The Bureau of Customs (BOC) has drafted an order that will implement the Authorized Economic Operator (AEO) program for importers and exporters, and is asking for stakeholder comments.
In an advisory published on August 23, BOC said it is accepting position papers on the AEO program from private and public stakeholders from August 23 to September 2, 2019. Stakeholders are also invited to a public consultation on September 2, from 1:00 p.m. to 3:00 p.m., at the Conference Room, Office of the District Collector, Ground Floor, BOC Manila International Container Port Building, North Harbor, Isla Puting Bato, Tondo, Manila.
The draft CMO, once approved and signed, will cover the pilot implementation of BOC’s AEO program for importers and exporters under Customs Administrative Order (CAO) No. 05-2017. The CAO contains the provisions on the infrastructure, facility, mechanism, process, and benefits needed to establish and fully implement an AEO program.
AEO rules for other stakeholders such as customs brokers, freight forwarders, transport providers and other entities accredited by BOC will be covered by other CMOs.
AEO—a concept under the World Customs Organization (WCO) SAFE Framework of Standards to Secure and Facilitate Global Trade—represents a customs-to-business partnership that seeks to enhance international supply chain security and facilitate movement of legitimate goods.
According to the WCO, AEO has become a flagship customs-business partnership program for WCO members as it offers an opportunity for customs to share its security responsibilities with the private sector, while at the same time rewarding participants with additional facilitation benefits.
Under the draft CMO, an AEO Office with three units will be created, headed by a chief and supervised by a deputy commissioner. Until a permanent AEO Office is created, an interim office headed by a division chief shall be established.
Among the three units, the Accreditation Unit shall accept, process, validate, and evaluate applications for AEO accreditation.
The Post Validation Unit shall monitor and/or post-review compliance of AEO members, record issues, identify violations, and conduct onsite visits.
The Mutual Recognition, Statistical and Records Management Unit shall monitor the individual performance of each AEO accredited entity and the performance of the AEO Program as a whole. It shall also initiate, study, recommend strategy for and, if authorized by the Customs commissioner, negotiate mutual recognition arrangements (MRAs) with other countries.
An MRA is a formal document between two or more customs administrations outlining the circumstances and conditions in which AEO programs are recognized and accepted between the signing parties.
Applying for AEO accreditation
To apply to the AEO program, an applicant entity must have been in operation for at least one year prior to the date of application.
None of the applicant’s executive officers and directors should be directly engaged in customs procedures, and shareholders should not have been found criminally liable for violations of customs laws and procedures.
The applicant must also have a dedicated office or unit or a responsible officer whose main function is to ensure the applicant’s compliance with its duties and responsibilities as an accredited member of the AEO Program.
For applicants with multiple services in the international supply chain (e.g. applying as AEO importer and exporter), one application form may be submitted for several categories, but the AEO Certificate of Accreditation is to be given per category.
The AEO Office shall pre-screen all AEO candidates prior to their application for accreditation to determine their readiness and compliance with AEO criteria and standards.
The application shall be evaluated within 10 days from receipt of complete documents. Based on the initial findings, an onsite inspection plan shall then be made, with the applicant notified of the inspection within five calendar days from evaluation.
If the application is approved, the AEO Office shall issue an AEO Certificate of Accreditation and notify the applicant in writing of its accreditation as a Level 1 AEO member within three calendar days from receipt of the decision.
If disapproved, the AEO Office shall notify the applicant in writing, stating the grounds for denial of application within three calendar days from receipt of the decision. An AEO applicant may reapply within one year, allowing the applicant to complete any deficiencies, or upgrade its security systems/requirements as needed.
Under the processing levels of AEOs, a Level 1 member is exempt from renewing accreditation, while a Level 2 member will have a dedicated processing lane, advance clearance process, periodic lodgement, one-time exemption certificate, and expedited customs clearance for exports.
A Level 3 member will be extended additional benefits that the customs commissioner, in consultation with the AEO Office to be created, will identify.
The draft CMO also lists the AEO members’ responsibilities, as well as the grounds for suspension or revocation of membership. Accreditation may be suspended or revoked depending on the degree of culpability and resulting injury to the government.
Grounds for suspension include any time an AEO member’s security measures and supply chain security practices fail to meet any of the requirements; and repeated and unjustified failure or refusal to comply with official directives or mandates from BOC.
Grounds for revocation under the draft CMO include violating any of the provisions of the Customs Modernization and Tariff Act (CMTA), or related laws, rules and regulations resulting in significant loss of customs revenues or serious injury to public health and welfare; and knowingly providing false or misleading information to BOC during the validation process.
An AEO accreditation may be withdrawn by the accredited member without prejudice to its possible re-application in the future. The withdrawal shall, however, be without prejudice to any liability it may have incurred while still a member of the AEO Program. – Roumina Pablo