Tax & Accounting Blog

A Global Perspective of the Authorized Economic Operator (AEO) Program

Blog, Global Trade, ONESOURCE July 9, 2015

Today global trade is growing with a speed not seen before and with this significant growth, there raises security concerns for customs authorities around the world.  Historically, customs authorities have been primarily involved in two activities: the regulation of trade to/from country and the collection of customs duties and taxes. Where trade volume is high, the task becomes more difficult for customs authorities to examine and verify each and every package going out of country (export) or coming in (import). Therefore, customs authorities now have the added tasks of following various guidelines and procedures to ensure the security and safety of the country through regularizing the flow of goods.  Some of these areas of review include the prevention of smuggling, and the assessment and valuation of shipments to avoid the loss of revenue and in securing the supply chain.  Subsequently these activities may impact the complete supply chain process by increasing the overall lead time for shipments and adding transaction costs to the participants involved in global trade.

As a step towards resolving the above issues, in 2005 the World Customs Organization (WCO) came up with SAFE Framework of Standards to Secure and Facilitate Global Trade which includes the Authorized Economic Operators Program (AEO). Under AEO, each participant involved in global trade (e.g. importers, exporters, shipping agents, customs brokers and warehouse operators, etc.) can enjoy the benefit of preferential treatment from customs authorities.  Some of these benefits include expedited clearance times, less examinations, improved security and communication between supply chain partners, etc.

Mutual recognition of AEO status is a key element to strengthen and assist end-to-end security of the supply chain and to multiply benefits for traders.  The objective of mutual recognition of AEO status is that one customs administration in one country recognizes the AEO authorization issued under the other program and agrees to provide substantial, comparable and, where possible, reciprocal benefits to the mutually recognized AEOs.  Under the Mutual Recognition Agreements (MRA), the customs authority of exporting countries ensures the safety and authenticity of export shipments before export and the customs authority of the importing country ensures the preferential customs treatment for AEO certified entities at time of import.

Global Perspective

As of March 2014, 168 out of 179 WCO member countries have signed Letters of Intent committing to implement the SAFE Framework. According to the WCO, as of March 2014 there were a total of 53 AEO or similar programs operational worldwide with 10 more to be launched.  23 Mutual Recognition Agreements have been concluded and 12 more were in negotiations (refer to the following lists).

Operational AEO Programs (53)

WCO region Country Title Type
Americas and Caribbean Argentina Customs System of Reliable Operators (SAOC) Export
Canada Partners in Protection (PIP) Customs Self-Assessment (CSA) PIP – Import/export CSA  – Import
Colombia AEO Import/export
Costa Rica Customs Facilitation Program for Reliable Trade (PROFAC) Export
Dominican Republic AEO Import/export
Guatemala AEO Import/export
Mexico New Program of Certified Companies (NEEC) Export
Peru Certified Customs User UAC – OEA Export
USA Customs-Trade Partnership against Terrorism (C-TPAT) Import
Middle East and Northern Africa Jordan Golden List Import/export
East and Southern Africa Kenya AEO Import/export
Uganda AEO Import/export
Asia Pacific China Classified Management of Enterprises Import/export
Hong Kong, China Hong Kong AEO Program Import/export
India AEO Import/export
Japan AEO Import/export
Korea AEO Import/export
Malaysia AEO Import/export
New Zealand Secure Exports Scheme (SES) Export
Singapore Secure Trade Partnership (STP) Import/export
Thailand AEO Importers/Exporters, Customs brokers
Europe Andorra* AEO
EU (28 countries) AEO Import/export
Israel AEO Import/export
Norway AEO Import/export
Switzerland AEO Import/export
Turkey AEO Import/export
*Information not available


AEO Programs to be launched (10)

WCO region Country Title Type
Americas and Caribbean Chile AEO pilot Export
Ecuador Operador Económico Autorizado Export
El Salvador El Salvador Authorized Economic Operator (OEA- SV) Import
Uruguay Qualified Economic Operator Import/export
Middle East and Northern Africa Morocco AEO –
Customs simplification/ AEO – Security and safety
Tunisia AEO Import/export
East and Southern Africa Botswana Trans Kalahari Accreditation Scheme Import/export
Seychelles AEO Import/export
Asia Pacific Indonesia AEO piloting program Export
Europe Former Yugoslav Republic of Macedonia AEO Import/export
Serbia AEO Import/export


Mutual Recognition Agreements (MRAs)

Concluded MRAs (23) MRAs being negotiated (12)
Date Country Countries
June 2007 New Zealand – USA China – EU
May 2008 Japan – New Zealand China-Japan
June 2008 Canada – USA Japan – Malaysia
June 2008 Jordan – USA China-Korea
June 2009 Japan – USA Hong Kong, China-Singapore
July 2009 EU – Norway** India-Korea
July 2009 EU – Switzerland** Israel-Korea
June 2010 Canada – Japan New Zealand – Singapore
June 2010 Canada – Korea Norway – Switzerland
June 2010 Canada – Singapore Singapore – USA
June 2010 EU – Japan USA – Israel
June 2010 Korea – Singapore USA – Mexico
June 2010 Korea – USA  
January 2011 Andorra – EU**  
May 2011 Japan – Korea  
June 2011 Korea – New Zealand  
June 2011 Japan – Singapore  
May 2012 EU-USA  
June 2012 China – Singapore  
October 2013 China – Hong Kong, China  
November 2013 India- Hong Kong, China  
February 2014 Hong Kong, China – Korea  
March 2014 Korea – Mexico  
**The agreements between the EU and Switzerland, EU and Norway, and EU and Andorra, are not traditional MRAs of AEO. The mutual recognition aspect of those agreements applies only to indirect export cases, as customs security measures in relation to the movement of goods do not exist between them.


Success Stories

Today many countries are enjoying benefits of trade facilitation and economic growth through competitive advantage under the AEO Program. Globally, the AEO has created some impressive success stories worth sharing.  For example:

  • Uganda Revenue Authorities (URA) certified 12 companies as Authorized Economic Operators.  Bringing the total of companies accredited in Uganda to 21. Since launching this program, there have been registered achievements in reduction in clearance time and costs for AEOs.  An independent assessment on URA reported a reduction of Clearance time for AEOs from 4days to 1 day implying they were able to double their operations; some AEOs have recorded costs savings ranging from $100 USD to $200 USD per transaction/per consignment[1].
  • The East Africa Community (EAC) launched a Compliance Pilot Program in April 2013 encompassing five benefits, seven border posts and 13 economic operators. The pilot demonstrates the possibility of enormous cost and time savings by implementing the AEO concept. The EAC region is going for a possible second pilot of the regional AEO-scheme to manage more complex operators using more complex supply chains before opening the full scale regional AEO Program. Designing and testing new benefits and procedures will broaden the future scope to make the scheme even more inclusive. After 11 months of the pilot including the 13 pilot operators, 3,413 consignments have enjoyed regional AEO-treatment. Each consignment, based on figures calculated by the trade and transport partners, equals savings equal to $400 USD, giving a total of at least $1,365,200 USD.[2]

 AEO benefits with the highest importance to the participants are emphasized in its commonality in global standards and its cooperative partnerships with the members in their supply chain. These common requirements and mutual recognitions are important concepts for a global supply chain, as they drive efficiencies and reduce administrative burdens for companies that do business in many countries. By adopting AEO standards this prevents conflicting requirements and unnecessary inefficiencies and fosters a positive reputation with Customs agencies of participating countries.

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Compendium of Authorized Economic Operator Programs 2014 edition issued by WCO tools/tools/~/media/B8FC2D23BE5E44759579D9E780B176AC.ashx

Mutual Recognition of AEOs