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Authorized Economic Operators

In the Islamic Countries:

Enhancing Customs-Traders Partnership

28

Application, onsite validation, authorization, revalidation (revocation) are administered by

field or regional offices, whereas the headquarters is involved in authorization, revalidation

and revocation, as well as coordination of AEO benefits with other government agencies.

Mutual Recognition Arrangements

MRAs aim at increasing end-to-end supply chain security and expand the international trade

network of PIP members. To achieve these objectives, CBSA has signed MRAs with its main

trade partners, including the United States (June 2008), Japan, the Republic of Korea and

Singapore (June 2010), Mexico (May 2016), Israel (July 2017), and Australia (July 2017). There

are also ongoing MRA negotiations with China, the EU and Hong-Kong.

2.2.4 The European-Union Case

Evolution of the AEO Program

Prior to the inclusion of the AEO concept into the EU Customs legislation, many simplifications

were already in use for existing economic operators. The EU’s AEO program was launched on

January 1st, 2008 as a voluntary program providing security amendments under the

Community Custom Code (

(Regulation (EC) 648/2005)

) and its implementing provisions. The

program aims at improving international supply chain security and facilitating legitimate

trade, and therefore covers all operators in the supply chain. The launch of this program is a

response to the introduction of the US C-TPAT and the development of the SAFE framework of

standards in the WCO. New AEO guidelines entered into force on May 1st, 2016.

The new Union Customs Code (UCC) aims –among other objectives- at the rationalization of

Customs procedures, enhancing safety and security of data and goods flow and providing more

trade facilitation for authorized economic operators. In this context, the UCC provides a

“paperless” framework and enhanced risk management. The initial transition to fully

electronic Customs was to end on December 31st, 2020. However, a new deadline has been set

at 2025 for a small number of procedures. Meanwhile, AEO eligibility and validation criteria

were raised. Reform did not prevent the increase of authorizations, where the total number of

AEOs reached 15,576 operators in 2016. According to the most recent data presented by the

“European Commission’s Taxation and Customs Union” at the WCO global conference in March

2018, there are currently a total of 19,001 operators who enjoy the status of an AEO, compared

to only 515 in the first year of program implementation.

Applicants to the program include anyone involved in the international supply chain that

carries out Customs related activities in the EU: Manufacturers, exporters, freight forwarders,

warehouse keepers, Customs agents, carriers, importers, port operators and loaders. Once the

AEO status is granted to an operator by one Member State, it is automatically recognized by

the Customs Authorities in all other Member States (Article 38 (4) UCC).

The EU introduced safety and security authorizations (AEOS), Customs simplifications (AEOC),

and a combination of both (full or AEOF). As a result, three types of authorizations are

available:

Security and safety (AEOS): AEOS members enjoy a reduction in security controls in

entry and exit measures. In 2018, there are 646 AEOS (4 percent of total AEO) in the

EU.