Authorized Economic Operator Programs
In the Islamic Countries:
Enhancing Customs-Traders Partnership
1
EXECUTIVE SUMMARY
The objective of this study is to improve awareness on the AEOs and learn from the
international AEO best practices; explore the state of the play in the OIC members’ AEO
programs including their implementation and trade facilitation impacts; provide policy options
for designing/implementing AEO programs in the OIC countries; and lay out actions for MRAs
and regional AEO programs in the OIC members.
The SAFE Framework introduced the AEO concept in 2005 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. AEOs may include manufacturers, importers, exporters, brokers, carriers,
consolidators, intermediaries, ports, airports, terminal operators, integrated operators,
warehouses, distributors and freight forwarders.”
This study analyzes AEO program awareness, design and implementation in three best
practices in the World, namely Canada, the EU and Japan, and among 57 OIC Member States. As
of 2018, 12 OIC Member States have initiated the authorized economic operator program,
while 3 countries are in the design stage. On the other hand, apart from the AEO programs
there are 9 Customs compliance programs already in operation.
OIC Member States exhibit a great degree of heterogeneity in terms of AEO adoption and
implementation. In order to document and analyze the current status of the AEO programs in
the OIC members, an extensive amount of data was collected. Data collection includes surveys
distributed online and by e-mail as well as secondary source analyses (such as collecting
information from relevant webpages and quantifying those). Furthermore, public and private
sector interview questionnaires with open-ended questions were designed to complement
these surveys for the case study countries.
Survey responses were analyzed by using a convergence matrix, which is frequently used for
its straightforwardness. In addition, the convergence analysis offers the possibility of
comparison of OIC members with APEC members. The comparator matrix used in this analysis,
in essence, is a simple tool to compare different approaches to the AEO concept within a group
of countries. The qualitative comparator matrix is composed of 7 major themes and 15
variables for operational AEO programs that are supported by 92 questions.
In the OIC AEO programs the highest levels of convergence are observed for self-assessment
mechanism along with physical security and compliance requirements. However, the lowest
levels of convergence appear to be in the areas of SMEs, MRAs and types of operators.
Compared to the APEC AEO programs, the OIC AEO programs exhibit higher levels of
convergence in terms of self-assessment mechanism; physical security and compliance
requirements; application, verification and authorization procedures; benefits of AEOs,
partnership initiatives, training of Customs officials, types of operators and SMEs. Meanwhile,
the APEC AEO programs perform better convergence in terms of suspension and revocation
procedures, Customs organizational structure, electronic promotion of the program, post-
authorization audit and MRAs.