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Authorized Economic Operator Programs

In the Islamic Countries:

Enhancing Customs-Traders Partnership

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Inertia of the organizational structure:

Usually, in developing countries the existing risk

management units of the Customs Authority becomes responsible from the operation of the

AEO programs without any change in the organizational structure of the authority. This causes

the personnel in the risk management units to be distracted by the existing responsibilities in

addition to their new roles in AEO implementation. All of the three international best cases

introduce new units responsible from AEO implementation.

Inadequate staff:

Implementation of an AEO program requires qualified staff. Moreover, as

program matures, due to the increase in the number of AEO holders, an additional need for

qualified staff working for the AEO programs arises, which is not usually the case in developing

countries.

Financial inadequacy of companies:

Participating in the AEO program is costly for

companies. Therefore it may be difficult to increase the number of AEO holders due to the

insufficient number of firms that are capable of undertaking the costs of the program.

2.5 Requirements for a Successful AEO Outcome

Based on the discussion on global trends and the three best international practices, several

lessons can be withdrawn for a successful outcome during both the design and implementation

phases.

During the design phase:

1. Adopting an integrated approach:

Design of the AEO program should follow an integrated approach taking into account multiple

dimensions (legislative, organizational and operational). During the design phase, legislative

and regulatory reform is often needed, as well as possible organizational restructuring and

alignment with OGAs. In many countries, overlap is often present between Customs

Authorities and OGAs involved in border security and control of exports and imports.

Consultation and alignment with other governmental agencies during the design phase is

therefore crucial to avoid redundant and burdensome procedures in areas of overlap.

2.

Involving the industry and private sector:

Including the private sector during the design phase is a must in order to avoid redundancy

and mismatch between stakeholders needs and the government that is in charge of developing

the AEO program.

3. Designing an attractive package where benefits to AEOs outnumber costs:

As concluded from the three case studies, benefits to authorized operators are numerous.

However, these benefits should be evaluated in relation to the costs borne by firms and traders

to obtain authorization. Such costs include application and procedure-related fees, but also the

costs of carrying out necessary changes in order to become eligible for authorization. The EU

case provides a good example for package design, where AEO guidelines are published and

updated by the Taxation and Customs Unit. The guidelines provide a clear demonstration of

benefits, procedures, legal texts and contact offices for agents wishing to obtain authorization.