- Introduction to the AEO regime
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Authorized Economic Operator
The World Customs Organization (WCO) defines AEO (Authorized Economic Operator): A party that participates in the international circulation of goods in any way and is recognized by the customs authorities as meeting the World Customs Organization or the corresponding supply chain security standards.
AEO and AEO International Customs Mutual Recognition, a system arrangement made by the World Customs Organization under the SAFE Framework of Standards, provides customs clearance facilitation measures for enterprises that meet the certification requirements in their own country and in the reciprocal recognition countries, which helps thousands of enterprises to reduce customs clearance costs, improve competitiveness, better safeguard supply chain security and promote trade facilitation.
Countries that have mutual recognition with China AEO
Since the implementation of the AEO system in 2008, China Customs has been vigorously promoting AEO international mutual recognition, focusing on enhancing the level of customs clearance facilitation for Chinese enterprises at home and abroad, reducing their customs clearance costs and enhancing their competitiveness in the international market. Up to now, China Customs has signed AEO mutual recognition agreements with 22 economies, including the European Union and Singapore, covering 48 countries (regions) and ranking first in the world in the number of mutual recognition countries (regions). Among them, 32 countries that share the "The Belt and Road", 5 RCEP member countries and 13 Central and Eastern European countries are included.
![Countries (regions) that have achieved mutual recognition of AEO with China]()
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Singapore
South Korea
Hong Kong, China
28 EU member states and the UK
Switzerland
New Zealand
Israel
Japan
Belarus
Chile
Australia
Kazakhstan
Mongolia
Uruguay
United Arab Emirates
Serbia
Uganda
South Africa
Brazil
Iran
Thailand
On November 18th, 2014, the General Administration of Customs promulgated the "Standards for Customs Certified Enterprises" (General Administration of Customs Announcement No. 82 of 2014), which, as a complementary standard to General Administration of Customs Order No. 225, divided customs certified enterprises into senior certified enterprises and general certified enterprises and set out the corresponding certification standards for each of these two types of enterprises.
MORE Valid AEO Authorisations
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Valid AEO Authorisations
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Valid Authorisations per Year and Auth Type
Certification Standard - Advanced Certification
Certification Standard - General Certification
Certification Standard - Additional Standards
Status of AEO mutual recognition between China and "The Belt and Road" countries
As of February 2022, China Customs has signed AEO mutual recognition agreements with 22 economies, covering 48 countries (regions), ranking first in the world in the number of mutual recognition countries (regions), including 32 countries that share the "The Belt and Road". At the same time, China Customs is expanding the scope of AEO mutual recognition, accelerating the consultation process of AEO mutual recognition, and actively seeking more convenience for import and export enterprises in and out of China, focusing on the "One Belt, One Road" countries.
Analysis of Characteristics of AEO Regime
Legislation to promote trade facilitation as a purpose
Due to the growth of global trade and increased threats to the security of international cargo transportation, countries are strengthening their supply chain security by enacting laws and regulations to recognise trusted operators and encourage best practices in the international supply chain. The AEO systems of the countries concerned have been developed in line with the concept of the Framework of Standards, and all focus on promoting trade security and facilitation, reflecting in the AEO system the aim of ensuring the legitimate flow of goods in international trade, supporting the overall objectives of economic and social development and trade facilitation, and promoting cooperation between customs and the business community, although the AEO systems vary slightly from country to country.
- Types of Subjects
- AEO System Promotion
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First, the types of subjects to which they apply differ.
In order to allow more supply chain operators to participate in AEO, the scope of application of the AEO system in the "Belt and Road" countries as a whole is broad, but the specific regulations on the types of AEO declaration subjects vary from country to country. In countries with faster socio-economic development, the types of enterprises allowed to apply for AEO are relatively diverse, e.g. Singapore and Israel include importers, exporters, manufacturers, customs clearance enterprises and warehouse custodians in the scope of AEO management; however, in some low and middle-income countries, only some types of operators are allowed to apply, e.g. Bangladesh only grants AEO status to manufacturers and Cambodia only grants AEO status to importers and exporters. This reflects the differences in the application subject requirements of different countries.MORE -
Secondly, the AEO system is promoted in different ways in the countries concerned.
Apart from official customs promotion, the AEO system is extended through training of customs officers. In addition, other countries promote the AEO system by organising AEO forums and seminars in conjunction with industry events. In order to involve more enterprises, the countries concerned attach great importance to the participation of SMEs in the AEO system by including them in the AEO scheme with the aim of broadening the AEO system's base in order to enhance the security, integrity and dynamism of the supply chain.MORE
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AEO Is Regulated At The Legal Level
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AEO Is Provided For At The Regulatory Level
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Most of the "Belt and Road" countries that have established AEO systems have adopted laws and regulations to regulate the various behaviours of AEO enterprises and protect the rights and interests of AEO enterprises, but the form of legislation varies according to different national conditions. For example, the countries concerned have granted three types of AEO: AEO with simplified customs procedures (AEOC), AEO with security (AEOS) and the highest level of AEOF certification, in accordance with Article 38 of EU Regulation No. 952 of 2013 (i.e. the Regulation establishing the EU Customs Code) and Article 24 of the Delegated Regulation No. 2015/2446 (containing detailed provisions supplementing Regulation No. 952/2013). AEO holders can benefit from a more favourable risk assessment, allowing operators with AEO status to enjoy customs clearance facilities such as reduced inspection rates.MORE
![AEO Is Regulated At The Legal Level]()
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In addition to the legal level, some countries have defined the AEO system at the regulatory level. For example, Turkey issued the Implementing Regulations of the Customs Law on 10 January 2013, which sets out the certification authority, applicable conditions and assessment process, AEO requirements and criteria, benefits of certificate status and provisions for suspension/revocation of certificates. Cambodia issued Ministerial Decree No. 452 on 11 April 2013 to implement an incentive mechanism for compliant traders.MORE
![AEO Is Provided For At The Regulatory Level]()
Introduction of Third Party Assessment Bodies
The focus of the assessment basis for AEO enterprises varies from country to country, and some countries have adopted the assessment basis provided by third-party auxiliary certification bodies. Generally speaking, the AEO certification standards of each country cover a number of elements such as legal compliance, financial status and internal control, and are a comprehensive consideration for enterprises, but different countries set slightly different standards due to their own circumstances. For example, in terms of years of operation, Iran requires that applicants "should have at least three years of experience in international business activities and should be involved in customs import and export activities to varying degrees", while Vietnam requires that the applicant should have been "engaged in import and export business for at least two consecutive years". In terms of enterprise size, Vietnam requires exporters to export at least US$100 million per year, export goods manufactured in the country at least US$40 million per year, and enterprises exporting agricultural or fishery products produced and processed in the country at least US$30 million per year. In terms of information system construction, each country requires AEO certified enterprises to have a grade of goods, an inventory system and an information system for data linkage between customs and the enterprise. In terms of financial status, the relevant national certification standards stipulate that enterprises can achieve financial solvency by posting a bond or submitting a letter of guarantee. The inspection of financial indicators basically endorses the audit report of the accounting firm. In AEO certification practice, some countries will rely on the results of third-party certification to compensate for the lack of customs certification power.
Implications of the AEO regime of the "Belt and Road" countries for China
![Increasing support for AEO certification of SMEs to stimulate economic vitality across the board]()
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Increasing support for AEO certification of SMEs to stimulate economic vitality across the board
When formulating the AEO certification standards, especially the internal control standardsIn the context of China's reality, many SMEs are less confident and less motivated to apply for AEO because their internal structure is different from that of traditional large enterprises
AEO work efficiently
Exploring the involvement of third-party
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On the one hand, they can provide authoritative assessment results in certain professional fields and improve the quality of AEO certification, and on the other hand, they can reduce the workload of AEO certification and ease the pressure on customs-related human resources. For this reason, many Belt and Road countries are gradually trying to strengthen the role of third-party organisations in AEO certification. For example, the UAE requires that an enterprise's Dun & Bradstreet rating should not be lower than B in terms of financial criteria, which in effect means that the credit rating of Dun & Bradstreet is a pre-requisite for an enterprise to apply for AEO certification. Serbia, for example, clearly stipulates that the third party certification of trade security will be used as the basis for the enterprise's trade security certification. At present, only the financial indicators of the AEO certification standards are credited to the audit reports of third-party institutions, i.e. auditors. It is therefore recommended that the participation of third-party organisations in the AEO certification and credit management of Customs be gradually increased, such as exploring the establishment of a white-list system for certification bodies and conducting assessments of the internal management, business standards and certification quality of certification bodies. For those who pass the customs assessment, the customs can approve their certification results in terms of quality management, trade security and other indicators in the certification standards; at the same time, they can adopt random checks and reviews to verify their certification results from time to time, and strictly implement the withdrawal mechanism for those who falsify or do not meet the requirements.ENTER
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![Exploring the involvement of third-party organisations to help customs AEO work efficiently]()
Strengthen international customs cooperation
At the same time, we should promote China's system and experience through various channels such as the Global AEO Conference and the AEO International Symposium to continuously expand the influence of China's customs AEO work.