Kenya importers to take local cover for cargo from February

The East African

Kenya says it will begin enforcing a law requiring all importers to secure local Insurance before cargo is cleared at the port of Mombasa beginning next month. Traders have since 2017 complained about delays in securing marine cargo insurance.

The Insurance Regulatory Authority (IRA) and Kenya Revenue Authority (KRA) have said from February 14. 2025, all importers will be required to have marine Cargo Insurance (MCI) before clearance.

In a joint announcement, the two state agencies said a digital system will be put in place to authenticate the insurance and speed up clearance.

Marine freight insurance will have to be sourced from Kenyan insurers and covers obtained from underwriters not licensed in Kenya will no longer be accepted.

‘’To ensure full compliance, the public is hereby notified that effective February 14, 2025, all importers shall be required o digitally procure Marine Cargo Insurance cover for their imports from locally licensed insurance companies, ‘’says notice dated January 7.

The directive stems from amendments of the Finance Act, 2017, and the Marine Insurance Act (CAP 390), which mandate individuals with an insurable in marine cargo to buy insurance exclusively locally.

The law prohibits importers from sourcing marine cargo insurance from foreign insurers.

Regulators say this move means importers can protect their cargo against transportation risks and compliance with regulatory standards. They said that importers who fail to comply with the directive would not receive a customs clearance certificate from KRA.

Stakeholders say the announcement provides a policy certainty for importers.

Shippers Council Of Eastern CEO Agayo Ogambi, termed the directive ‘’good news’’

‘’The beauty of this is that Shippers are now involved and guaranteed that a cover is in place, claims can be settled without delays and we can develop our insurance sector, create employment and develop our country. Previous concerns of competitiveness and capacities were adequately addressed, ‘’ he said

Mr Ogambi urged IRA and KRA to implement the directive seamlessly by creating a help desk and create adequate awareness to mitigate implementation challenges.

While securing insurance, an importer will be required to electronically submit the processed digital marine cargo certificate to KRA Integrated Customs Management System (iCMS). The IRA platform is integrated into KRA-iCMS.

In 2016, Kenya amended section 20 of the Insurance Act to give local insurers a slice of the lucrative business. But the law has not been implemented, owing to protestations from some stakeholders.

The IRA estimates that Kenya loses goods worth over Ksh10.2 billion ($78.8 million) every year while under shipment, and this policy could also address the persistent under-declaration of weight of containers.