What are Customs Auction Sales?

A customs auction sale is the sale of goods to the highest bidder so as to dispose of goods not lawfully removed from the Customs Warehouse after a certain period.

What Law supports the existence of Public Auctions?

Section 42 of the East Africa Community Customs Management Act, 2004 authorises the Customs Warehouse keeper to sell any goods deposited in the Customs Warehouse subject to a number of procedures.

What does the entire auction process entail?

Section 42 of the EACCMA, 2004 provides that where any goods which have been deposited in a Customs warehouse are not lawfully removed within thirty days after deposit, then the Commissioner shall give notice by publication in the Gazettes of the Partner State or newspaper of wide circulation in the Partner State that unless such goods are removed within thirty days from the date of notice they shall be deemed to have been abandoned to Customs for sale by public auction and may be sold in such manner as the Commissioner may deem fit.

The gazette notice states the date when prospective bidders will view the goods and the actual date of the auction

Customs together with the other partner government agencies will verify the lotted goods to determine the reserve price and if the goods meet the required quality standards respectively. The reserve prices are approved by Commissioner Customs & Border Control. 

The Commissioner appoints an Auctioneer who will then conduct the auction process under guidelines outlined in Regulation 207 of East African Community Customs Management Regulations.

The successful bidder will pay a non-refundable deposit of 25% of the bid price at the fall of the hammer and the balance of 75% paid within 48 hours.

What types of goods does KRA auction?

Goods verified by KEBS and found to be meeting the required quality standards and cleared for release in to the local market. This covers all categories of goods imported into the country that were not cleared from the port of entry within the allowed period.

There have been cases where KRA destroys impounded goods. What does KRA look at in determining which goods are for auction and which are for destruction?

Customs will facilitate the destruction of prohibited goods at the expense of the importer. The following are the factors that inform destruction of goods by Customs:

  1. goods that fail to meet quality standards set by Kenya Bureau of Standards, Port Health, Pharmacy & Poisons Board and any other Government Agency
  2. expired goods
  3. counterfeited goods impounded and processed by the Anti-Counterfeit Agency (ACA).

What are Conditions for Sale?

Conditions for sale are guidelines applied at all Customs Auctions Sales based on legal provisions in the East Africa Community Customs Management Regulations. These conditions must be read out in either English or Swahili at the beginning of every auction and all bidders are bound by these conditions. The auctioneer sets the conditions for that day.

Can goods be withdrawn before a sale?

Yes, the owner of any goods advertised may write to the commissioner and notify him/her of the particulars of the goods he wishes to have withdrawn and satisfy the commissioner that they are the owners of the goods. This must be done in not less than seven days to the day of the sale.

Goods can also be withdrawn if they are entered (declared and taxes duly paid) before the day of the auction. Goods are deemed to belong to the owner until the day of the auction/notice period elapses.

How is the value of these goods determined?

Officers from the valuation branch are invited to assess individual values for each of the items on the list. The full customs value (Cost, Insurance, Freight (CIF) price) is usually taken as the value but if the goods have deteriorated, the value may adjust accordingly. Duty liable for the said item is also taken into consideration.

What is the reserve price?

The reserve price (duty+taxes) is to be fixed at a reasonable level taking into account the value and duty on the goods and the circumstances of sale and should reflect the lowest price of which the Valuation Officer considers the goods should be sold. For example, for goods of a C.I.F. invoice value of Shs.120/-, and liable to duty 25%, the total value and duty is Shs.155 - but taking into account the type of goods and circumstances of sale, the Valuation officer may consider that they will fetch only shs.100/- and that amount will therefore be the reserve price.

Apart from failure by importers to pay duty on their imported goods, what other factors does KRA look at before putting goods up for auction?

  1. abandoned goods not removed after 30 days of being deposited in the customs warehouse and the gazette notice period
  2. perishable goods or animals deposited in the warehouse
  3. Goods imported by
  4. Partner States Government
  5. Diplomatic Missions
  6. Aid agencies

How does KRA utilise/treat auction proceeds

Section 53 (3) of the EACCMA, 2004 provides the order in which the proceeds of sale from the auction will be applied. The order is as follows:

  1. the duties
  2. the expenses of the sale
  3. any rent and charges due to the Customs or to the warehouse keeper
  4. port charges
  5. freight and any other charges.

Where, after proceeds of the sale have been applied as above, there is any balance, then such balance shall, if the owner of the goods makes application within one year from the date of the sale, be paid to such owner, or, in any other case, be paid into the Customs revenue.


Are there individuals who cannot take part in the KRA auction exercise?

Employees and close relatives of the Kenya Revenue Authority are not eligible to take part in the auction process.

Are owners of goods identified for auction allowed to take part in the auction process?

Owners of the goods identified for auction are allowed to take part in the auction process. It is not an offence for the owner of the goods to participate in the auction process and competitively bid to purchase his/her goods.