Authorized Economic Operators
In the Islamic Countries:
Enhancing Customs-Traders Partnership
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Columns 2-5 of Table 3.16 present cost and time to export and import. In the OIC region, the
average time and cost to import and export for 2016-2017 average is much lower for the
countries implementing an AEO program compared to OIC countries without an AEO program.
Nonetheless, time to export and import on average for the AEO programs in the OIC region is
much higher than the best practice countries. Scrutinizing the cost to export and import, they
are much higher than the best practice countries in the OIC AEO programs (except Canada), on
average.
Table 3.17 presents the logistic performance indicators of the World Bank in 2016 for the OIC
countries and the best practices. Similar to trade costs, logistic performance indicators related
to the AEO program, namely, Customs (Column 3), Tracking & tracing (Column 7) and
Timeliness (Column 8) are higher in best practice countries compared to the OIC region.
Moreover, the OIC countries with an AEO program have higher Customs sub-logistic
performance indicator, compared to countries without an AEO program.
The only outlier country is the United Arab Emirates. They have much higher logistic
performance among all indicators than the AEO average in the OIC region. Moreover, they are
doing much better than the EU average in logistics.
3.6 OIC Member States not implementing an AEO Program
Among the OIC Member States, there are 33 countries that do not implement either an AEO
Program or a CCP. Some of the countries in the region are planning to initiate an AEO program
based on their responses to the surveys. However, some other countries in the region do not
intend to design a program. The reasons behind this decision are inferred using the survey
results along with authors’ own assessment of literature and listed as follows:
 Financial incapability of the firms: Financial viability of the AEO holding company is
particularly important for the ability to maintain and improve upon the existing
measures to secure the supply chain. The company should satisfy physical,
infrastructural, and procedural security which is costly.
 Trade volume insufficiency: Obtaining the AEO status has some fixed costs and
operational costs for the company. There might be a threshold in regards to the
volume of trade for each company that brings benefits more than the costs of the
application and maintenance of the AEO. In some of the countries, the number of
companies that can pass this threshold might be very few.
 No demand from the private sector: The consultations of the Customs with the
private sector would prevent the Customs to initiate an AEO program due to lack of
demand.
 Trade partners: The countries’ trade partners and whether they have an AEO
program would be an important indicator for a country to initiate an AEO program.
 Lack of capacity at the Customs: In order to initiate an AEO program, the Customs
needs to improve its infrastructure and human capital in line with the SAFE
Framework and international standards. Canada enhanced its existing Partners in
Protection Program by devoting 11.6 million CAD (10.8 million USD) in order to
comply with the SAFE Framework and international standards. For the countries in
OIC region the cost of initiating an AEO Program may not be as high as what Canada
spent, but still there is a burden which may not be a priority for the country.