You now risk at least 5 years or a maximum fine of Ksh10 million, or both if found guilty of infringing the new The Competition (Amendment) Act, 2019.
President Uhuru Kenyatta recently signed two bills into law; they include Competition and Insurance Bills.
The Competition (Amendment) Bill, 2019, now an Act of Parliament, was submitted to the National Assembly during the reading of the 2019/2020 budget and is intended to separate the legal provisions on abuse of buyer lower from those on abuse of dominant power.
The Competition (Amendment) Act, 2019 has the object of addressing emerging issues in the economy, including challenges of delayed payments. This problem has been highlighted in the retail sector, but is also affecting many other sectors.
The new law therefore empowers the Competition Authority of Kenya to review contracts and agreements between suppliers and buyers to determine cases of abuse of buyer power.
According to a statement from Competition Authority, the amended Act elucidates practices constituting abuse of buyer power. These include; delayed payment by a buyer without justifiable reasons in breach of contractual terms; unilateral termination of a commercial agreement without notice; transfer of costs; and a buyer’s refusal to receive or return goods without justifiable reasons and in breach of contractual terms, among others.
The Act provides that all buyers and suppliers develop and adhere to an industry code of practice. In instances where the code is breached by either party, the matter can be escalated to the Authority.
Contracts between suppliers and buyers must now contain minimum requirements, including terms of payment, payment date, interest payable, mechanism of dispute resolution, and conditions of contract termination or variation.
The Act empowers the Authority to monitor activities within sectors, and by undertakings, in regard to later payment issues and ensure compliance.
“The Act also provides that all professional association who do not seek an exemption of their rules and regulations which are contrary to the Competition Act No.12 of 2010 will have committed an offence and will be liable, if convicted, to imprisonment for a maximum of 5 years or a maximum fine of Ksh10 million, or both.” The statement reads in part.
The Act further empowers the Competition Authority of Kenya to require sectors which have a potential for abuse of buyer power to develop a binding code of practice.
The Insurance (Amendment) Act, 2019, on the other hand, introduces provisions for the protection of policy holders where an insurer is in distress and the assets are put in statutory management.
The new law empowers the Insurance Regulatory Authority to prescribe the manner of submission of various kinds of returns, and provides for a penalty for late submission, which shall be payable into the Policyholders’ Compensation Fund.
To strengthen the regulatory framework of the insurance industry particularly premium collections and payment of claims, the amended insurance law introduces requirements for insurance companies to regularly submit premium levy returns and claims payment returns to the Insurance Regulatory Authority.