The Preamble of the Export Processing Zones Act,1990 states that it is an Act of Parliament to provide for the establishment of export processing zones and the Export Processing Zones Authority; to provide for the promotion and facilitation of export oriented investments and the development of enabling environment for such investments and for connected purposes.
The Act may be cited as the Export Processing Zones Act, 1990 (s.1)
‘Custom control’ - refers to measures that ensure compliance with laws and regulations enforced by customs officers.
‘Duty’-refers to the fiscal, customs and exercise duty for the time being chargeable under any written law. (s.2)
Establishment and membership of the Export Processing Zones Authority
The Act establishes an Authority known as Export Processing Zones Authority(S.3 (1))
The Authority shall have the rights of a corporate body in managing its affairs (S.3 (2))
Members of the Authority shall consist of:
A chairman, a representative of Kenya Manufacturers and Kenya National Chamber of Commerce and Industry; four members appointed from Private Sector; Permanent Secretary to Treasury; Permanent Secretary to Ministry responsible for Industry; Governor of Central Bank; Commissioner of customs and Exercise, Commissioner of Lands, Managing Director of the Investment Promotion Centre and Chief Executive of the Authority (S.3 (3))
Members of the authority arepaid from the General fund of the Authority. (S.3 (6))
Meetings and procedures of the Authority
The chairman is responsible for convening meetings at least once a month (S.4(1))
The quorum of any meeting shall be half its members, and in case the chairman is absent for any other reason, the president may appoint another member temporarily to perform such functions. (S.4 (2)(3))
The Chairman is allowed to resign by writing a resignation to the President (S.4 (4)).
Any member who has a conflict of interest in any decision shall disclose when such a decision is being taken. (S.4(5))
Appointment of Chief Executive of the Authority
The Ministeris responsible for appointment of Chief Executive of the Authority S.6(1)
The Chief Executive of the Authority is responsible for the general direction of the affairs of the Authority. (S.6 (2))
The Minister may remove Chief Executive Officer from office on recommendation (S.6 (3))
Appointment and remuneration of staff
The Authority may appoint other officers and servants for the efficient discharge of responsibilities and functions(S.7(1))
Protection from legal action
Neither the Authority, any of its members, officers nor servants is liable for anything done in good faith while acting or in exercise of any powers under the Act (S.8(1))
Objectives of the Authority
Principal objectives of the Authority include(S.9);
The Authority in carrying out its objectives it may;
Power of the Authority to make rules
In addition to the general powers under theAct, the Authority has powers to ensure orderly and fair development and operation of EPZ/Enterprises specifically to (S .10):
The decision on approvals shall be rendered within 30 days as under the Act (S.10 (2))
Authority shall have a general fund necessary for all monies paid as fees and any monies received by the Authority.
Expenses shall be paid out theFund (S .10(3))
The budget of the Authority shall be approved by the treasury(S .10(4)).
Accounts, etc., of the Authority
The authority shall ensure proper books of accounts are kept (S.12).
Disclosure of information
The Act prohibits disclosure of information under S.12 (2) except permitted by a court of law(S.13 (1)).
A violation of this section is an offence liable to a fine of not more than two hundred thousand or three years imprisonment or both (S.13 (2)).
The Authority may appoint committees to help carry out its general/specific functions (S.14)
Declaration of export processing zone
The Minister on recommendation of the Authority and in consultation with the Minister for Finance may declare any area of Kenya to be an EPZ (s.15).
Facilities, etc., within an export processing zone
The Authority may require a developer to provide and maintain an EPZ such facilities necessary to separate the EPZ from Customs territory(S.16 (1)).
The Authority shall grant permission before one resides in EPZ (S.16 (2)).
The Authority may order removal of any goods from EPZ it considers dangerous to public interest, health or safety (S.16 (3)).
A violation of this section is an offence that attracts a penalty of not more than two hundred thousand shillings or imprisonment of not more than 3 years or both (S.16 (4)).
Activities permitted within an EPZ
Activities permitted to be carried out within an EPZ include manufacturing activities, commercial or service activities(S.17 (1)).
The Minister may increase the activities permitted within an EPZ (S.17 (2)).
Power of Minister to make Rules
The Minister may make Rules for the proper administration of EPZ (S.18).
The Authority has power to issue licences before any person is allowed to operate in EPZ (S.19 (1)).
On receiving an application for a license, the Authority may issuelicence to the personand alsoissue a notice of the same to the KRA indicating every EPZ enterprise’s list of activities and conditions of the licence granted. (S.19 (2)(3))
Register of Licences
The Authority shall keep a register of all licence holders issued (s.20).
Qualifications of export processing zone developers and operators
An EPZ developer/operator shall (S.21):
Each EPZ developer shall be licenced (S.21 (2)).
Powers of export processing zone developers and operators
An EPZ developer has power to:
The EPZ developer shall:
Establishment of EPZ enterprises
The Authority shall licence any enterprise before it is established and shall enjoy benefits under Part VIII of the Act (s.23 (1)).
The licence shall be granted by the Authority if the proposed business enterprise (s.23(2)):
Goods deemed to be exported and imported into Kenya (S. 24)
Goods/services are presumed exported from Kenya if brought into an EPZ from any part of Customs territory.
Goods/services are presumed imported into Kenya if out of EPZ into any part of customs territory.
Goods within an export processing zone
Subject to s.17, Goods within an EPZ shall not be removed unless they are for; export into Customs territory with approval, or for repair and maintenance or processing conversion (s.25 (1))
Services provided by EPZ shall be provided to; persons outside Kenya, other EPZ enterprises and persons in the Customs territory (s.25 (2))
Prohibited activities within the export processing zone (S.26)
Removal of goods from an export processing zone
Subject to the Act, goods may be removed from an EPZ under the supervision of a customs officer for export sent to another EPZ or bonded factory (s.27 (1)).
Subject to the Act, goods may be brought into EPZ if they are directly used for manufacture of other goods by a licensed enterprise (s.27 (2)).
A contravention of this provision is an offence and it attracts a penalty of not more than two hundred thousand shillings or imprisonment of not more than 3 years or both; or forfeiture of goods (s.27 (1)).
Benefits accruing to EPZ enterprises
The EPZ enterprises, developers’ operators shall benefit from exemption from all existing and future taxes/duties payable under customs and Exercise Act, VAT act on specific items listed under this section (S.29(1)).
Without bias to subsection (1), other exemptions granted include exemptions from(S.29(1));
Customs officer shall offer on-site inspection to the EPZ for both imports and exports (S.30).
Application of the East African Community Customs Management Act
The East African Community Customs Management Act shall have application with such exceptions and adaptations and shall apply to any goods even those exempted in this Act(s.44).
Regulations (Section 45)
The Cabinet Secretary may make Regulations under this Act (s.45).
Repeals and Transitional Provisions (Section 46)
This Act Repeals Customs and Excise Act.
Subscribe to our mailing list to get updates to your email inbox