WCO Adopts AEO Guidelines (Similar to C-TPAT) (Part II - Third Party Validators, Platform for Development of Mutual Recognition)
In June 2006, the World Customs Organization (WCO) Council adopted guidelines for the Authorized Economic Operator (AEO) program, as part of the Framework of Standards to Secure and Facilitate Global Trade (SAFE Framework).
Sign up for a free preview to unlock the rest of this article
Communications Daily is required reading for senior executives at top telecom corporations, law firms, lobbying organizations, associations and government agencies (including the FCC). Join them today!
(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 II of a multi-part series of summaries on the AEO guidelines and focuses on the use of third party validators to assess AEO applications and the possible mutual recognition of AEO status between different Customs administrations. See future issues of ITT for additional summaries of the AEO guidelines.
(See ITT's Online Archives or 08/28/06 news, 06082805, for Part I of BP summary of the AEO Guidelines, which contains an overview.)
Customs May Employ Third Party Validators to Assess AEOs
WCO explains that the security procedures and best practices contained in the SAFE Framework require a validation process to be undertaken by the Customs administration. While the Customs administration shall retain ultimate authority for accrediting an AEO and for suspending or revoking such authorization, it may decide to designate third party validators to perform the assessment of an AEO applicant's compliance with the SAFE Framework security standards and best practices and/or for validating such compliance.
WCO stresses that third party validators should possess appropriate experience in certification systems, knowledge of the supply chain security standards, sufficient and appropriate knowledge of operations of the various economic and business sectors and have appropriate resources for conducting timely validations. Among other things, WCO notes that the AEO should still have the option to request validation by the Customs administration directly.
AEO Guidelines Provide Platform to Develop Mutual Recognition
In its document, WCO explains that the standardized approach to AEO authorization provides a platform for development of international systems of mutual recognition of AEO status at bilateral, sub-regional, regional, and in the future, global levels. Such systems will involve a WCO Member Customs administration recognizing the AEO authorization system in another WCO Member with an operational AEO program as being equivalent to its own. The WCO states that this will afford the AEO the same benefits and therefore improve predictability and efficiency of operation in all countries applying the AEO standards.
In addition to mutual recognition of AEO status, the SAFE Framework envisions mutual recognition of: (1) Advance Electronic Information - for example, digital certifications, which would allow the economic operator to submit all electronic messages to those Customs administrations having agreed to recognize this certificate, and (2) Targeting and Communication - Customs administrations should provide for joint targeting and screening, the use of standardized sets of targeting criteria, and compatible communication and/or information exchange mechanisms; these elements will assist in the future development of a system of mutual recognition of controls.
However, WCO acknowledges that a global system of mutual recognition of AEOs will require some time to accomplish and, in this respect, it has been suggested by WCO Members and the Secretariat that the SAFE Framework be implemented in a progressively "phased approach," so too should be the expectations for the future application of mutual recognition of Customs administrations' systems of control for AEO programs.
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 at http://www.wcoomd.org/ie/En/Topics_Issues/FacilitationCustomsProcedures/WCO%20TABLE%20Intention%20to%20implement%20the%20FOS-%20EN-FR.pdf.