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Combating illicit trade - Kenya Association of Manufacturers (KAM)

Since 2008, KAM has been advocating for reforms to curb illicit trade. Illicit trade exposes local manufacturers to unfair competition, but also puts the public at risk by exposing them to sub-standard or counterfeit goods whose suitability for use is not assured.

Illicit trade has continued to be a challenge particularly for the manufacturing sector in Kenya, with the infiltration of illicit goods into the market, as evidenced during the third quarter of 2018, when large consignments of sugar unfit for human consumption and sub-standard fertilizer were seized by authorities at the port of entry.

To comprehensively address illicit trade issues, the following has been implemented:

  • A presidential directive that set up the Multi-Agency Team (MAT) to strengthen interventions towards curbing illicit trade. The MAT led the seizures of illicit goods including sugar, fertiliser and rice that were either sub-standard, counterfeit or under-declared.
  • The Ministry of Industry, Trade and Cooperatives (MITC) gazetted an Inter-Agency Anti-Illicit Trade Executive Forum (IAT-TEF) and Technical Working Group (IAT-TWG) (Kenya Gazette Notice No. 7270) whose role is to lead the fight against illicit trade in the country. The KAM CEO is the Vice Chair of the IA-TEF and the Co-chair of the IA-TWG.

The inclusion of KAM on these platforms provides a policy window for KAM to continue advocating for reforms to address illicit trade. Specifically, KAM is positioned to participate in:

  1. the development of a comprehensive National Strategy to Combat Illicit Trade FY 2018/19 – 2023/24;
  2. support the MAT to develop harmonised Standard Operating Procedures (SOPs) and service charters for all enforcement agencies; and update the illicit trade manual to support the judiciary’s efforts in curbing the vice.

In 2008, KAM identified the issue of counterfeit goods as one of the biggest threats to growth in the manufacturing sector. KAM with support from the Business Advocacy Fund towards research and advocacy successfully lobbied for the enactment of the Anti-Counterfeit Act, 2008. The Act led to the formation of an Anti-Counterfeit Agency (ACA) that started operations in June 2010.

In 2014, KAM sought to aid the implementation of the Anti-Counterfeit Act as there had not been a significant reduction in the prevalence of anti-counterfeit goods in the market. As part of the implementation, KAM in collaboration with the National Council on the Administration of Justice (NCAJ) consolidated all the relevant laws on illicit trade into one reference book titled, ‘Enforcement Manual to Combat Illicit Trade in Kenya Kenya’. The manual provides background information on what illicit trade is and the various forms of illicit trade that exist, hence serving as a point of reference for law enforcement and the public, on the impact of illicit trade and best practice in tackling cases. ­

In 2015, KAM sought to continue engagement on the manual to ensure key law enforcement agencies including investigators, judicial officers and prosecutors not only have the manual but are well versed with it, to improve their effectiveness and prosecution of illicit trade cases.

In addition, KAM in collaboration with Trade Mark East Africa (TMEA) conducted a study to determine the severity of the counterfeit problem in Kenya as it affects industries and the impact of the proliferation of counterfeit products from other EAC partner states and Far East countries into the Kenyan market. The study established that manufacturers in Kenya were losing 40% of their market share to counterfeiters. This informed KAM on the need to proactively enhance her advocacy work, to reduce this menace in Kenya.

KAM’s continued advocacy has also resulted in:

  • Significant amendments of the ACA Act, 2008 through the Statute Law (Miscellaneous Amendment) Act, No. 18 of 2018. The most significant amendment is the conversion of the Anti-Counterfeit Agency to the Anti-Counterfeit Authority, effectively giving more powers to the Anti-Counterfeit Authority to implement their mandate;
  • Formation of the Multi-Agency Team under Presidential directive bringing together: The State Department of Trade (SDT), the Anti-Counterfeit Authority (ACA), Kenya Revenue Authority (KRA), Kenya Bureau of Standards (KEBS), Kenya Copyright Board (KECOBO) and the Pharmacy and Poisons Board (PPB);
  • The gazetting of the Inter-Agency Anti-Illicit Trade Executive Forum and the Technical Working Group and the appointment of the KAM CEO to both the forum and the working group.

Despite these successes, there are outstanding challenges affecting the manufacturing sector. These include:

  1. Excessive delays in clearance of goods at the port caused by the absence of a coordinated mechanism by all relevant government agencies for imported goods including service charters and Standard Operating Procedures (SOPs), with some enforcement agencies having overlapped and duplicated roles. In addition, there is a requirement for destination inspection to verify the suitability of the KEBS Pre-Shipment Verification of Conformity (PVoC) programme that has been
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