Improving the Border Agency Cooperation

Among the OIC Member States for Facilitating Trade

The Harmonized Systems Convention

The Harmonized Commodity Description and Coding System, commonly known as the

Harmonized System (HS), is an internationally standardised product nomenclature developed

by the WCO to classify traded products. The HS Convention aimed at facilitating international

trade and information exchange by harmonising the description, classification and coding of

goods. As of June 2015, around 207 countries, territories and economic or customs unions

used HS and over 90% of the internationally traded merchandise was classified under this

system. Most of the OIC members (all except Iraq, Palestine and Somalia) are either contracting

parties or applicants to the convention.

WCO SAFE Framework of Standards

The SAFE Framework of Standards (SAFE FoS) is a suite of best security practices for customs

administrations worldwide and is highly relevant to BAC. The overall objective of this

instrument is to enhance supply chain security and facilitation standards in the international

trade of goods It facilitates an integrated approach in the supply chain management for all

modes of transport, improves networking between customs authorities to enhance capabilities

in the detection of high-risk shipments, and promotes cooperation between customs and the

business sector through the Authorized Economic Operator (AEO) concept – all this with the

ultimate aim of expediting the seamless movement of goods in secure international supply

chains.

Originally, SAFE FoS was built on two pillars of collaboration: customs-to-customs (pillar 1)

and customs-to-business (pillar 2). The inter-customs pillar – among several other objectives –

strives for the regulatory harmonisation of customs security legislation on advance cargo

information. The second pillar of customs-to-business collaboration promotes the AEO concept

– the idea that customs would grant trade facilitation benefits for companies that voluntarily

implement a set of security standards and controls into their supply chain. In 2015 the WCO

Council adopted a third pillar: customs-to-other government agency collaboration, with the

overall objective of ensuring that government responses to supply chain security challenges is

efficient and effective by avoiding the duplication of requirements and inspections, by

streamlining processes, and by setting global standards for the seamless and secure movement

of goods.

Mutual Recognition of AEOs

The objective of Mutual Recognition of AEOs is the recognition of the validation findings and

AEO authorisations of one customs administration by another. A “Mutual Recognition

Agreement” or a “Mutual Recognition Arrangement” (MRA), an official document between

customs administrations, lays down the benefits mutually provided to the AEOs and the

practical implementation by customs authorities. As a key element to strengthening supply

chains, facilitating trade and multiplying benefits for traders, Mutual Recognition of AEO is an

important vehicle for BAC. A total of 72 countries around the world have fully developed

national AEO programmes, and several countries are in the process of establishing or

implementing them. Egypt, Jordan, Morocco, Indonesia, Malaysia, Turkey and Uganda are the

OIC members with fully operational national AEO programmes. A number of OIC nations like

Tunisia, Bangladesh and Cote d’Ivoire are in the process of developing their AEO programmes,

which will be launched in the near future.