Facilitating Trade:
Improving Customs Risk Management Systems
In the OIC Member States
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Many studies report the impact of the CRM regarding reduction of time, namely reduction of
clearance time and cost to import/export, commonly measured by the World Bank Doing
Business Trading Across Border indicators of time and number of documents. Figure 8 below is
showing that costs and time for export and import in OIC MS is higher than the World average.
More details on trade costs and time performance and correlation with CRM performance are
presented in the Annex 1 (variable correlation cross-matching).
Figure 8: World Bank Doing Business Trade Costs Comparative Analysis
Author’s compilation based on World Bank Doing Business Trade Costs
2.4 Authorized Economic Operators (AEO)
Risk management is an essential component for the adoption of simplification measures, such
as authorized traders and economic operator’s schemes. The AEO as a concept has emerged in
the second pillar of the SAFE Framework of Standards which promotes customs to a business
partnership. The concept rests on the premises that customs can build close partnering relations
with reliable traders. These traders can apply for AEO certification and, once they have been
granted an AEO status, they can benefit from simplified control procedures, fewer physical
inspections, and fast customs clearance procedures. In such a setting, the customs increases
trade efficiency while lowering administrative burden and focusing its attention on the areas of
highest risk. CRM is responsible for the selection of trusted business partners. The proper risk
assessment will guarantee the proper selection of trusted business partners.
The trader, or the economic operator, is an important factor which influences the overall risk
assessment and risk profiling at several stages. The traders’ unusual behavior, their import or
export of novel goods, the change of places of operations, their new commercial partners, may
all constitute risk indicators. In general, the operator’s fame and compliance with customs or
fiscal regulations have to be taken into consideration.