Authorized economic operator

According to the World Customs Organization (WCO), an authorized economic operator (AEO) is

"a party involved in the international movement of goods in whatever function that has been approved by or on behalf of a national Customs administration as complying with WCO or equivalent supply chain security standards. Authorized Economic Operators include inter alia manufacturers, importers, exporters, brokers, carriers, consolidators, intermediaries, ports, airports, terminal operators, integrated operators, warehouses and distributors"

Not to be confused with Economic operator.

The growth of global trade and increasing security threats to the international movement of goods have forced customs administrations to shift their focus more and more to securing the international trade flow and away from the traditional task of collecting customs duties. Recognizing these developments, the WCO, drafted the WCO Framework of Standards to Secure and Facilitate global trade (SAFE). In the framework, several standards are included that can assist Customs administrations in meeting these new challenges. Developing an Authorized Economic Operator programme is a core part of SAFE.

The WCO framework of standards to secure and facilitate global trade

The AEO concept is one of the main building blocks within the WCO SAFE Framework of Standards (SAFE). The latter is part of the future international Customs model set out to support secure trade. SAFE sets out a range of standards to guide international Customs Administrations towards a harmonized approach based on Customs to Customs cooperation and Customs to Business partnership.

SAFE is based on four core elements:

  1. harmonization of the advance electronic cargo information
  2. each country that joins SAFE commits to employing a consistent risk management approach to address security threats
  3. on request of the Customs administration of the receiving nation, the customs administration of the sending nation will perform an outbound inspection of high-risk containers and cargo.
  4. definition of benefits that Customs will provide to businesses that meet minimal supply chain security standards and best practices.

The essence of the AEO-concept can be found in the Customs-to-Business partnerships. Operators can be accredited by Customs as AEOs when they prove to have high quality internal processes that will prevent goods in international transport to be tampered with. I.e.:

  • Ensure the integrity of the information, i.e. what is said to be in a container, really is in the container and nothing else, more, or less;
  • Ensure the integrity of its employees, that they will not put goods in the container that should not be there; and
  • Secure access to its premises, to prevent unauthorized persons to put goods in the container.

As a result, customs will trust the operator and perform less or no inspections on goods imported or exported by or via the AEO. This benefits the mover of the goods as goods are available more quickly, which means lower transport costs. Customs benefits as scarce inspection capacity can be targeted better at cargo of unknown and potentially unsafe operators.

Different AEO programmes

Most members of WCO have acceded to the SAFE framework and it can be expected that in the next few years, the majority of customs administrations will introduce AEO-programmes. According to the 2014 edition of the Compendium of Authorized Economic Operator Programmes,[1] published by the World Customs Organization, the following countries had either fully operational or pilot AEO programmes at that time:

At the end of 2014, Brazil has also launched its AEO Programme by the name of “Operador Econômico Autorizado” (OEA)[2] which will be implemented in three phases: OEA-Segurança - export type with focus on security, launched in December 2014 (certification based on compliance with a range of safety requirements), OEA-Conformidade - import type expected to be launched by December 2015 (certification will be based on compliance with customs regulations and procedures through the expansion and revision of the Blue Line Programme) and OEA-Integrado in which other public entities such as the Brazilian Health Agency (ANVISA) and the International Agricultural Surveillance System (VIGIAGRO) will be integrated into the AEO programme with the goal of further streamlining and integrating international trade controls - expected to be launched by December 2016.

On 1 July 2016, Australia launched its AEO program – Australian Trusted Trader (ATT). ATT accredits eligible entities supply chain security and trade compliance standards. ATT is open to all importers, exporters and service providers, via both air and sea cargo.

Although all these programmes find their roots in the SAFE framework of standards, the approaches differ, e.g. the USA only allows importers to participate in C-TPAT, whereas the European AEO programme is open to all operators in the supply chain. The European AEO programme differs from the other programmes as that it has a wider scope, as it encompasses customs simplified procedures next to security and with that relates to compliance with all customs legislation, including customs duties.

Mutual recognition

The importance of coordinated, similar, programmes lies in the fact that the ultimate goal is to get all national programmes mutually recognized, meaning that AEO accreditations have the same value everywhere. As a result, secure supply chains can be established, as all parts of the chain from origin (place of stuffing of the container) to destination (place of unpacking of the container) are deemed to be safe, albeit under different AEO programmes. This would greatly facilitate global trade. By July 2008 the United States , had signed mutual recognition agreements with New Zealand, Canada and Jordan. Several other countries and trade blocks are starting their negotiations about it, e.g. the US and the European Union

Recently, The EU and China have decided to facilitate trade between their economic operators by mutually recognising their respective programmes for Authorised Economic Operators (AEO).

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See also

References
  1. "Compendium of Authorized Economic Operator Programmes"
  2. Programa Brasileiro de OEA Archived March 12, 2016, at the Wayback Machine
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