AUTHORIZED ECONOMIC OPERATORS

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AUTHORIZED ECONOMIC OPERATORS

• The Trade Community and the WCO SAFE Framework of
  Standards
• Larry L. Burton
• Senior Technical Officer
• World Customs Organization, Brussels

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THE THREE AEO COMPONENTS

• I. Conditions, Requirements, Benefits
• II. Validation and Authorization
• III. Mutual Recognition

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SOME GUIDING PRINCIPLES

• These Core International Standards form a
  Baseline for Participation
• Clear and Tangible Benefits to AEO are a
  Necessity
• Implementation of Mutual Recognition Programs
  Require a Phased Approach

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DEFINITIONS PROVIDED

• Authorized Economic Operator (AEO)
• Shipment or Transport Conveyance
• Third Party Validator
• Authorization
• Phased Approach
• Validation.

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I. CONDITIONS AND REQUIREMENTS CUSTOMS AND THE
AEO

• This, the First of the Three SAFE AEO
  Components, Contains
• Thirteen Detailed Requirements Sections
  (Lettered A-M)
• Section Listing Benefits to the AEO.

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DETAILED REQUIREMENT SECTION A

• Demonstrated Compliance with Customs
  Requirements
• Requirements Specified for the AEO, and Taken
  into Account When Customs Considers
  Qualifications of an AEO Applicant.

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DETAILED REQUIREMENT SECTION B

• Satisfactory System for Management of Commercial
  Records
• Recognizes the Importance of the Maintenance
  of Accurate Commercial Records by an AEO, and
  their ready Availability to Customs.

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DETAILED REQUIREMENT SECTION C

• Financial Viability
• Recognizes the Critical Role to be filled by
  Good Financial Standing in Allowing an AEO to
  Fulfill its Commitments under the SAFE Framework.

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DETAILED REQUIREMENT SECTION D

• Consultation, Cooperation and Communication
• Establishes Measures for Both Customs and the
  AEO, aimed at Fostering Mutually Beneficial
  Working Relationships.

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DETAILED REQUIREMENT SECTION E

• Education, Training and Awareness
• This Section Recognizes the Importance of
  Reinforcing in Employees (both Customs and AEO),
  the Necessity of Learning Proper Procedures and
  Dealing with Anomalous Situations.

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DETAILED REQUIREMENT SECTION F

• Information Exchange, Access and Confidentiality
• This Section has Provisions Which Apply to the
  AEO, to Customs, and also to the Parties Jointly.
  The Thrust of the Section is to Secure
  Information and to Prevent its Misuse or
  Unauthorized Alteration.

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DETAILED REQUIREMENT SECTION G

• Cargo Security
• The Section Seeks to Ensure that Cargo
  Integrity and Access Controls are Maintained at
  the Highest Levels by Providing Elements both for
  Customs and the AEO.

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DETAILED REQUIREMENT SECTION H

• Conveyance Security
• Elements Within the Section Apply to Customs
  and to the AEO, With the Aspiration that they
  Work Together to Secure and Maintain Transport
  Conveyances.

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DETAILED REQUIREMENT SECTION I

• Premises Security
• Requirements to Implement Enhanced Protocols
  to Secure Buildings, and to Control and Monitor
  Perimeters. There are Elements Which Apply to
  Customs, and Those Which Apply to the AEO.

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DETAILED REQUIREMENT SECTION J

• Personnel Security
• Elements for both Customs and the AEO
  Regarding Recruitment Matters, Security Checks,
  and Personnel Procedures. The Section also
  Includes Removal of Premises Access.

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DETAILED REQUIREMENT SECTION K

• Trading Partner Security
• Section Applies to the AEO Only, and
  Encourages the AEO to Conclude Contractual
  Provisions with Partners in the Supply Chain to
  Bolster their Level of Security Commitment.

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DETAILED REQUIREMENT SECTION L

• Crisis Management and Incident Recovery
• Section Applies Jointly to AEO and Customs,
  and Encourages Advance Contingency Planning for
  Recovery from Adverse Incidents.

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DETAILED REQUIREMENT SECTION M

• Measurement, Analysis and Improvement
• The Section Seeks to Foster Consistency,
  Security Integrity, and Identification of
  Security System Improvements by Applying Certain
  Requirements to AEO Activities.

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BENEFITS TO THE AEO

• Benefits to an AEO are Additional to those Given
  Others in Trade Community. Normal Services and
  Benefits are Not Withdrawn from Non-AEO Traders
• AEO Benefits are Specific and Tangible and are
  Grouped in Four Categories Listed (A-D)
• The Benefits List is Indicative and May Be
  Supplemented at a National Level.

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AEO BENEFITS, GROUP A

• Measures to Expedite Cargo Release, Reduce
  Transit Time and Lower Storage Costs

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AEO BENEFITS, GROUP B

• Providing Access to Information of Value to AEO
  Participants

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AEO BENEFITS, GROUP C

• Special Measures Relating to Periods of Trade
  Disruption or Elevated Threat Level

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AEO BENEFITS, GROUP D

• First Consideration for Participation in Any New
  Cargo Processing Programs

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II. VALIDATION AND AUTHORIZATION

• The Second of the Three SAFE AEO Components
• Provides Discussion Regarding Application for and
  Authorization of, AEO Status
• Contains General Information on the Process of
  Validating AEO Qualifications
• Discusses the Need for Communication and Review
  Concerning Levels of AEO Compliance
• Provides a Process Outline for AEO and Customs
  Use in Validation and Authorization Activities

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THE MANDATE FROM SAFE

• The Customs administration, together with
  representatives from the trade community, will
  design validation processes or quality
  accreditation authorization procedures that
  offer incentives to businesses through their
  status as Authorized Economic Operators.
• ( SAFE, Pillar 2, Standard 3)

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DESIGN AND IMPLEMENTATION OF VALIDATION PROCEDURES

• WCO SAFE Document Offers Guidance Only
• Design Obligation Lies with Members
• Procedures Should Conform to SAFE
• Incentive Based Benefits Should be Included
• Risk Rating Tied to Supply Chain Role

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APPLICATION AND AUTHORIZATION

• SAFE Standards to be Incorporated into AEO
  Practices and Procedures
• AEO Must Have Self-Assessment Process and
  Manager
• Authorization Granted by National Customs, not by
  WCO
• Non-AEO Companies May Not be Required by Customs
  to Participate

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VALIDATION PROCEDURE

• A Third Party Validator May be Used for
  Validation Assessment Processing
• Customs, Not the Third Party, Actually Authorizes
  an AEO
• AEO May Request Processing by Customs Directly
• All Information Elicited is Confidential

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REVIEW AND MAINTENANCE

• Joint Customs and AEO Reviews to Maintain and
  Enhance Compliance Levels
• Customs May Require Periodic Reports on Required
  Information from an AEO
• Customs Members May Hold Regular Seminars to
  Discuss Common Problems and Share Best AEO
  Practices

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FUTURE DEVELOPMENTS

• Standardized AEO Accreditation Provides a
  Platform for Mutual Recognition of AEO Status at
  Bilateral, Sub-Regional, Regional and Global
  Levels. Such Systems will Involve One WCO Member
  Recognizing AEO Authorization in Another WCO
  Member as Equivalent to its Own. AEO would
  Realize Same Benefits, Improve Predictability,
  and Enhance Efficiency in All Countries Applying
  the AEO Standards.

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VALIDATION AND AUTHORIZATION ANNEX

• Provides an Authorization Process Outline for the
  Prospective AEO
• Lists Indicative Authorization Criteria to Become
  an AEO, for Use by Customs
• AEO Must First Meet all SAFE Criteria
• Authorization Valid Unless Revoked, Withdrawn or
  Suspended
• Customs Members May Adjust Process

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III. MUTUAL RECOGNITION

• Third and Last of the Three SAFE AEO Components
• Recognition that Mutual Recognition will Evolve
  Over Time (Phase-In Approach)
• Mutual Recognition Relates to SAFE Under
• 1. Pillar 2, Std. 3, Authorization
• 2. Pillar 1, Std. 6, Advance Elec. Info.
• 3. Pillar 1, Std. 7, Targeting/Communication

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THE TWO SIDES OF THE MUTUAL RECOGNITION COIN

• Customs Recognizing AEO Authorizations Granted by
  Other Customs Members
• Customs Recognizing and Relying Upon Security and
  Control Regimes Employed by Other Customs Members

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AND FINALLY !

• A Summary of the Essential AEO Concepts and
  Realities
• Implementation Key Capacity Building
• AEO SAFE Key Mutual Recognition
• SAFE Cornerstone Global Standards
• Sustaining Factor Partnership

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MANY THANKS

• LARRY L. BURTON
• Senior Technical Officer
• World Customs Organization, Brussels