The new recommendations were issued this week as over 1,000 Customs and business representatives from all over the world convened in Cancun, Mexico to discuss the concept of AEOs at the World Customs Organization’s 3rd Global AEO Conference.
AEO programmes allow traders to work closely with their Customs administration, in exchange for reduced inspections on goods and quicker clearance times at borders. In turn, Customs agencies can increase their administrative efficiency by focusing inspections on unknown high-risk cargo.
At present, there are over 60 AEO programmes in operation around the world and the number is rapidly increasing. However, despite this increase the benefits of AEO programmes are not always evident and the application processes can be burdensome – especially for small- and medium-sized enterprises (SME).
AEO programmes should be based on the WCO SAFE Framework and AEO status should generate clear additional trade facilitation benefits for business.
Speaking at the WCO conference, Norman Schenk, Chair of the ICC Customs and Trade Facilitation Commission and Vice-President of UPS said “AEO programmes can be highly beneficial for both Customs and traders but we have to prevent international traders being confronted with different AEO programmes in each country. Harmonization and regional coherence are vital”.
Fernando Barbosa, Vice-Chair of the ICC Customs and Trade Facilitation Commission added: “Companies need consistency. AEO programmes should be based on the WCO SAFE Framework and AEO status should generate clear additional trade facilitation benefits for business. It should be recognized by all border agencies – not just Customs.”
To maximize trade facilitation and supply chain security, ICC calls upon governments to avoid divergence to enhance uniformity and predictability and to increase opportunities for effective mutual recognition agreements.
To promote global harmonization and secure maximum benefits ICC has set out eight recommendations for successful AEO programmes encouraging policymakers as follows:
1. Offer clear benefits
Ensure quicker release of goods, self-assessment and relief from bond requirements.
2. Follow WCO SAFE Framework
Don’t diminish trade facilitation for non-AEO traders and SMEs
3.Design with business
Customs-business cooperation is key – utilize Chamber of Commerce networks.
4.Complement existing programmes
Make AEO status compatible with other domestic trade compliance schemes.
5. Recognize status beyond Customs
AEO status should have effect with all border agencies.
6. Ensure Customs capacity
Ensure capacity to implement effectively – including training.
7. Facilitate foreign recognition
Expand mutual recognition between countries for regional coherence.
8. Open up AEO status to all
Include all supply chain operators, not just importers and exporters.
World Customs Organization Secretary General Kunio Mikuriya welcomed ICC’s recommendations. “The WCO values hearing the views of experts on AEO programmes from both the public and private sector. ICC’s recommendations released this week at the WCO’s AEO Global Conference in Mexico contain a view from business worthy of discussion,” he said.
Learn more about the work of the ICC Commission on Customs and Trade Facilitation here.
Click here for the ICC recommendations on Authorized Economic Operators.