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BOC receives first 2 applications to AEO program

  • The Bureau of Customs (BOC) has received its first two applicants to the Authorized Economic Operator (AEO) Program
  • The importers’ pre-screening applications are being evaluated
  • BOC is taking part in meetings to develop a mutual recognition agreement on an ASEAN AEO program

Two importers are seeking accreditation under the Bureau of Customs’ (BOC) Authorized Economic Operator or AEO Program, the first to do so under the facility.

The applicants’ pre-screening applications are currently being evaluated, BOC Assessment and Operations Coordinating Group (AOCG) deputy commissioner Atty. Edward James Dy Buco told PortCalls.

For now the program’s implementing rules only cover applications by importers and exporters.

READ: Authorized Economic Operator program guidelines issued

The Philippine AEO Program was established in December 2019 in compliance with the country’s commitment to the World Customs Organization’s SAFE Framework of Standards to Secure and Facilitate Global Trade.

READ: BOC launches AEO program for 2020 implementation

The program represents a customs-to-business partnership that seeks to enhance international supply chain security and facilitate movement of legitimate goods. Implementation of the AEO program in the Philippines became possible in 2016 with the passage of Republic Act No. 10863, also known as the Customs Modernization and Tariff Act.

Companies accredited under the program will be recognized as trusted allies by the BOC and will be entitled to, among others, dedicated processing lanes, resulting in reduced processing period; recognition as a low-risk company; and reduced inspection or expedited clearance by other Customs authorities should certified status be recognized by overseas countries under a mutual recognition program established by bilateral or multilateral arrangement.

Applications should be sent to the BOC AEO Office, which will oversee program accreditation and implementation.

Eligible members

Last February, BOC again invited Super Green Lane (SGL) member companies to secure accreditation as an AEO. BOC said initial target applicants to the program include SGL members and importers and exporters whose parent companies are already members of another country’s AEO program, as these applicants will most likely pass the requirements.

BOC said its SGL and AEO Program will initially co-exist before the latter eventually replaces the former once all SGL members have migrated to AEO. SGL is a special facility for multinational companies and top corporations that are considered low risk shippers and thus accorded the privilege of advance processing and clearance of shipments.

But since the AEO Program is voluntary, Dy Buco said it is up to SGL members if they want to apply for accreditation. No deadline has been set for the migration of SGL members to the AEO program, he added.

The implementing rules for accreditation into the AEO program has yet to be issued for other stakeholders such as 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 a mutual recognition agreement (MRA).

An MRA refers to a formal document between two or more customs administrations outlining the circumstances and conditions for recognizing and accepting the AEO programs of the signing parties.

Dy Buco said BOC is taking part in meetings to develop an Association of Southeast Asian Nations AEO MRA to be completed by 2025.

Guidelines for application

Customs Memorandum Order (CMO) No. 09-2020 provides guidelines for pilot implementation of the AEO program for importers and exporters. Under the CMO, an applicant entity 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 motu proprio consider upgrading a Level 1 member to Level 2 or 3, depending on the AEO’s degree of compliance with the requirements of accreditation.

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 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.

Any fees on the application for accreditation and supervision as AEO will be collected in accordance with the approved rates provided 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. – Roumina Pablo

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