SAFE Trade and AEO in the SAFE Trade and AEO in the EUEU
The 1st National Conference on The 1st National Conference on SAFE Trade and AEOSAFE Trade and AEO
Manila 13-14 May 2008Manila 13-14 May 2008
The actual challengesThe actual challenges
• Ensuring our security in a context of Ensuring our security in a context of globalisation of trade but also of crime, globalisation of trade but also of crime,
• Facing increasing threats of terrorism and Facing increasing threats of terrorism and violent activities throughout the world,violent activities throughout the world,
• Managing the increasing interdependency of Managing the increasing interdependency of societies/countries (societies/countries (goes far beyond goes far beyond securitysecurity),),
• Absolute need to avoid any disruption in the Absolute need to avoid any disruption in the international trade supply chain,international trade supply chain,
• Need to continue improving trade facilitation.Need to continue improving trade facilitation.
In Customs terms, this In Customs terms, this means:means:
• Adjusting (and modernising) our customs systems and Adjusting (and modernising) our customs systems and projects with new parameters (data requirements, risk projects with new parameters (data requirements, risk management, controls, procedures, relations with economic management, controls, procedures, relations with economic operators),operators),
• Seeking to set up worldwide security standards and Seeking to set up worldwide security standards and requirements, for:requirements, for:
-- More efficient and targeted controls (on all sensitive issues), More efficient and targeted controls (on all sensitive issues),- More efficient international customs cooperation,More efficient international customs cooperation,- An acceptable administrative burden for the trade An acceptable administrative burden for the trade
Community,Community,
• Starting from a constraint (security requirements), trying to Starting from a constraint (security requirements), trying to end-up in benefits for legitimate trade and for the public end-up in benefits for legitimate trade and for the public sector.sector.
The concept of securityThe concept of security
• Identifying high risk consignments at the earliest Identifying high risk consignments at the earliest possible point in the supply chain, in time for timely possible point in the supply chain, in time for timely controls (and subsequent quicker release of other controls (and subsequent quicker release of other consignments)consignments)
• Involving the private sector and identifying traders that Involving the private sector and identifying traders that offer a high degree of security guarantees in respect of offer a high degree of security guarantees in respect of their role in the supply chain (AEO concept),their role in the supply chain (AEO concept),
• Requiring increased security at the point of origin and Requiring increased security at the point of origin and as the consignment moves throughout the supply as the consignment moves throughout the supply chain,chain,
• Developing international cooperation and modernising Developing international cooperation and modernising customs systems and practices in order to make them customs systems and practices in order to make them more efficient.more efficient.
The control of the supply chain The control of the supply chain (1)(1)
• A key element which covers a global process from A key element which covers a global process from manufacturing goods destined for export until manufacturing goods destined for export until delivery to the party to whom goods are destined,delivery to the party to whom goods are destined,
• Covers operators representing various Covers operators representing various manufacturing, trade, distribution and transport manufacturing, trade, distribution and transport segments,segments,
• A management tool for both public and private A management tool for both public and private sectors. sectors.
Control of the supply chain (2) Control of the supply chain (2) - use for/by the private sector -- use for/by the private sector -• A critical tool already used by managers in a number A critical tool already used by managers in a number
of industry, trade and transport sectors in order to :of industry, trade and transport sectors in order to :- better understand and manage the risks for their better understand and manage the risks for their
business,business,- have a better visibility of what is happening on their have a better visibility of what is happening on their
supply chain and for faster access to accurate data,supply chain and for faster access to accurate data,- secure their supplies and trade flows (ensuring the secure their supplies and trade flows (ensuring the
right stock reach the right place at the right time in right stock reach the right place at the right time in the right conditions),the right conditions),
But also…But also…
Control of the supply chain (3)Control of the supply chain (3)- use for/by the private sector -- use for/by the private sector -
• Need to respond to Consumers who are Need to respond to Consumers who are increasingly demanding on the products increasingly demanding on the products they buy: origins, ingredients or materials, they buy: origins, ingredients or materials, how it has been shipped, impact on the how it has been shipped, impact on the environment, traceability,… environment, traceability,…
• protection of firms’ brand images, quality protection of firms’ brand images, quality and safety of products, checking and safety of products, checking compliance with laws, matching public compliance with laws, matching public opinion concerns (IPR, forced labour,…).opinion concerns (IPR, forced labour,…).
Consulting the Business Consulting the Business Community - Key conclusions – Community - Key conclusions –
(1) (1)- Everybody has an interest in Everybody has an interest in balanced measuresbalanced measures
that would help avoiding disruption of trade and that would help avoiding disruption of trade and would allow the fatest resumption of trade,would allow the fatest resumption of trade,
- Nobody wants to get involved in possible Nobody wants to get involved in possible problems associated with terrorist activities problems associated with terrorist activities and/or organised crime,and/or organised crime,
- Strong interest for the business community in Strong interest for the business community in dealing with dealing with responsible and reliable partners and responsible and reliable partners and administrationsadministrations, this going beyond security , this going beyond security issues,issues,
- Those who make efforts and cooperate must be Those who make efforts and cooperate must be rewardedrewarded (cf. AEO). (cf. AEO).
Consulting the Business Consulting the Business CommunityCommunity
- Key conclusions - (2)- Key conclusions - (2)- The private sector has information and a The private sector has information and a
knowledge of key aspects of the supply chain that knowledge of key aspects of the supply chain that the public sector has not,the public sector has not,
- Most of the relevant information are already Most of the relevant information are already available in the records of different actors in the available in the records of different actors in the private sector,private sector,
- Computerisation is essential to ease gathering Computerisation is essential to ease gathering and collecting such information,and collecting such information,
- Reciprocity and Mutual recognition of AEOs and of Reciprocity and Mutual recognition of AEOs and of controls with reliable and willing partners are controls with reliable and willing partners are definitely an objective (the best workable definitely an objective (the best workable solution). solution).
The new EU legislation The new EU legislation - issues addressed -- issues addressed -
• Setting up the list of information required to Setting up the list of information required to identify high risk shipments, identify high risk shipments,
• Development of common standards for risk Development of common standards for risk management,management,
• Development of appropriate partnerships with the Development of appropriate partnerships with the Business Community, taking into account existing Business Community, taking into account existing best practicesbest practices
• Speeding up some aspects of the EU reform on e-Speeding up some aspects of the EU reform on e-Customs,Customs,
• Considering our objectives vis-à-vis our partner Considering our objectives vis-à-vis our partner countries (reinforced cooperation, mutual countries (reinforced cooperation, mutual recognition )recognition )
The new EC security The new EC security legislationlegislation
A package to increase security and facilitate legitimate trade. A package to increase security and facilitate legitimate trade. 33 main elements : main elements :
– setting up uniform Community setting up uniform Community risk-selection criteriarisk-selection criteria for for controls, supported by computerised systems (implementation controls, supported by computerised systems (implementation started, full computerisation by 2009),started, full computerisation by 2009),
– Improving security and providing reliable traders with trade Improving security and providing reliable traders with trade facilitation measures (facilitation measures (AEO-conceptAEO-concept) (implemented 1 January ) (implemented 1 January 2008),2008),
– requiring trade to provide customs authorities with requiring trade to provide customs authorities with information on goods prior to import to AND to exportinformation on goods prior to import to AND to export from the from the European Union (applicable 1 July 2009).European Union (applicable 1 July 2009).
AEOAEO AEO is a status granted AEO is a status granted to reliable economic to reliable economic
operators, established in the EU, who are involved in operators, established in the EU, who are involved in activities covered by customs legislation and activities covered by customs legislation and complies with objective criteria.complies with objective criteria.
Concept Concept open to importers, exporters, brokers, open to importers, exporters, brokers, forwarders, carriers and other service providers that forwarders, carriers and other service providers that are established in the EC (* except 2 cases, including are established in the EC (* except 2 cases, including agreements on mutual recognition of AEO and of agreements on mutual recognition of AEO and of controls) and that qualify.controls) and that qualify.
This status is granted to the holder of the relevant This status is granted to the holder of the relevant
AEO certificate, but not to his clients.AEO certificate, but not to his clients.
The status gives access to:The status gives access to:• Simplifications provided for under the customs rules Simplifications provided for under the customs rules • Facilitation with regard to customs controls relating Facilitation with regard to customs controls relating
to security and safetyto security and safety
Types of AEO in the EU (1)Types of AEO in the EU (1)
Three Types of AEO Certificates:Three Types of AEO Certificates:
a) a) CCustoms simplifications,ustoms simplifications,
b)b) Security and safety (facilitation of Security and safety (facilitation of the related customs controls),the related customs controls),
c)c) combination of a) and b) – combination of a) and b) – recommended for companies regularly recommended for companies regularly using customs simplifications and using customs simplifications and wanting to benefit from facilitationswanting to benefit from facilitations
Types of AEO in the EU (2)Types of AEO in the EU (2)
EU combines new security compliance with EU combines new security compliance with traditional simplifications for reliable traders (e.g. traditional simplifications for reliable traders (e.g. deferred payment, guarantee waiver)deferred payment, guarantee waiver)
AEO can choose whether or not they want to benefit AEO can choose whether or not they want to benefit from lower risk score and/or from simplifications like from lower risk score and/or from simplifications like guarantee waiver - depending on their choice, they guarantee waiver - depending on their choice, they have to comply with appropriate criteria -have to comply with appropriate criteria -
EU didn’t want to take away simplifications from EU didn’t want to take away simplifications from normal traders but aims at normal traders but aims at additional benefitsadditional benefits for for secure AEOs.secure AEOs.
Authorised Economic Authorised Economic OperatorOperator
Legislation focuses on 3 majors Legislation focuses on 3 majors areas:areas:
• Criteria to be complied withCriteria to be complied with
• Authorisation procedureAuthorisation procedure
• Benefits in the area of facilitation Benefits in the area of facilitation and simplifications for customs and simplifications for customs proceduresprocedures
Criteria (1)Criteria (1)
(like WCO AEO):(like WCO AEO):
• appropriate record of compliance=no appropriate record of compliance=no customs offence in past 3 yearscustoms offence in past 3 years
• satisfactory system of managing commercial satisfactory system of managing commercial and where appropriate, transport records, and where appropriate, transport records, which allow appropriate Customs controlswhich allow appropriate Customs controls
• proven financial solvency=ability to pay proven financial solvency=ability to pay customs debtcustoms debt
• NEW: for the secure AEO, additional NEW: for the secure AEO, additional appropriate security standardsappropriate security standards
Criteria (2)Criteria (2)
Security criteriaSecurity criteria : :
• threat assessmentthreat assessment• security plansecurity plan• procedural measures to prevent irregular goods procedural measures to prevent irregular goods
entering the supply chainentering the supply chain• procedural measures for handling/storage of goodsprocedural measures for handling/storage of goods• employee screening and awareness raisingemployee screening and awareness raising• physical security of buildings/access controlphysical security of buildings/access control....as laid down in legislation that is interpreted in ....as laid down in legislation that is interpreted in
uniform manner in all 27 Member States, and as uniform manner in all 27 Member States, and as further explained in AEO guidelinesfurther explained in AEO guidelines
Criteria (3)Criteria (3)
• Criteria are the same for all economic Criteria are the same for all economic operatorsoperators
• Implementation measures will however differ Implementation measures will however differ depending on the depending on the sectorsector and the and the sizesize of the of the AEO:AEO:
* A small company implements same measures * A small company implements same measures but in a different way than a big company but in a different way than a big company (f.ex. possibly no need for surveillance camera (f.ex. possibly no need for surveillance camera if staff can see what happens and who enters if staff can see what happens and who enters and leaves the building); Rail different from Air and leaves the building); Rail different from Air or Maritime – specificities are taken into or Maritime – specificities are taken into account. SIZE IS NOT A DECISIVE FACTOR!account. SIZE IS NOT A DECISIVE FACTOR!
Criteria (4)Criteria (4)
CriteriaCriteria• If the applicant is the holder of an If the applicant is the holder of an
internationally recognised security certificate internationally recognised security certificate issued on the basis of international issued on the basis of international conventions or of an International or conventions or of an International or European organisation for standardisation, European organisation for standardisation, the certificate is taken into account to the the certificate is taken into account to the extent that the criteria are comparable (e.g. extent that the criteria are comparable (e.g. ISPS, ISO)ISPS, ISO)
• The authority that decides is always The authority that decides is always customs !customs !
Authorisation process (1)Authorisation process (1)
Status is attributed according to uniform criteria in all Status is attributed according to uniform criteria in all Member States and thus recognised in all MS :Member States and thus recognised in all MS :- All applicants use the same form in the EU to All applicants use the same form in the EU to
apply/fill in a questionnaire as to whether or not apply/fill in a questionnaire as to whether or not criteria are fulfilled: importance of self-assessment!criteria are fulfilled: importance of self-assessment!
- request to be presented in the Member State where request to be presented in the Member State where the applicant's main accounts related to the the applicant's main accounts related to the customs arrangements are held, and where at least customs arrangements are held, and where at least part of the operations to be covered by the part of the operations to be covered by the certificate are conductedcertificate are conducted
- legal entitylegal entity has to apply has to apply - mother company cannot apply on behalf of all mother company cannot apply on behalf of all
daughter companies, individual applications neededdaughter companies, individual applications needed
Authorisation process (2)Authorisation process (2)
• Close consultation C2C and also C2B - Close consultation C2C and also C2B - Partnership approachPartnership approach
• Increased self-policing and self-assessment and Increased self-policing and self-assessment and less direct customs involvementless direct customs involvement
• Customs has to evaluate application form and Customs has to evaluate application form and has to audit (including visits to company) before has to audit (including visits to company) before attributing AEO statusattributing AEO status
• Customs in Member States exchange Customs in Member States exchange information/consult where necessaryinformation/consult where necessary
• compulsory consultation on criteria that cannot compulsory consultation on criteria that cannot be assessed by one Member State alone (for be assessed by one Member State alone (for example warehouses in other MS).example warehouses in other MS).
• Customs has to take a decision within 90/120 Customs has to take a decision within 90/120 daysdays
Authorisation process (3)Authorisation process (3)
• request available to all Member States request available to all Member States through a data base and open for comments through a data base and open for comments
• Appeal and hearing in case of negative Appeal and hearing in case of negative decisiondecision
• Regular monitoring by customs authoritiesRegular monitoring by customs authorities• Re-assessment if doubts on continued Re-assessment if doubts on continued
compliancecompliance• Suspension and revocation in case of non-Suspension and revocation in case of non-
compliance.compliance.
Management of the systemManagement of the system
SUSPENSIONSUSPENSION OF CERTIFICATEOF CERTIFICATE• If conditions are not any longer fully If conditions are not any longer fully
respectedrespected• 30 days to redress situation 30 days to redress situation WITHDRAWAL OF CERTIFICATEWITHDRAWAL OF CERTIFICATE• If continued non-respect of conditions or If continued non-respect of conditions or
AEO fails to redress situationAEO fails to redress situationAEO HAS THE RIGHT TO BE HEARD BEFORE AEO HAS THE RIGHT TO BE HEARD BEFORE CUSTOMS TAKES THE DECISION TO CUSTOMS TAKES THE DECISION TO SUSPEND/WITHDRAW!SUSPEND/WITHDRAW!
• In cases of revocationIn cases of revocation, no new application , no new application allowed within the next three years !allowed within the next three years !
Benefits for AEO (1)Benefits for AEO (1)
• Recognition as safe and secure partner Recognition as safe and secure partner in international trade – status as quality in international trade – status as quality criterion + better market position,criterion + better market position,
• Lower risk score for risk analysis for Lower risk score for risk analysis for safety and security purposes, i.e fewer safety and security purposes, i.e fewer controls,controls,
• Less data to be provided for pre-Less data to be provided for pre-arrival/pre-departure declarations,arrival/pre-departure declarations,
• Advanced notice that selected for Advanced notice that selected for inspection,inspection,
• Priority treatment for controls,Priority treatment for controls,
Benefits for AEO (2)Benefits for AEO (2)
• Less direct customs interventions in the Less direct customs interventions in the shipment process + more predictability,shipment process + more predictability,
• Increased self-policing with enhanced Increased self-policing with enhanced overall security of goods, with less theft overall security of goods, with less theft and accordingly lower insurance and accordingly lower insurance premiums, safer work and trade, premiums, safer work and trade, environment, and better use of environment, and better use of resourcesresources
• More streamlined internal processes and More streamlined internal processes and better relations C2B,better relations C2B,
• Possible mutual recognition with third Possible mutual recognition with third countries leading to reciprocal benefits.countries leading to reciprocal benefits.
Advantages for CustomsAdvantages for Customs
• Allow Customs to focus on suspicious or risky (i.e. Allow Customs to focus on suspicious or risky (i.e. outside the secure chain) shipments and on outside the secure chain) shipments and on unreliable or unknown operators, hence better unreliable or unknown operators, hence better revenue collection and better fight against revenue collection and better fight against frauds,frauds,
• Better use of resources, more streamlined and Better use of resources, more streamlined and also modernised internal processes, more also modernised internal processes, more accurate and timely information,accurate and timely information,
• Improved Customs capacities to address new Improved Customs capacities to address new challenges and to create favourable conditions for challenges and to create favourable conditions for their country’s external trade (reliable partner),their country’s external trade (reliable partner),
• Less congestion of traffic at points of entry,Less congestion of traffic at points of entry,• Improved relationship between business and Improved relationship between business and
customs.customs.
Global impact on tradeGlobal impact on trade
Some constraints, but also obvious benefits:Some constraints, but also obvious benefits:- An incentive for Customs administrations to An incentive for Customs administrations to
modernize their systems and practices modernize their systems and practices (Revised Kyoto Convention) and use (Revised Kyoto Convention) and use computerised risk analysis targetting only computerised risk analysis targetting only suspicious operators,suspicious operators,
- Mechanisms also applicable for addressing Mechanisms also applicable for addressing other major challenges (IPR, fair other major challenges (IPR, fair trade,product safety…),trade,product safety…),
- Legitimate business recognised as a Legitimate business recognised as a partnerpartner , ,- Will favour (reorientate ?) trade between Will favour (reorientate ?) trade between
responsible and reliable partners in both responsible and reliable partners in both private and public sectors.private and public sectors.
Preparation of implementation Preparation of implementation of AEO in the EUof AEO in the EU
– AEO pilot projects in MS in 2006AEO pilot projects in MS in 2006– Close cooperation with trade as from Close cooperation with trade as from
beginningbeginning– Training of customs officials and economic Training of customs officials and economic
operators in MSoperators in MS– Self assessment tool on TAXUD Homepage + Self assessment tool on TAXUD Homepage +
AEO guidelinesAEO guidelines– Exchange of information/best practiceExchange of information/best practice– e-learning tool available on TAXUD Homepagee-learning tool available on TAXUD Homepage– Helpdesk in TAXUD for customsHelpdesk in TAXUD for customs
Findings of 2006 AEO Pilot Findings of 2006 AEO Pilot ActionAction
• Importance of partnership approachImportance of partnership approach• Customs to have client co-ordinator or service Customs to have client co-ordinator or service
centre and company to have contact point for centre and company to have contact point for customscustoms
• Company to prepare and carry out self-Company to prepare and carry out self-assessment to facilitate and fasten assessment to facilitate and fasten authorisation/audit by customsauthorisation/audit by customs
• The better a company is prepared, the quicker The better a company is prepared, the quicker the authorisation process can be finalised/status the authorisation process can be finalised/status obtainedobtained
• Importance of risk management on AEOsImportance of risk management on AEOs• Take into account existing authorisationsTake into account existing authorisations• Trade to use security declarations or contractual Trade to use security declarations or contractual
agreements vis-à-vis non-AEO business partnersagreements vis-à-vis non-AEO business partners• Importance of mutual recognition and Importance of mutual recognition and
reciprocityreciprocity
Implementation; state of Implementation; state of playplay
– Mid April 1.400 applications in all MSMid April 1.400 applications in all MS– 6.000 to 20.000 applications expected for 20086.000 to 20.000 applications expected for 2008– mutual recognition and trend to AEO status mutual recognition and trend to AEO status
(security of business partner) could multiply,(security of business partner) could multiply,– 80% seek combination security-simplifications80% seek combination security-simplifications– 70% of applications from SMEs,70% of applications from SMEs,– Customs needs on average 100 days,Customs needs on average 100 days,– Monitoring through TAXUD/MS as of May 2008 Monitoring through TAXUD/MS as of May 2008
in all MS to ensure uniform implementation and in all MS to ensure uniform implementation and have a first assessment of the reform.have a first assessment of the reform.
International end to end supply International end to end supply chainchain
Overall objective is international end-to-end supply chain Overall objective is international end-to-end supply chain
securitysecurity through through mutual recognitionmutual recognition. This means:. This means:
• equivalent security measuresequivalent security measures that lead to equivalent levels of that lead to equivalent levels of
control and security,control and security,
• agreement on agreement on minimum control standardsminimum control standards, joint risk rules and , joint risk rules and exchange of risk related information and control results,exchange of risk related information and control results,
• trust and close trust and close cooperation among customs authoritiescooperation among customs authorities, , including on AEO matters, andincluding on AEO matters, and
• equivalent AEO conceptsequivalent AEO concepts..
The EU Approach On SecurityThe EU Approach On Security- international impact -- international impact -
CONTROL STANDARDSCONTROL STANDARDS TRADE FACILITATIONTRADE FACILITATION
Commonly agreed control Commonly agreed control standards and risk indicatorsstandards and risk indicators
Close cooperation with other Close cooperation with other services and customs services and customs administrations of third administrations of third countriescountries
Authorised Economic Operator Authorised Economic Operator (AEO) Programme(AEO) Programme
Simplified customs proceduresSimplified customs procedures
Facilitation on security requirementsFacilitation on security requirements
Objective:Objective: Mutual recognition of AEO statusMutual recognition of AEO status(benefits in the global supply chain)(benefits in the global supply chain)
Objective:Objective:Mutual recognition of security Mutual recognition of security standards and control resultsstandards and control results
Legislation and Legislation and documentationdocumentation
• Reg. 648/2005 – Amendment to Customs Code (EUOJ Reg. 648/2005 – Amendment to Customs Code (EUOJ L.117 of 4.5.2005, p.13 to 19)L.117 of 4.5.2005, p.13 to 19)
• Detailed Implementing Provisions to CC - Reg Detailed Implementing Provisions to CC - Reg 1875/2006 (EUOJ L.360 of 19.12.2006, p.64 to 125)1875/2006 (EUOJ L.360 of 19.12.2006, p.64 to 125)
• Guidelines for AEO (Part I: Explanations + examples; Guidelines for AEO (Part I: Explanations + examples; Part II: questionnaire for assessment by customs and Part II: questionnaire for assessment by customs and for self-assessment by trade) jointly worked out by for self-assessment by trade) jointly worked out by Customs and business.Customs and business.
• AEO-Database to allow for consultationAEO-Database to allow for consultation among among Member States customs authoritiesMember States customs authorities
Thank you for your Thank you for your attentionattention
For further information For further information visit the following website:visit the following website:
http://ec.europa.eu/taxation_customs/chttp://ec.europa.eu/taxation_customs/customs/index_en.htmustoms/index_en.htm
[email protected]@ec.europa.eu
