Authorized Economic Operators
In the Islamic Countries:
Enhancing Customs-Traders Partnership
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4.3. The AEO CASE STUDY of UGANDA
4.3.1. Evolution of the AEO Program
4.3.1.1. Background
Uganda, as known as the “Pearl of Africa”, is a landlocked country with substantial natural
resources. The country has one of the fastest-growing populations in the world – the growth
rate is estimated at 3.2 per cent in 2017. Agriculture is the most important sector of the
economy employing more than 70 percent of the labor force and producing most of the export
products (coffee, fish and fish products, tea, cotton, flowers, horticultural products) of the
country. There is also a small manufacturing base that depends on imported inputs (capital
equipment, vehicles, petroleum).
Uganda is also a vibrant transit route for other landlocked East African countries, particularly
for Rwanda and the Democratic Republic of Congo (DRC).
In the midst of many economic and supply chain security challenges, Uganda became a part of
the East African Countries (EAC) Regional Authorized Economic Operator Program Protocol9
that was conceived by the Commissioners of Customs of Burundi, Kenya, Rwanda, Tanzania
and Uganda in 2005. This corresponds to a time frame after the adoption of the WCO SAFE
Framework of Standards in 2005. Sudan is expected to join EAC regional AEO program soon.
Before the design and implementation of the AEO program in Uganda, Customs used a
selectivity criteria based on compliance in the period 2005-2008. There were green and blue
lane privileges along with yellow and red lane applications on the Ugandan borders.
Uganda’s experience amongst OIC members is unique in the sense that the country has
established its AEO program under the EAC umbrella and became a part of a regional AEO
program from its inauguration. In other words, national and regional AEO programs of Uganda
were established simultaneously. This move was in line with the EAC Protocol that mandated
the EAC region to set up its own Customs union. Moreover, the overarching objective in
involvement in a regional AEO program for Uganda was to facilitate trade to its fullest extent
and secure the supply chain to realize gains for all stakeholders ranging from traders to
Customs.
The cumbersome application procedures were simplified and made sector-specific in 2017 to
increase the number of AEO holders and to reduce the time costs in authorization process.
4.3.1.2. AEO Design
Firstly, the design of AEO program has involved a wide set of stakeholders such as clearing
agents/brokers, manufacturers, importers, exporters, insurance companies, banks, media and
radio publication houses, regional EAC partner states, international bodies (WCO, COMESA,
EAC) and development partners (TMEA, DFID, World Bank, Uganda Government). Next, the
AEO programs of other countries such as the US, the EU, Canada and Sweden were examined.
Finally, Japan was chosen as the benchmark country in the AEO design of Uganda. There were
9 The EAC Regional AEO program operates under a common set of criteria, instruments, authorization process, benefits and
monitoring system in all the Partner States. An applicant for AEO Status, irrespective of the Partner State as a result goes
through the same set of criteria like her/his counterparts in other Partner States. The Customs experts who administer these
criteria are trained together to ensure harmonization and uniformity in process.