Home » 3PL/4PL, Aviation, Customs & Trade, Maritime, Ports/Terminals » BOC order specifies rules for AEO setup in PH

The Bureau of Customs (BOC) has issued the rules and regulations for the establishment of an Authorized Economic Operator (AEO) program in the Philippines.

The AEO program is now part of the law under Republic Act No. 10863, otherwise known as the Customs Modernization and Tariff Act. The program—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.

It gives incentives to stakeholders with high level of compliance with customs rules and regulations.

Customs Administrative Order (CAO) No. 05-2017, signed by Finance Secretary Carlos Dominguez III and former Customs Commissioner Nicanor Faeldon, covers the establishment of an AEO program by providing the infrastructure, facility, mechanism, and process for its full implementation as well as benefits to an AEO-accredited stakeholder.

Some of the benefits are exemption from renewal of accreditation; processing and selectivity lane for AEO shipment with no documentary, physical and non-intrusive examination; advance cargo clearance; one-time exemption certificate; and expedited customs clearance for exports.

The CAO was published on August 23 and will take effect 15 days after said publication.

BOC’s AEO program will have three components—cargo security system (CSS), trade clearance facility (TCF), and mutual recognition arrangement (MRA).

CSS ensures the integrity and security of imported goods in accordance with the principles of the WCO SAFE Framework, while TCF enables highly compliant stakeholders to clear their goods with minimum or zero customs border intervention.

The MRA refers to 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.

The MRA sets out the process needed to implement, evaluate, monitor, and maintain mutual recognition. In addition, it defines the benefits to be mutually provided to AEOs by the participating customs administrations, and lays down the practical arrangements enabling the participating customs administrations to provide those benefits.

The AEO program may be either fully implemented or implemented in phases, depending on the available resources and capacity of BOC.

Stakeholders who are eligible to apply for accreditation under the program include importers, exporters, customs bonded warehouses and customs facilities and warehouses; non-vessel operating common carriers, freight forwarders, international freight forwarders with offices in the Philippines, shipping lines and airlines and their agents, authorized agent banks, local transport operators and their facilities and equipment; and foreign suppliers, manufacturers, and other entities in the logistics and international supply chain accredited as AEOs by another country with which the Philippines has an MRA.

For applicants with multiple services in the international supply chain, one application form may be submitted for several categories, but the AEO certificate of accreditation will be given for each category.

Applicants to the program must meet the standards of reliability and trustworthiness, which will be measured according to the applicant’s level of risk, the nature of its business and the conduct of its importation as against customs revenue, compliance, and cargo security.

BOC will be establishing a simplified system of processing, evaluation and action on applications for AEO accreditation. Processing of AEO applications will be on several levels.

A Level 1 member is exempted from renewing accreditation, while a Level 2 member will have a dedicated processing lane, advanced 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 AEO Office will manage the overall implementation of the program.

Once accreditation is granted under the AEO program, it will last unless suspended or revoked based on the degree of culpability and resulting injury to the government. BOC will be establishing a formal procedure for suspending or revoking the accreditation of AEO members.

After years of discussions, BOC had issued in 2013 rules governing the implementation of an AEO program, but only an ad-hoc office was created. – Roumina Pablo

Image courtesy of khunaspix at FreeDigitalPhotos.net

 

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