Authorized Economic Operators
In the Islamic Countries:
Enhancing Customs-Traders Partnership
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.