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Authorized Economic Operator program guidelines issued

The Authorized Economic Operator (AEO) program for importers and exporters has been established under Customs Memorandum Order (CMO) No. 09-2020.

Signed March 16 and effective immediately, the order operationalizes an interim AEO office to implement the program, and provides guidelines for the application for accreditation as AEO importer or exporter.

An AEO program for stakeholders other than importers or exporters will be tackled in future regulations.

AEO is an internationally recognized accreditation that indicates a company’s role in the supply chain is secure and reliable, and that any Customs controls and procedures are efficient and compliant.

An AEO refers to an importer, exporter, customs broker, forwarder, freight forwarder, transport provider and any other party involved in the international movement of goods, in whatever function, accredited by the Bureau of Customs (BOC) as complying with the World Customs Organization’s SAFE Framework of Standards to Secure and Facilitate Global Trade (SAFE Framework) or equivalent supply chain security standards.

AEOs include manufacturers, importers, exporters, brokers, carriers, consolidators, intermediaries, ports, airports, terminal operators, integrated operators, warehouses and distributors.

The AEO program is in compliance with the country’s commitment to the WCO SAFE Framework, which represents a customs-to-business partnership that seeks to enhance international supply chain security and facilitate movement of legitimate goods.

Under CMO 09-2020, an interim AEO Office will be created, headed by a division chief and manned by at least five permanent staff and at least five personnel under contract of service, who will be assigned to work full time to implement the program.

The AEO Office will have the following units: Accreditation Unit, Post Validation Unit, and Mutual Recognition, Statistical and Records Management Unit.

Qualifications of applicants

An AEO applicant must have been operating for at least one year prior to the date of application.

Applicants with multiple services in the international supply chain (e.g. applying as AEO importer and exporter) may submit one application form for several categories, but the AEO Certificate of Accreditation will be per category.

If the application is approved, the AEO office will notify the applicant of his accreditation as a Level 1 AEO member.

The AEO Office may consider upgrading a Level 1 member to Level 2 or 3, depending on the degree of compliance with the requirements of accreditation as an AEO.

For an entity operating for less than three years prior to application, a compliance history of at least three continuous years must be established before becoming eligible for upgrade to Level 2 status. As such, the revalidation process should immediately start after accreditation as Level 1 member for a period of one year. The period may be extended as may be necessary to establish the required record of compliance.

An AEO applicant whose application for accreditation was disapproved may re-apply within one year, allowing the applicant to complete the deficiencies, if any, or upgrade its security systems/requirements, as may be needed.

Once granted, accreditation under the AEO Program will last until suspended, revoked, or cancelled through voluntary withdrawal from the program.

Accreditation may be suspended or revoked depending on the degree of culpability and resulting injury to the government, under any conditions in CMO 09-2020, after due notice and hearing.

Benefits of a Level 1 member include exemption from renewing accreditation, self-assessment, supplementary goods declaration, and a dedicated help desk.

For Level 2 members, benefits include those for Level 1 plus a dedicated processing lane, advance clearance process, periodic lodgement, one-time exemption certificate, and expedited customs clearance for exports.

A Level 3 member will have extended additional benefits that the customs commissioner, in consultation with the AEO Office to be created, will identify. A corresponding customs order will be issued for the additional benefits of Level 3 members.

Fees to be collected in relation to the application for accreditation and supervision as AEO, if any, will be in accordance with the approved rates provided for under the Customs Administrative Order on Customs Dues, Service Fees and Charges.

The audit of AEOs will be made according to the parameters that may be set by BOC’s Post-Clearance Audit Group.

BOC earlier said its Super Green Lane (SGL) and AEO Program will initially co-exist, but the latter will eventually replace the former once all SGL members have migrated to AEO. SGL is a special facility whose members include multinational companies and top corporations that are accorded the privilege of advance processing and clearance of shipments for being considered low risk.

CMO 09-2020 revokes, amends, or modifies CMOs 11-2012 and 14-2013.

CMO 09-2020 implements Customs Administrative Order (CAO) No. 05-2017, which provides the rules and regulations for the establishment of an AEO program in the Philippines.

READ: BOC launches AEO program for 2020 implementation

Implementation of the AEO program, which was launched last year, has been made possible through Republic Act No. 10863, otherwise known as the Customs Modernization and Tariff Act. – Roumina Pablo

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