Car importers and dealers given 60 days to register their units

The suspension offers motorists relief after they expressed concerns over the implementation of the regulations that were to take effect from July 1.[File, Standard]

Car importers and dealers have a grace period of 60 days to register all motor vehicles in their showrooms and yards, or have them seized by the National Transport Safety Authority (NTSA).

This is after Justice Jairus Ngaah stopped NTSA from impounding all the unregistered motor vehicles, saying the agency failed to engage importers and dealers when formulating the registrations.

NTSA issued an impugned notice titled “Public Notice on Unregistered Vehicles by Motor Vehicle Dealers” that required all car dealers and importers to comply by December 16, 2024.

However, the importers' lobby - the Car Importers Association of Kenya (CIAK) - filed a petition in court objecting to NTSA's enforcement of the said notice, saying the agency did not adequately engage them on the matter.

“An order is hereby issued restraining the NTSA from impounding any motor vehicle held by a member of the Petitioner (CIAK) or from preferring any criminal charge against any such member, on the sole ground of non-compliance with the compliance deadline set out in the impugned notice, unless and until the Respondent has accorded the Petitioner and its affected members a further period of not less than sixty (60) days from the date of this judgement, together with reasonable prior notice of that period, within which to complete registration of the affected vehicles,” said Justice Ngaah.

The judge said the manner and timeline of the intended enforcement of the impugned notice did not meet the requirements of fair administrative action under Article 47 of the Constitution and section 4(3) of the Fair Administrative Action Act, 2015.

Justice Ngaah also faulted NTSA for failing to respond to the association's memorandum dated December 10, 2024.

However, the judge declined to nullify the regulation and declared it lawful under sections 6(1) and 6(1A) of the Traffic Act (Cap. 403), requiring all motor vehicles held by car importers and dealers to be registered.

In their petition, CIAK said impounding the unregistered motor vehicles and prosecuting them over the same would deprive them of property and imperil their livelihoods.

CIAK Chair Peter Otieno said for years, NTSA and the other relevant agencies permitted its members to clear imported vehicles, pay all applicable duty, and remove such vehicles from the customs areas - Kenya Ports Authority and Container Freight Stations - into their showrooms without prior registration.

Otieno said registration and issuance of logbooks and number plates would occur only upon the sale of a given unit to an eventual buyer.

“No vehicle could lawfully have exited a customs area without the sanction of all the relevant agencies, including the NTSA, and this practice was accordingly undertaken with NTSA knowledge and approval,” said Otieno.

He said the registration of vehicles before sale would prejudice their resale value irrespective of their true condition and mileage, as clients will perceive the vehicle as old.

“The commercial rationale advanced for this arrangement is that a vehicle imported and registered immediately upon clearance will, by the time it is sold, said to average some six months later, bear a number plate on a series that a prospective buyer will perceive as comparatively old, prejudicing its resale value irrespective of its true condition or mileage,” said Otieno.

Further, the chair said that franchise dealers of new motor vehicles (like DT Dobbie and CMC Motors) are permitted by the same regulatory agencies to import and hold their stock without payment of duty or registration until the point of sale.

He said NTSA’s insistence on upfront registration of used vehicles, while affording new-vehicle franchise dealers the latitude to register only at the point of sale, amounts to discriminatory treatment between the two classes of dealers.

On its part, NTSA said franchise owners of new motor vehicles import under the warehousing, re-warehousing or removal-to-another-warehouse regime provided for in section 34 of the EACCMA, whereas CIAK members import used motor vehicles under the home consumption regime provided for in section 50(1) of the EACCMA.

However, the road safety regulator failed to elaborate on how the alleged high number of unregistered second-hand vehicles posed a security risk.

NTSA said only locally assembled motor vehicles are excluded from registration before sale because imported spare parts remain in the garage and yard until fully assembled.