1. AEO stands for Authorized Economic Operator. Different countries have different versions of this program. In the United States it's called the Customs Trade Partnership Against Terrorism (CTPAT).
WCO SAFE FRAMEWORK OF STANDARDS (SAFE)
1. 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.
2. SAFE is based on four core elements:
- Harmonization of the advance electronic cargo information
- Each country that joins SAFE commits to employing a consistent risk management approach to address security threats
- 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.
- Definition of benefits that Customs will provide to businesses that meet minimal supply chain security standards and best practices.
3. As defined by the WCO, “the 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.” Those standards relate to the following areas:
-Demonstrated compliance with customs requirements
-Satisfactory system for management of commercial records
-Financial viability
-Consultation, cooperation and communication
-Education, training and awareness
-Information exchange, access and confidentiality
-Cargo security
-Conveyance security
-Premises security
-Personnel security
-Trading partner security
-Crisis management and incident recovery
-Measurement, analysis and improvement
4. 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.
5. 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.
6. 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.
MALAYSIA - AEO SCHEME
1. The AEO Scheme developed by Royal Malaysian Customs Department (RMCD) is based on a similar concept.
2. The AEO concept encourages electronic transactions for better security management in the supply chain.
3. For smooth and seamless flow of trade, economic operators are encouraged to implement high security features based on international standards in their day-to-day management in all aspects of their business activity, amongst others includes manufacturing activities, movement of raw materials and finished goods, storage and warehousing and also ensuring secure conveyances and handling of goods.
CTPAT BENEFITS
1. CTPAT Partners enjoy a variety of benefits, including taking an active role in working closer with the U.S. Government in its war against terrorism. As they do this, Partners are able to better identify their own security vulnerabilities and take corrective actions to mitigate risks. Some of the benefits of the program include:
2. Reduced number of CBP examinations
3. Front of the line inspections
4. Possible exemption from Stratified Exams
5. Shorter wait times at the border
6. Assignment of a Supply Chain Security Specialist to the company
7. Access to the Free and Secure Trade (FAST) Lanes at the land borders
8. Access to the CTPAT web-based Portal system and a library of training materials
9. Possibility of enjoying additional benefits by being recognized as a trusted trade Partner by foreign Customs administrations that have signed Mutual Recognition with the United States
10. Eligibility for other U.S. Government pilot programs, such as the Food and Drug Administration’s Secure Supply Chain program
11. Business resumption priority following a natural disaster or terrorist attack
12. Importer eligibility to participate in the Importer Self-Assessment Program (ISA)
13. Priority consideration at CBP’s industry-focused Centers of Excellence and Expertise
Source:
http://www.customs.gov.my/en/ip/Pages/ip_aeo.aspx
https://www.shippingsolutions.com/blog/authorized-economic-operator
https://en.wikipedia.org/wiki/Authorized_economic_operator
https://www.cbp.gov/border-security/ports-entry/cargo-security/ctpat
