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Aigner (2017) points out that many AEOs join the program with the expectation of more
mutual recognition agreements of their Customs with major trading partners’ Customs,
achieving more benefits.
In case an AEO program with MRAs works as designed, export declarations/export controls
are expected to serve as import declarations/inspections. However, so far the benefits are
limited to reduced risk scores and reduced controls and priority treatment of AEOs.
1.6. SME Participation
One of the primary targets of the WCO SAFE Framework is to ensure the security of the entire
supply chain. For this reason, the Framework, defines benefits, however narrow, for
businesses that meet minimal supply chain security standards. This point naturally concerns
SMEs.
SMEs comprise a vital part of the supply chain in any economy and provide employment to the
masses. However, the position of SMEs in regards to AEO certification is indeed a special case.
There exist different challenges and benefits for SMEs to get involved in AEO programs. 1
Challenges
One of the main challenges about SME participation in AEO programs is related to reaching
and educating the SMEs. Without vibrant, tangible and evident benefits SMEs will have no
incentive to make the essential commitments for AEO certification.
Secondly, AEO authorization is a costly endeavor in many countries. The cost side of security
investments that are the prerequisites for certification may be disproportionate compared to
the anticipated benefits. There are of course solutions to bypass this problem, at least partially.
The requirement for personnel screening, for example, might be less costly for an SME with
much fewer employees than a large firm.
It is evident that an SME with 3 employees have to comply with the same physical
safety/security requirements in principle but this may not mean that the SME have to
implement these requirements at the same level as a large multinational corporation. One
example for this may be cargo security. While a large firm can ensure the safety by placing the
cargo under permanent surveillance cameras, an SME can ensure safety by keeping the cargo
in a locked area guarded by security personnel.
Thirdly, the benefits for AEO status for an SME that operates from a remote location from the
process portion of a cargo movement may be more difficult to realize. However, a large mass of
SMEs exist in the middle ground in a cargo movement, somewhere between the manufacturer
and the consignee. An example of such an SME can be a foreign based freight consolidator.
Briefly, the main challenge for SMEs in AEO certification is that these firms focus their
attention on the direct expenses of certification and not on the collateral benefits that are
expected to accrue from such investments.
1 WCO Website: Please se