1. DEFINITION AND PURPOSE

A bonded warehouse is a place (normally, though not always, a building) licensed by the Commissioner General for the deposit and storage of dutiable goods. The purpose is to allow goods to be stored under official supervision before the payment of duty and that duty should become payable only when the goods are taken out of the warehouse for consumption or use in Malawi.

2. APPROVAL AND LICENSING

The approval and licensing of bonded warehouses is at the discretion of the Commissioner General after application by the owner. In considering an application for approval of a bonded warehouse, the Commissioner General is obliged by law to have particular regard to:

1. the financial standing of the applicant;
2. the amount of revenue involved in the goods proposed to be warehoused;
3. the situation of the proposed warehouse;
4. the security arrangements at the proposed warehouse; and the bonded warehouse facilities already available to the public in the area.

Unless he is fully satisfied on all these counts, the Commissioner General will refuse to approve and license the place as a bonded warehouse.

3. TYPES OF BONDED WAREHOUSES.

Bonded warehouses are approved and licensed as either:

1. general bonded warehouses for the deposit of dutiable goods generally (i.e. those belonging to any person); or

2. private bonded warehouses for the deposit of dutiable goods belonging to the licensee only.

4. SIZE AND STRUCTURAL SECURITY.

The Commissioner General will not normally be willing to license a place as a private bonded warehouse where the superficial area is less than 186 square meters or 465 square meters for a general bonded warehouse. Any applicant for a license for an area of less than these stated above must show special reasons why a larger area should not be provided.

The type of structure and the degree of security required depend on the nature of the goods concerned and the amount of revenue involved. For motor cars and similar bulky items it is sufficient for the warehouse to be an open space surrounded by a stout chain-link or similar fence on deep-set standing supports and with a similar stout lockable gate, but for packaged goods a building is required, normally of brick or concrete with a sound roof and ceiling. Each window must be secured with vertical iron bars or rods embedded top and bottom in concrete and spaced not more than 1 5cm apart.

The doors must be of sound construction, not capable of being lifted off their hinges and provided with a stout and secure lock. If it is proposed that padlocks be used, the fastenings must not be capable of being screwed off or otherwise easily removed when the padlock is in use. Whether the warehouse is an open space or a building, the gate or door must be provided with fastenings for a customs padlock to be used should it ever be considered necessary.

Prospective applicants for the approval of places as bonded warehouses are advised to consult the local Officer-in-Charge, Customs and Excise, before having buildings constructed or having alterations made to existing buildings.

Once the Commissioner General has approved the warehouse, no structural alterations may be made to it without his prior approval.

5. APPLICATION FOR APPROVAL.

Persons wishing to seek approval for any place to be licensed as a bonded warehouse should ask the local Officer-in-Charge for forms C.56, complete them and return them to the office of issue. The building or place will be inspected by the officer who will forward the application to the Commissioner General.

6. APPROVAL BY COMMISSIONER GENERAL

If the commissioner General approves the issue of a bonded warehouse license he will so indicate on the copy of the form C.56 that will be returned to the applicant. He will state which types of goods may be stored in the warehouse and any other particular conditions, which the licensee must observe. No other types of goods may be stored, nor may there be any deviation from the conditions, except with the prior approval of the Commissioner General.

7. BOND.

When approval for the issue of the license has been given the applicant must enter into a bond on form 123 for the due observance of the customs laws relating to bonded warehouses. The penalty of the bond must be the maximum amount of duty on goods that is anticipated at any one time in the warehouse. The amount should be agreed with the officer before the bond form is completed. The surety to the bond must be a bank or insurance company established in Malawi. The original and one copy of the bond will be required for retention by the MRA if the principal and/or surety to the bond wish to have copies for their own purposes they should be submitted for numbering, stamping and return.

8. LICENSE FEE

The annual license fee for a bonded warehouse is K2000 and is payable on or before the 1st January each year. If the initial license is issued after the 30th June a reduced fee of K1 000 is payable for that year. The initial license fee should be sent to the officer at the same time as the bond.

LICENSEES ARE REMINDED THAT IF THE ANNUAL FEE OF K2000 IS NOT PAID ON OR BEFORE 1ST JANUARY EACH YEAR THE BUILDING WILL CEASE TO BE A LICENSED BONDED WAREHOUSE AND THE MRA MAY INSIST UPON DUTY PAYMENT FORTHWITH ON ALL THE GOODS STORED THEREIN.

9. COMMISSIONER GENERAL'S POWER TO REVOKE OR TO REFUSE TO RENEW A LICENSE.

The Commissioner General has power to revoke or to refuse to renew any bonded warehouse license. If he declines to do either of these things he will so inform the licensee who then must enter and remove all the goods from the bonded warehouse (see paragraphs 37 to 45) within such time as the Commissioner General directs. If the licensee refuses or fails to remove the goods within that time, either he or the surety to the bond will be called upon to pay the duty and in addition the goods may be removed to the Customs Warehouse.

10. LICENSEE NOT WISHING TO RENEW LICENSE

If any licensee wishes not to renew, or to surrender, his license, he must give the Commissioner General not less than 30 days' notice of his intention and must enter and remove the goods from the warehouse within such time as the Commissioner General directs. If he fails to enter and remove the goods within that time either he or the surety to the bond will be called upon to pay the duty and in addition the goods may be removed to the Customs Warehouse.

11. TRANSFER OF LICENSES.

A bonded warehouse license may, on application to the Commissioner General on form C.56 in triplicate, be transferred from one set of premises to another in the possession of the licensee but the license may not be transferred from one person, company or firm to another. Where there is a change of ownership, a fresh application, a bond, a license fee and a license are necessary. The expression "change of ownership" includes:

1. complete change of ownership from one person or firm to another;

2. a change in the constitution of a partnership;

3. the conversion of an unlimited company into a limited company;

4. a change of ownership from one limited company in a group of companies to another in the same group.

12. LICENSE TO BE DISPLAYED.

The current license must be prominently displayed in the bonded warehouse to which it relates.

13. OFFICER'S RIGHT OF ACCESS.

A customs officer has, in the course of his duty, the right of access to any bonded warehouse at all reasonable times and licensees are obliged, in terms of the customs laws, to allow such access and to give the officer such assistance as he requires to examine and take account of goods.

14. CUSTOMS LOCKS ON BONDED WAREHOUSES.

It is not the normal practice for bonded warehouses to be secured with a customs lock and it is not normally a requirement that an officer be present when the licensee or any other person authorized by him wishes to open and enter the warehouse. Neither is it normally necessary for an officer to be present when goods are being removed into or out of the warehouse. Where, however, the officer in his discretion has secured the warehouse with a customs lock, no person may enter it except with the consent and in the presence of the officer. Further, if the officer informs the owner or licensee that he wishes to examine any goods at the time of their removal into or out of the warehouse, the goods must be held until the officer has attended and given his permission for the removal to proceed.

15. RESPONSIBILITIES OF THE LICENSEE.

The licensee is responsible for the safe care and custody of all the goods in his bonded warehouse and under the terms of his bond must pay on demand the duty on all goods entered for warehousing in his warehouse but not duly accounted for to the satisfaction of the Commissioner General.

16. GENERAL PROHIBITIONS RELATING TO BONDED WAREHOUSES.

The following general prohibitions relate to all bonded warehouses:

1. inflammable or dangerous goods or goods likely to cause damage to other goods shall not be warehoused unless segregated from other goods to the satisfaction of the proper officer;
2. naked lights shall not be allowed in a bonded warehouse except in emergency or with the permission of the officer;
3. no public sales may be held in a bonded warehouse except with the authority and in the presence of an officer. This authority will seldom be given.
4. stationery
5. spare parts fabrics/Textiles
6. foodstuffs
7. toiletries
8. cosmetics
9. goods that attract duty rate of 10% or less.

17. PROVISION OF FACILITIES.

The licensee must provide such facilities for the examination and taking account of goods as the officer may require. He must also supply at his own cost such office, sanitary and lavatory accommodation as the Commissioner General may reasonably require for the officer, The precise accommodation which any particular licensee will be required to provide will be communicated to him by the Officer-in-Charge.

18. ENTRY FOR WAREHOUSING.

All goods for warehousing must be entered on form no. 12 whether they are from direct import, from excise warehouse or on removal from another bonded warehouse. It is essential for official purposes that the type of Customs Procedure Code must be made quite clear and persons preparing forms no.12 must therefore make sure that it is eligible and correct. For official purposes, the licensee must keep at the warehouse copies of all entries and must produce them to the officer when required.

19. PART CASES AND PART CONSIGNMENTS.

Part cases may not be entered for warehousing. If a package arrives with part contents missing, it should be entered for consumption. In the case of imported goods no more than the number of packages shown on the carrier's advice note may be entered to any one warehousing entry. If further packages from the same consignment arrive subsequently, they may, if the importer so wishes, be entered separately for warehousing.

20. PACKAGES DAMAGED BEFORE DEPOSIT IN WAREHOUSE.

If any packages are found to be in a damaged condition they must be repaired and made good before or immediately after being deposited in the bonded warehouse.

21. DEPOSIT IN WAREHOUSE.

No goods may be deposited in a bonded warehouse before being entered for that purpose and no goods may be deposited except in the warehouse for which entered. Upon being entered for warehousing, goods must be deposited in the warehouse for which entered without delay.

22. RECEIPT ON FORM NO. 26.

Immediately upon deposit of goods in the bonded warehouse, the licensee must submit to the officer a properly completed form 26 acknowledging receipt of the goods into the warehouse. In respect of goods removed from an excise warehouse or from another bonded warehouse, the form 26 must be submitted in duplicate. No goods may be delivered from the warehouse until the form 26 has been submitted.

23. STACKING OF PACKAGED GOODS.

Each consignment of goods must be stacked separately and with sufficient space between the stacks to allow an officer to examine the packages when he desires to do so. All distinguishing marks and numbers must be on the outside so that they may be seen.

24. STOCK CARDS.

A stock card must be attached to each consignment of goods showing the number and date of the customs declarations by which they were warehoused, the number of items and the quantity and value. Deliveries must also be recorded as they occur and a running balance maintained.

25. MARKING OF GOODS.

Each consignment of goods in bonded warehouse must be marked with the date of warehousing and, in the case of goods in general warehouse, with the name of the owner. In respect of cased goods, it is not necessary for every case to be so marked; the marking of 1 case in every 10 will normally suffice.

26. PRODUCTION OF WAREHOUSED GOODS TO THE OFFICER.

All goods in a bonded warehouse must be produced on demand for inspection by the officer. If any goods, which should be in the warehouse, cannot be produced, duty must be paid on them forthwith. Any excess goods found in the warehouse must, unless their presence is explained to the satisfaction of the officer, be at once entered either for warehousing or for removal from the warehouse, unless they are prohibited goods in which case they must be removed to the MRA warehouse.

27. ACCIDENTS IN BONDED WAREHOUSE.

If any package or goods become accidentally damaged or are accidentally lost or destroyed while in bonded warehouse the attention of the officer must be drawn thereto as soon as possible. The extent of the damage, loss or destruction must be ascertained and any broken packages made sound.

There is provision for the Commissioner General to allow a remission of the whole or part of the duty on such goods provided he is satisfied that none of them have gone into consumption or use in Malawi and that the owner or licensee made every reasonable effort and took every reasonable precaution to prevent the occurrence. Any request for such a remission should be made to the officer on form 43 in triplicate, accompanied by a full written explanation of the reason for the request.

It is pointed out that the word "lost" in this context and in the context of paragraph 29 covers such occurrences as liquids accidentally leaking from casks or drums, bottles being broken with consequent loss of the contents, etc. It does not cover loss by theft, unexplained disappearance, etc duty will always be demanded on this type of loss.

28. ACCIDENTS IN TRANSIT.

If any goods entered for warehousing or for re-warehousing (i.e. removal from one bonded warehouse to another) or for exportation are accidentally lost or destroyed while in transit to or from the bonded warehouse, the attention of the nearest officer must be drawn to the occurrence as soon as possible and all assistance must be given to him to take an account of any goods remaining. There is provision here also for the Commissioner General to allow a remission of duty, subject to the same conditions as set out in paragraph 28.

29. DESTRUCTION OR ABANDONMENT OF WAREHOUSED GOODS.

If an owner or licensee wishes to destroy goods in bonded warehouse or to abandon them to the MRA without payment of duty, he should complete form no. 43 in triplicate and send it, together with a letter explaining the reason for the request, to the officer. The Commissioner General may refuse the request or may grant it in whole or in part or subject to conditions.

30. CHANGE OF OWNERSHIP OF WAREHOUSED GOODS

If the ownership of goods in bonded warehouse changes the licensee must at once so inform the officer in writing. In the case of a private warehouse the goods must be entered for removal there from forthwith. In the case of a general warehouse the new owner's name must be substituted for the old one on the goods themselves (see paragraph 26), the goods must be separately stacked and a new stock card prepared and attached.

31. TIME LIMIT FOR WAREHOUSING.

No goods may remain in a bonded warehouse for more than 6 months from the date of the entry for warehousing. If not lawfully entered and removed, from the warehouse by the end of 6 months they will be taken to the MRA warehouse.

32. SAMPLING OF WAREHOUSED GOODS.

Any request for the taking of such a sample should be made to the officer in writing and the taking of the sample must be recorded on the stock card required to be kept in accordance with paragraph 25. Other samples of warehoused goods may be taken, at the discretion of the officer, upon written request and the giving of security for their return to the warehouse within 3 months of the payment of duty.

33. OPERATIONS ON WAREHOUSED GOODS.

No warehoused goods may be in any way manipulated, nor may packages be opened except with the permission of the officer unless in cases of emergency when the attention of the officer must be drawn to the occurrence as soon as possible. Requests for permission to operate on goods in warehouse must be made to the officer on form no. 51. Although this form refers specifically to "Wet Goods" (i.e. wines and spirits), it is to be used, suitably adapted, for operations on other goods also. The form calls for an account of the goods both prior to and after the operation. These particulars must be inserted by the owner or licensee and will be checked by the officer. Normally all operations on goods in bonded warehouse must be performed in the presence of the officer.

34. DEPOSIT OF FREE GOODS IN BONDED WAREHOUSE

As a normal rule, duty free goods may not be deposited or stored in a bonded warehouse but if an owner or licensee can show good trade reasons for taking such goods into bond, the Commissioner General is willing to consider applications. Such reasons might include the packing or repackaging of duty free goods, with bonded goods, for exportation. Any such application must give precise details of the operations proposed, their frequency and the anticipated amount of revenue involved. If the Commissioner General grants the request, the owner or licensee must observe such special conditions as the Commissioner General may lay down in relation to it.

35. ALLOWABLE DEFICIENCIES.

Since wines and spirits stored in bonded warehouse in wooden casks are subject to natural wastage through evaporation, absorption, etc., certain allowances may be made to account for such wastage. The allowances are conditional upon the officer being satisfied in every instance that the deficiency is due to natural causes and is not due to illegal abstraction of the product. If he wishes these allowances to be made, the owner or licensee must submit a request for re-gauging on form 51 before entering the cask for delivery from the warehouse. Similar allowances may be made for wines or spirits lost in such operations as bottling, blending, mixing, etc. Forms 51 will be supplied by the officer.

36. REMOVAL FROM WAREHOUSE.

Except with the permission of the officer, no goods may be removed from the warehouse until properly entered for that purpose. They may be entered either for consumption in Malawi, for exportation or for re-warehousing in another bonded warehouse in Malawi. When the goods have been so entered, they must be removed from the warehouse within 14 days. The return to the owner or licensee of a customs-stamped copy of the bill of entry will constitute authority for the removal.

37. ENTRY FOR CONSUMPTION IN MALAWI

The following CPCs are to be used for the entries for consumption of goods in bonded warehouse:

1. If the goods are liable to customs duty or are free of duty under any special transaction or are free of duty under any other legislation e.g. the Finance and Audit Act, the diplomatic privileges legislation, etc the following CPCs are to be used: CPC 470, CPC 472 CPC 473, CPC 474, CPC 475, CPC 476, CPC 477, CPC 478, CPC 479

2. If goods are liable to excise duty CPC 470 must be used.

3. If goods are being entered under industrial rebate CPC 471 must be used.

Only two copies of the form 12 are required for entry of goods, however, if the owner or agent requires more copies of form 12 for his own purposes permission should be sought from Officer In-charge who can make more copies if the station is computerized or they should be submitted at the same time and will be returned duly stamped and numbered. Since form12 is multi-purpose, it is essential that all inapplicable boxes should not be filled.

38. RATE OF DUTY ON WAREHOUSED GOODS.

The rate of duty applicable to warehoused goods is the rate in force when the bill of entry for consumption is presented to the officer. This may or may not be the rate that was in force at the time the goods were first deposited in the warehouse.

39. VALUE FOR DUTY OF WAREHOUSED GOODS.

The value for duty of warehoused goods is that accepted at the time the goods are deposited in the warehouse. It does not vary with the time in warehouse.

40. ENTRY FOR EXPORTATION OR FOR STORES.

Entry of warehoused goods for exportation or for loading as aircraft or ship's stores must be made by the submission of duly completed form 12 using CPC 910. In the case of stores, the word "Stores" should be inserted in box 32.

41. PROOF OF EXPORT.

Owners and licensees should provide to Customs proof of exportation required for goods exported from bonded warehouse.

42. TIME LIMIT FOR EXPORTATION

If goods entered for exportation are not exported within 30 days of the date of the entry, they must be delivered into the custody of an officer and the entry cancelled by the presentation of duly completed forms 12. They may then be re-entered for exportation or may be returned to the warehouse. If this procedure is not adopted, duty will be called for in terms of the warehouse bond.

43. ENTRY FOR WAREHOUSING.

Entry for the re-warehousing goods (i.e. the removal of goods from one bonded warehouse to another) must be made by the submission to the officer of duly completed form 12 using CPC 710.

44. ADDITIONAL PARTICULARS ON EX-WAREHOUSE ENTRIES.

Persons entering goods on forms 12 for removal from bonded warehouse must indicate in box 33 of the form the preceding Registration Number for each consignment allocated in accordance with paragraph 21 of this Notice and the balance, which will be remaining after delivery of the packages to be entered in box E under the description of goods.

45. CORRECTION OF DECLARATIONS.

If any errors are found before a declaration is passed and numbered by the customs, the declaration will be queried for correction, but if any of the particulars are found to be incorrect, either by the customs or by the trader concerned, after the declarations have been passed and registered, a Post Entry must be submitted.

46. COMMISSIONER GENERAL'S POWER TO VARY CONDITIONS.

The Commissioner General has power to vary the conditions in regard to particular types of warehouses or particular types of goods. If any applicant or licensee considers that the general conditions should be varied in respect of his particular type of trade he should make written application to the Commissioner General through the local Officer-in-Charge, setting out in detail the reasons for his application.