40 per cent of cargo supposed to be moved by rail.

Local traders keen on cashing in on popular locally made products also contract foreign companies to manufacture replicas for them.

A mong the replicas impounded in the past month include 148 rolls of electric cables branded as East African Cables and worth Sh600,000, 12,000 bulbs worth Sh1.8 million, 37 boxes of Toyota spare parts worth Sh500,000, toothbrushes and 7,500 GOtv-branded decoders worth Sh22.5 million as well as substandard galvanised iron sheets worth Sh6 million.

Kenya

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