WCO Adopts AEO Guidelines (Similar to C-TPAT) (Part I - Overview)

(The WCO's SAFE Framework provides for an AEO system that offers benefits for businesses that meet minimal supply chain security standards and best practices. CBP officials have previously compared AEOs to Customs-Trade Partnership Against Terrorism (C-TPAT) participants, and industry sources have stated that AEO requirements are similar to those of C-TPAT.)

This is Part I of a multi-part series of summaries on the AEO guidelines and provides an overview of the document. See future issues of ITT for additional summaries of the AEO guidelines.

AEOs May be Importers, Manufacturers, Brokers, Carriers, Etc.

The adopted guidelines define "AEO" in the SAFE Framework as a party involved in the international movement of goods in whatever function that has been approved by or on behalf of a national Customs administration as complying with WCO or equivalent supply chain security standards. AEOs include manufacturers, importers, exporters, brokers, carriers, consolidators, intermediaries, ports, airports, terminal operators, integrated operators, warehouses, and distributors.

Obtaining AEO Status

The guidelines provide the standards, practices and procedures which members of the trade community aspiring to AEO status are expected to adopt in routine usage, based on risk assessment and AEO business models.

According to the guidelines, the AEO will commit itself to an application and authorization process with its national Customs administration to implement supply chain security standards as set out in the SAFE Framework. These standards must be incorporated into the AEO's business practices and procedures.

The guidelines state that AEO authorization will be granted by the national Customs administration after validation of the fulfillment of AEO conditions and requirements.

AEO Example Benefits

According to the WCO, any AEO benefits within a national Customs administration's control must necessarily be defined and offered by individual WCO Member States. In addition, these benefits should be enhancements above and beyond the normal procedures utilized when working with non-AEOs, and not a result in a loss of access to normal procedures already in place.

The guidelines do not establish a required set of benefits that all administrations must offer; they are an indicative list of example benefits that are subject to specific Customs consideration, offering and approval:

Measures to expedite cargo release, reduce transit time and lower storage costs. (e.g., a reduced data set for cargo release, expedited processing and release of shipments; reduction of certain fees or charges for AEOs in good standing, etc.);

Access to information of value to AEO participants. (e.g., list of all countries adopting the SAFE Framework, list of recognized security standards and best practices, etc.);

Special measures relating to periods of trade disruption or elevated threat level. (e.g., accord priority processing by a national Customs administration during period of elevated threat conditions, priority in exporting to affected countries after an incident, etc.); and

First consideration for participation in any new cargo processing programs. (e.g., simplified post-entry or post-clearance programs, eligibility for self-audit or reduced audit programs, no penalties or liquidated damages imposed for late payment of duties, with only interest accruing, etc.)

AEO Core Standards May be Supplemented by National Criteria

The AEO guidelines provide baseline technical guidance for the implementation of AEO programs at the global level between WCO members and the international trade community. The AEO guidelines also allow for the inclusion of supplemental national criteria that may be required by any given Customs administration.

WCO AEO guidelines available at http://www.wcoomd.org/ie/En/Topics_Issues/FacilitationCustomsProcedures/AEO%20Guidelines.pdf.

WCO Resolution on SAFE Framework (dated June 2006) available at http://www.wcoomd.org/ie/En/Topics_Issues/FacilitationCustomsProcedures/Resolution%20E%20June%202006.pdf.

WCO SAFE Framework (dated June 2005) available at http://www.wcoomd.org/ie/En/Press/Cadre%20de%20normes%20GB_Version%20Juin%202005.pdf.

List of WCO Member States intending to implement SAFE Framework (dated 06/29/06) available athttp://www.wcoomd.org/ie/En/Topics_Issues/FacilitationCustomsProcedures/WCO%20TABLE%20Intention%20to%20implement%20the%20FOS-%20EN-FR.pdf.