Authorized economic operator

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An authorized economic operator, or AEO, is defined as:

"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"

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 World Customs Organization (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[edit]

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 harmonised 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 unauthorised 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[edit]

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. At present, AEO or similar programmes have been introduced in:

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[edit]

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 accreditions 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 [10], had signed mutual recognition agreements with New Zealand, Canada [11] and Jordan. Several other countries and trade blocks are starting their negotiations about it, e.g. the US and the European Union [12]

See also[edit]

External links[edit]