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4

1.1.2.

WCO SAFE Framework

Following the inception of the C-TPAT, in 2002, the WCO started searching ways to achieve the

dual goals of achieving supply chain security and trade facilitation. This search process

resulted in WCO’s adoption of the Customs Guidelines on Integrated Supply Chain

Management (ISCM Guidelines) in 2004 to reduce risks related to cargo that is most vulnerable

along the supply chain and to define the roles of stakeholders in the international supply chain.

At the nexus of ISCM Guidelines, insights of the WCO’s High Level Strategic Group on security

and facilitation and consultations with the private sector stakeholders, the Standards to Secure

and Facilitate Global Trade (SAFE) Framework was born in 2005. The SAFE Framework

formally defines the concept of AEO as follows:

“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. AEOs may include manufacturers, importers,

exporters, brokers, carriers, consolidators, intermediaries, ports, airports, terminal operators,

integrated operators, warehouses, distributors and freight forwarders.”

The WCO SAFE Framework was developed based on the Revised Kyoto Convention (RKC) that

was put into force in 2006. In essence, the AEO concept was originated from the RKC’s

provisions on “authorized persons.” However, the “authorized persons” concept focuses only

on the compliance to Customs laws, regulations, or procedures whereas AEOs must comply

with security standards too.

Currently, the SAFE Framework stands on three pillars:

The Customs-to-Customs pillar

focuses on cooperation among Customs administrations to

achieve security and trade facilitation in cross-border flows of goods, services and people.

The Customs-to-Business pillar

focuses on cooperation between businesses and Customs

administrations to achieve supply chain security and safety by incentivizing businesses to

become AEOs.

The Customs-to-Other-Government and Inter-Government Agencies pillar

focuses on

harmonization of security requirements of border agencies within an economy and

internationally.

1.1.3.

A Short Summary of Trade Facilitation Measures in WCO Safe Framework

As explained above, the WCO Safe Framework explicitly defines authorized economic operator

programs while leaving the standards of custom compliance programs (CCPs) vary. These

trade facilitation measures exist under different names such as trusted trader programs,

accredited trader programs, Customs self-assessment, performance operators’ contracts,

privileged partnership programs, etc. The names of these initiatives may be misleading in

terms of meeting the requirements of AEO programs defined by the WCO. While some

programs lack the expression of “AEO” in their names even though they are categorized as

AEOs, some are called as AEO programs yet lack the defining characteristics of an AEO

program. Table 1.1 offers examples of such programs.