Authorized Economic Operator (AEO)
According to World Customs Organization (WCO), some new procedures have been released in the Framework of Standards to Secure and Facilitate Global Trade to enhance the supply chain security, as the newly launched Authorized Economic Operator (AEO) is aimed at customs simplification / security & safety control. It can encourage all the parties in the supply chain industry to increase security in exchange for incentives that will improve the efficiency and ultimately reduce costs and improve partner relationships.
What is the commercial implication and its benefits?
Application for AEO status may only be accepted from economic operators defined as a person who, in the course of his business, is involved in activities covered by customs legislation. After the implementation of the AEO, AEO certified businesses would prefer to do business with other AEO certified entities for a more efficient process that brings more profits. Fewer physical border controls, less paper reports, reduced risks and priority treatment for goods selected for examination are some of the benefits of the AEO certification.
The standardized approach to AEO accreditation provides a solid platform for development of international systems of mutual recognition of AEO status at local, regional and global levels in the future, therefore, a WCO Member Customs administration will be able to recognize the AEO accreditation system in another WCO Member as being equivalent to its own. This leads to improved traceability and efficiency of operation in all countries applying the AEO standards.
Applications have been accepted in some EU countries since 1st July 2007, and there will be a transitional period from 1st January 2008 from 31st Dec 2009. The application will also start in other countries in the near future. This AEO will result in a greatly improved security control worldwide and have great impact on the future supply chain industry with the cooperation of the Customs and business entities in different countries.