A High Court in Kenya has declined to issue orders suspending the implementation of a directive to charge a $350 levy per unit (container) to all goods destined to South Sudan.
Clearing agents in Kenya were challenging the levy and sought for the conservatory orders to be issued pending hearing and determination of their petition.
Justice Olga Sewe, sitting in Mombasa, ruled that the clearing agents under the umbrella of Kenya International Freight and Warehousing Association (Kifwa) had not made a prima facie case, granted the doctrine of sovereign immunity.
The clearing agents have sued Mombasa Monitoring Station of the National Revenue Authority of South Sudan.
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“Until it is proved otherwise, there would be no basis for restraining the respondent from implementing the directive,” ruled Justice Sewe while dismissing the application by Kifwa.
“The respondent has explained that $350 is payable only by its nationals, thus it has the right to determine the modalities of payment.”
Cargo through the port of Mombasa destined for South Sudan has been increasing in the past four years, growing threefold from 769,886 metric tonnes in 2019 to 1.92 million metric tonnes in 2023, according to Kenya Ports Authority 2023 Annual Review and Bulletin of Statistics.
The Mombasa Monitoring Station of the National Revenue Authority of South Sudan had told the court that the money is payable by the consignees who are citizens of South Sudan.
According to the respondent, the decision by Juba to impose charges on its citizens can only be challenged in that country.
But Juba says the Electronic Cargo Tracking Note certificate is a mandatory document to be obtained by importers/ consignees and exporters of cargo into and from South Sudan.
Kifwa wants a declaration that the levy per unit to all imports headed to South Sudan is unconstitutional. says the Mombasa Monitoring Station issued a directive that they should pay the money to a private firm in Uganda- Invesco Uganda Limited, for a tracking system christened mandatory Electronic Cargo Tracking Note (ECTN).
In its petition, Kifwa says they are licensed by the Commissioner of Customs Kenya to undertake cargo clearance and collection of taxes and levies due to the government.
“As clearing agents, we operate under Kenyan laws and the East Africa Community Customs Management Act and the regulations made thereunder,” part of the petition states.
It also seeks an order issued to quash the directive and also prohibit the Mombasa Monitoring Station-National Revenue Authority of South Sudan from enforcing the directive.
According to Kifwa, there exists a cargo monitoring tracking system monitored by customs department in Kenya-Regional Electronic Cargo Tracking System-which is efficient, mandatory and free within East Africa.
They argue that the South Sudan ECTN is inconsequential in terms of cargo tracking except colleting the money and directing the funds to a private account in Uganda.
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“The directive to collect the revenue through ECTN is being implemented in the country at the port, inland container depots, Container Freight Stations (CFS), Malaba and Busia boarder points,” the petition states in part.
Kifwa says that Kenyan clearing agents are being forced to implement and collect the pre-requisite ECTN service charge.
It argues that using Kenyan agents to process and collect ECTN service charge or any other taxes within Kenyan custom area is going against the law and not within their mandate.
Kifwa says that the directive has highly compromised clearing agents’ fundamental rights to earn a living, is prejudicial and contravenes the constitution on economic empowerment of truck owners.
“The levy being imposed by the respondent is ultra vires to the law since it has no constitutional basis and has no approval of parliament as required by law,” Kifwa argues in its petition.
It says that pursuant to the directive no trucks are leaving the port, ICD, CFS and border posts since Mombasa Monitoring Station-National Revenue Authority of South Sudan is not releasing any trucks headed to South Sudan before payment of the levy.
The petitioner further says that cargo destined to South Sudan is cleared under Kenya Revenue Authority customs systems under transit entry covered by the regional customs transit guarantee security bond.
Kifwa is also seeking a declaration that the directive issued by the respondent is unconstitutional and contravenes the petitioner’s right to fair administrative justice as enshrined in the constitution.
It also wants a declaration that the directive by the respondent is unconstitutional as it contravenes the petitioners right to economic empowerment as enshrined in the constitution.
