Authorized Economic Operator (AEO) Programme

Authorized Economic Operator (AEO) Programme: An AEO is standing for the “Authorized Economic Operator” which means a company validated and authorized by the respective Customs in accordance to their businesses with an internationally recognized security standard. This programme promotes an AEO certified company as a ‘secure’ and ‘reliable’ trade partner.

SAFE Framework of Standards: World Customs Organization (WCO) endorsed a strategy to secure the movement of global trade in a way that does not impede but, on the contrary, facilitates the movement of that trade. Securing the international trade supply chain is only one step in the overall process of strengthening and preparing Customs administrations for the 21st Century.

Accordingly, to strengthen and go beyond existing programmes and practices; WCO Members have developed a regime that will enhance the security and facilitation of international trade. This is the WCO SAFE Framework of Standards to secure and facilitate global trade (hereafter referred to as the "SAFE Framework"). The SAFE Framework sets forth the principles and the standards and presents them for adoption as a minimal threshold of what must be done by WCO Members.

Core Elements of the SAFE Framework: The SAFE Framework consists of four core elements.

  • First, it harmonizes the advance electronic cargo information requirements on inbound, outbound and transit shipments.
  • Second, each country that joins the SAFE Framework commits to employing a consistent risk management approach to address security threats.
  • Third, it requires that at the reasonable request of the receiving nation, based upon a comparable risk targeting methodology, the sending nation's Customs administration will perform an outbound inspection of high-risk containers and cargo, preferably using non-intrusive detection equipment such as large-scale X-ray machines and radiation detectors.
  • Fourth, the SAFE Framework defines benefits that Customs will provide to businesses that meet minimal supply chain security standards and best practices.

Pillars of the SAFE Framework: The SAFE Framework, based on the previously described four core elements, rests on the twin pillars of Customs-to-Customs network arrangements and Customs-to-Business partnerships.

This SAFE Framework provides a new and consolidated platform which will enhance world trade, ensure better security against terrorism, and increase the contribution of Customs and trade partners to the economic and social well-being of nations. It will improve the ability of Customs to detect and deal with high-risk consignments and increase efficiencies in the administration of goods, thereby expediting the clearance and release of goods.

Objective: The main objective of the SAFE Framework is to secure and facilitate global trade. This will enable international trade to contribute to economic growth and development. This will help to secure trade against the threat of global terrorism and, at the same time, the SAFE Framework will enable Customs administrations to facilitate the movement of legitimate trade and improve and modernize Customs operations. This will, in turn, improve revenue collection and also the proper application of national laws and regulations. This instrument therefore supports economic and social protection, and will enable foreign direct investment.

Standards: The current SAFE FoS provides guidelines to adopt 17 standards including 11 standards for Customs & Customs network arrangements and 6 standards for Customs & Business partnership. These are based on two pillars of Customs-to-Customs partnership and Customs-to-Business partnership.

  • Customs-to-Customs Standards:
  • Standard 1 – Integrated Supply Chain Management
  • Standard 2 – Cargo Inspection Authority
  • Standard 3 – Modern Technology in Inspection Equipment
  • Standard 4 – Risk-Management Systems
  • Standard 5 – High-risk Cargo or Container
  • Standard 6 – Advance Electronic Information
  • Standard 7 – Targeting and Communication
  • Standard 8 – Performance Measures
  • Standard 9 – Security Assessments
  • Standard 10 – Employee Integrity
  • Standard 11 – Outbound Security Inspections
  • Customs-To-Business Standards:
  • Standard 1 – Partnership
  • Standard 2 – Security
  • Standard 3 – Authorization
  • Standard 4 – Technology
  • Standard 5 – Communication
  • Standard 6 – Facilitation

Current international landscape of AEO programmes: Presently 25 countries have operational AEO programmes. These countries are: India, USA, European Union, Japan, China, Canada, South Korea and Switzerland, Singapore, New Zealand, Malaysia, Hong Kong, Algeria, Andorra, Argentina, Colombia, Costa Rica, Dominican Republic, Guatemala, Israel, Jordan, Kenya, Mexico, Norway and Zambia.

8 countries are in process to launch their programmes. These countries are: Chile, Peru, Turkey, Botswana, Macedonia, Morocco, Tunisia and Uganda.